The first priority question is in the name of Deputy Éamon Ó Cuív, who is not present at the moment, so we will go on to question No. 2, in the name of Deputy Brian Stanley.
Priority Questions
Water Charges Yield
Brian Stanley
Ceist:2. Deputy Brian Stanley asked the Minister for the Environment, Community and Local Government the net figure collected from domestic water charges in 2015; the cost of collection; and the projected net cost to the Exchequer of the household conservation grant. [3663/15]
My question relates to the funding of Irish Water in the current year. Will the Minister outline how the charges are going to work, the projected cost to the Exchequer of the household conservation grant, and the amount to be collected for domestic charges in 2015?
The main aspects of the Irish Water funding model are set out in a detailed fact sheet published on my Department’s website. In 2015 Irish Water expects billed income from domestic customers to total €271 million and that from non-domestic customers to total some €229 million, giving a total billed income from customers of €500 million. The estimated annual cost of Irish Water’s billing and customer services for domestic customers is approximately €22 million. Irish Water’s costs have been examined by the Commission for Energy Regulation, CER, and only efficiently incurred costs can be passed on to the customer.
The Government is proposing to provide for the payment of a water conservation grant of €100 per annum, which will be available to all eligible households in respect of their primary residence. The water conservation grant will commence this year and an allocation of €130 million has been provided in my Department’s estimates for 2015. The budget allocation for the water conservation grant is based on an estimate of up to 1.3 million households applying for the grant. This estimated level of demand for 2015 takes account of the number of primary residences recorded in census 2011 as well as experience with other demand-led schemes.
The concern here is that the Minister has said that he expects to bring in €271 million from domestic water charges. What compliance rate is that based on? If it is going to cost €20 million to collect the charges and there is a non-compliance rate of 30%, that brings the income down to €190 million. If one takes €20 million from that, one is left with €170 million, and when one takes the water conservation grant, for which the Minister has budgeted €130 million, that leaves €40 million. The cost to date of setting up the corporate structure is more than €200 million, so he has already overshot the runway in terms of the cost of this. The economics of this do not add up. I am saying this honestly. This is voodoo economics. Will the Minister outline the level of compliance on which the €271 million is based on?
I will not take lectures from Sinn Féin on voodoo economics, especially after the performance the other night.
I know the Minister will not, but let us deal with the reality. Let us deal with the hard figures. Come on now.
Deputy Adams got his figures wrong.
Give the Minister a chance.
We are very happy that the funding model for Irish Water is very thorough and is going to work. The registration levels are improving all the time. As of yesterday, 1.03 million people had registered. The funding model for Irish Water and the expenditure is all set out. The €271 million for domestic income is what is expected and what has been gone through with the CER.
What is the compliance rate? Is it 18% or 19%?
It is impossible to assess now, but similar to all other schemes, the property tax and everything else, we expect a very high compliance rate. Income from commercial charges is €229 million, so that is bringing in a total of €500 million. With the €399 million, that is €899 million, as the Deputy is well aware, in relation to the total operating spend on Irish Water.
How much was brought in by commercial water charges last year? These are the figures. This is what must stack up here. The Minister has not told me what compliance level he needs to achieve to bring in the €271 million. He might answer those two questions. The European Commission is quoted as saying that the water conservation grant is a transfer from the Exchequer to Irish Water and that this may not meet the market corporation test.
That is a later question.
This is a reality the Minister must deal with. This is something this State must deal with if it does not meet the market corporation test. Does the Minister believe that it will meet the market corporation test and does he believe that the reported remarks of representatives of the European Commission are not true? It was reported heavily last week that this is the line taken by the European Commission, that it is counting this €130 million as a direct transfer from the Exchequer. This is not off-balance sheet. It counts this as State funding to Irish Water. Has the Minister had an exchange with the European Commission in the past week on this matter?
Another Deputy has a similar question later on. I am confident this will pass the market corporation test.
Comments by the European Commission were leaked over the past several weeks. We are, however, confident the market corporation test will be met. Several Deputies have referred to the water conservation grant as if it would have a negative impact on this. This will be a demand-led scheme which will be available universally, including for the Deputy’s backyard, for those with private wells and those in group schemes. The Government is very confident the package being put together will pass the market corporation test.
It must be remembered that EUROSTAT is independent of the European Commission, like the Central Statistics Office is of the Government. It will make its own determination which should be available in April.
