Saincheisteanna Tráthúla - Topical Issue Debate

Special Educational Needs

I wish to raise an important issue arising from the lack of classes for children with autism disorder in the Dublin 6 and Dublin 6W region. All Deputies will be aware that it is extremely demanding to be the parent of a child with autism. It can be very stressful. This becomes particularly acute when the child reaches the age at which he or she must attend national school. We know from the National Council for Special Education that the State's objective is to ensure children with autism can be educated in mainstream schools. It is essential in our Republic that we try to treat all children equally. If we are to ensure children with autism can be taught in mainstream schools, we must ensure classes are provided for kids with autism. I know many schools can take children with autism, but if they are to accommodate children with specific types of autism they have to ensure they have special classes. Just one of the 19 national schools in the Dublin 6 and Dublin 6W region has classes for children with autism spectrum disorder. Many parents in the region who have children with autism are facing difficulties because they are unable to have their children educated locally. They are forced to send their children into other catchment areas. This puts great pressure on them and on the other catchment areas. We need to ensure the national schools in the Dublin 6 and Dublin 6W region provide classes to these children.

If it is not feasible or if the schools are not doing it, is essential that the Government intervenes using its powers under section 8 of the Education (Admission to Schools) Act.

Circumstances are even more acute in north County Dublin than in Deputy O'Callaghan's area. All of us feel the stress parents have to go through when they are forced to come to us having tried everything to get placements for their children. It is utterly shocking for us not to be able to provide them with an answer. All the Deputies in Dublin Fingal, the five of us, wrote to the Minister for Education and Skills and asked him to meet us to discuss