Local Development Companies Funding
Éamon Ó Cuív
Ceist:1. Deputy Éamon Ó Cuív asked the Minister for the Environment, Community and Local Government his plans to ensure the local development companies on the non-Gaeltacht islands have adequate funding after the end of March 2015; and if he will make a statement on the matter. [3662/15]
There have been island development companies on the non-Gaeltacht islands for some time which have been funded on a regular basis. They are seeking permanent funding through three-year or five-year schemes with an understanding that funding could be rolled over on review after that period.
My Department’s local and community development programme, LCDP, is the largest social inclusion intervention of its kind in the State. The current programme officially ended at the end of 2013, having operated for four years with funding of €281 million over that period. It is being implemented on a transitional basis for 2014 with a budget of €47 million pending the roll-out of the new social inclusion and community activation programme, SICAP, in April 2015.
My Department provides LCDP funding to Comhar na nOileán Teoranta, the local development company for the islands, for the delivery of LCDP to offshore islands. In terms of the successor programme, SICAP, the intention is that island areas would be eligible for inclusion in the tendering process currently under way and due to be completed in February 2015. SICAP funding allocations are informed by a specific resource allocation model, or RAM, which focuses on relative disadvantage of individual areas.
Discussions have taken place recently between my Department and the Department of Arts, Heritage and the Gaeltacht, which has lead responsibility for the islands, in response to issues raised regarding the continuation of funding for the development offices on several non-Gaeltacht Islands. This reflected the fact that the issues involved are broader than just those relating to SICAP. Both Departments fully understand the importance of the community development infrastructure on these islands. Along with my colleague, the Minister of State at the Department of Arts, Heritage and the Gaeltacht with special responsibility for Gaeltacht affairs, Deputy Joe McHugh, I will be ensuring both our Departments agree a workable solution in the matter. In the meantime, LCDP funding for the groups concerned will continue until the end of March 2015.
I welcome the vague assurances from the Minister of State but the clock is ticking. As she knows with employment law, etc., unless there is certainty of funding and the amount of it, protective notice will have to be given to the staff, many of them long serving, of the development companies in question. The Minister of State has not given any indication of the amount of money being made available, whether all the companies that received funding in the past will continue to be funded and what term of funding will be involved. There have been months of opportunity to deal with this. I raised this with the Minister of State’s predecessor, the former Minister, Phil Hogan, over a long time. I was assured then that the islands, particularly the non-Gaeltacht islands, would not be left in this situation.
Can the Minister of State tell me when an announcement will be made? Will she indicate the amounts of money that will be involved? Will she indicate the term of the funding involved? Will it be a three-year, five-year or an eight-year programme?
The Deputy's concerns and those of the islands have been taken on board. We are working together with the two Departments. I am precluded from saying anything while we are in the tendering process. I am sure the Deputy understands this. Once we are through the tendering process, timelines and funding will become apparent and I will then inform the Deputy.
I understood from the Minister of State's reply that the funding for the development companies on the non-Gaeltacht islands would not come under SICAP as the tender will not cover the type of activity mainly covered by these development companies. These are broad development companies which assist everybody on the islands. They tend to become the liaison point for all government services on the islands. In what way is the tendering process holding this up when it will not be part of it? When will a decision be made on the tendering processes, as it was meant to be over a long time ago? How much money will be set aside for this? For what length of time will the programmes run?
As the tendering process is taking place, I am precluded from saying anything specific. The Deputy's concerns and those of the islands have been taken on board. Along with the Minister of State, Deputy Joe McHugh, I am working through these concerns. When the tendering process is over - which will be very soon - I will then be in a position to let the Deputy have more detail.
Irish Water Funding
Catherine Murphy
Ceist:3. Deputy Catherine Murphy asked the Minister for the Environment, Community and Local Government the details of the funding model of Irish Water; the net income from the model annually broken down by category; the estimation of households in the State that Irish Water is relying on to determine the full cost of the €100 allowance and the cost in each year up to 2019; the plans of Irish Water to engage any supplementary measures such as borrowing to augment income; and if he will make a statement on the matter. [3675/15]
The Department has made the assumption that 35,000 households - customers of Irish Water - will not apply for the water conservation grant. This goes to the heart of the viability of Irish Water as it raises questions over the costs of the quango itself and the billing system. The grant itself, in turn, will use up moneys intended for investment. These are the issues I have raised in this question.
The establishment of Irish Water is an integral component of the Government’s water sector reform strategy and will lead to lower costs and improved services in the future, providing much better outcomes for customers and the environment. Irish Water is being funded by a combination of domestic and non-domestic water charges, Government subvention and the raising of debt on capital markets.
In 2015, Irish Water expects billed income from domestic customers to total €271 million and from non-domestic customers to total some €229 million, giving a total billed income from customers of €500 million. In addition, the Government will provide €399 million in operating subvention to Irish Water in 2015. Irish Water has been progressing funding initiatives with a view to putting in place several debt facilities with commercial lenders during 2015.
The Government is proposing to provide for the payment of a water conservation grant of €100 per annum which will be available to all eligible households in respect of their primary residence. The water conservation grant will commence this year and an allocation of €130 million has been provided in my Department’s Estimates for 2015. The allocation of €130 million represents an increase of some €64 million on the previous alleviation measures included in budget 2015.
The budget allocation for the water conservation grant is based on an estimate of up to 1.3 million households applying for the grant. This estimated level of demand for 2015 takes account of the number of primary residences recorded in the 2011 census, as well as experiences with other demand-led schemes. The provisions required in future years will be determined as part of the annual budgetary process, having regard to the take-up of the scheme and forecast growth in household numbers.
The Minister claimed it will lead to lower costs in the future. For whom? Essentially, the whole idea of establishing Irish Water was to ensure corresponding funding could be raised off balance sheet. There will be difficulties if it does not pass the EUROSTAT market corporation test.
Essentially, much of what has been estimated as the income for Irish Water with the new regime is going to leave nothing available to invest in remediating the system. All it is going to do is add to household costs. The €100 conservation grant, which has nothing to do with conservation, is really an exercise in creative accounting to find political acceptance, so that increased charges can be introduced in the future. There is no requirement to provide any evidence that water is being conserved or that anything is being done to achieve that. That is what people see. The economics of this are going to sink Irish Water - I cannot see how they can do anything else. It is extraordinary that a whole income stream in the form of development contributions for water and waste water systems has been dispensed with for the whole of 2014. That was a viable income stream and it has been dispensed with. I do not understand the rationale in terms of where this investment is going to come from.
Irish Water is set up in order to ensure that it can invest into the future - that it can have capital to invest on a scale that was not there before. It is a model that is necessary so that we do not have to argue about whether we are going to invest in schools, health care, or water. We need a separate mechanism to be able to fund this. Deputy Murphy is well aware of issues around water in her own area. EPA reports over the last months show the necessity for us to invest at a sufficient level to encourage inward investment, for domestic reasons, for tourism and for many other reasons, as the Deputy well knows.
The water conservation grant is far from an exercise in creative accounting. I have met with the group schemes and many people who have their own wells, and they have invested huge amounts of money in protecting their own water infrastructure. They are very happy with the scheme that has been put in place. If the Deputy feels that giving €100 as a water conservation grant is a case of creative accounting, does she feel the same about the fuel allowance, which is given out in a very similar way?
The point is that there will be no money to invest. The Minister is talking about the need to invest, but there will be no money. He has not made a convincing argument about where this money is going to come from. He talks about people in group water schemes investing - and yes, they did - but equally, people in public schemes and commercial enterprise made an investment in water and waste water systems through development contributions. Investment has not been exclusive to one sector of the community. There are some €11 billion worth of assets, so it is not all about liabilities. On the development contribution side, local authorities are no longer allowed to apply water and wastewater development contributions, which would be the biggest portion of development contributions. However, Irish Water has not been given that competence. A whole year has gone by in which a viable income stream has not been exploited. That money would formerly have been invested in water and wastewater schemes. Where is the money going to come from for the investment?
There has been an awful lot of analysis of Irish Water, but the way in which it has been set up as a utility means that it now has huge capacity to borrow and invest into the future. Deputy Murphy knows there will be economies and deferred costs in the future as a result of the investments that have been made. It will be possible to prioritise projects. Irish Water is currently in the process of undergoing various techniques as regards borrowing for the future. We would not be able to intercept these projects and put in place the capital plan that I am going to receive from Irish Water in the next couple of months. The Government simply would not have the capacity to put in that investment. Given the way Irish Water has been set up, and its borrowing capacity and income streams, we will be able to do that. It will be able to deal with the multitude of issues coming down the track, particularly, dare I say, in the conurbation around Dublin where we sit, which will have serious water problems in the very near future if the investment is not fast forwarded. I am not convinced that governments in the future would be in any position to invest at the necessary level if Irish Water had not been set up in this way. That is the reason we went down this road.
Homeless Accommodation Provision
Barry Cowen
Ceist:4. Deputy Barry Cowen asked the Minister for the Environment, Community and Local Government if he will provide an update on progress in the 20-point action plan to tackle emergency and short-term homelessness; and if he will make a statement on the matter. [3443/15]
The Minister, Deputy Kelly, put in place a task force to address the crisis that emerged following the unfortunate death of Jonathan Corrie, a homeless person, before Christmas. There have unfortunately been subsequent deaths of a similar nature. Following the consultation process with the various stakeholders, the Minister and his Department introduced a 20-point plan, which we welcomed. I acknowledge that some progress has been made. However, the Minister owes it to the House to inform us of the progress made since along the path of the 20-point plan. It should not be allowed to slip off the agenda and it is incumbent on us as representatives to ensure that the commitments made in the plan are honoured. I ask the Minister for an update.
I thank Deputy Cowen for raising this issue. I also commend the Deputies opposite, many of whom participated in this process in a very non-political and open way. Many people outside the House of various political persuasions acted in a similar vein. I want to publicly thank them for that.
On 4 December 2014, as everyone is aware, I hosted a special summit on homelessness to reaffirm the Government's commitment to end involuntary long-term homelessness by the end of 2016. A number of actions arising from the summit were formalised into an action plan to address homelessness, and substantial progress has been made in implementing that plan. Overall progress is overseen by the Cabinet committee on social policy and public service reform. The plan and progress reports are available on my Department's website at http://www.environ.ie/en/DevelopmentHousing/Housing/SpecialNeeds/HomelessPeople/.
I am satisfied that there is enough accommodation available for all those sleeping rough and that no one needs to sleep rough unless they choose to do so. Of course, we need to try to intercept that as well. The number and availability of emergency beds is being monitored closely, particularly in the Dublin area by Dublin City Council, and further beds will be brought on stream should the need arise. I am very much committed to that and have made public statements expressing my commitment. If necessary, we will bring more beds on stream.
The long-term solution to homelessness is to increase the supply of homes. In November 2014, I launched the Government’s Social Housing Strategy 2020. This six-year strategy sets out to provide 35,000 new social housing units at a cost of €3.8 billion and restores the State to a central role in the provision of social housing through, inter alia, a resumption of direct building on a significant scale by local authorities, approved housing bodies and a number of other mechanisms.
I thank the Minister for his response and for the publication of the status of the 20-point plan on the website. I look forward to monitoring that progress. I acknowledge that a commitment has been given on a short-term basis to address the issue of people sleeping rough, and much progress has been made here in Dublin and in the cities in that regard. Has the Minister or his Department conducted any similar negotiation in the regions? Unfortunately, the issue is not confined to the cities, although there has been a crisis in recent times, which, thankfully, has been addressed in the short term. It is incumbent on the Minister and the Department to spread their wings as far as possible in order to address the issue on a regional basis. Even in my own county issues such as this exist, and it is important that non-governmental agencies are given every assistance in working with local authorities to address these issues in a meaningful manner so that they are all singing from the same hymn sheet and working off the same page. Assuming the Minister is amenable to providing such resources to those funding agencies, I ask for an update in that regard.
As the Deputy will be aware, Dublin was prioritised and transport services, night cafés etc. were introduced. A number of other changes are also under way. Nevertheless, I share the Deputy's concerns as we both represent the lower midlands. I understand and appreciate that homelessness is a broad issue that does not only affect urban areas, even if the acute problems arise in the conurbation in and around Dublin. Working with the relevant local authorities, we have made a number of changes in other cities.
We have examined homelessness in the context of the regions, specifically large towns in more rural areas. These areas are also being reprioritised on the basis of many comments that have been received, including from Members of the Oireachtas. As Deputy Cowen will be aware, the new Housing First programme has been announced for the midlands. This is an excellent initiative which has been taken by a number of highly dedicated individuals.
I have managed to secure an increase in funding for homelessness. The Department is reallocating funding for the regions and will present new budgets that target preventative measures in the area of homelessness. This is an opportune time to re-examine these issues.
I thank the Minister for his response on this issue. I also acknowledge the public commitment he has given to the regions through the Housing First programme in the first instance and the provision of further funding in the short term to address these issues in a meaningful way. As with the first issue I raised, I hope his public relations team and officials will keep members of the public and Deputies informed about progress in this area, including through the departmental website. The Minister is committed to publishing reports at various stages in the years ahead and I expect him to do likewise on this matter.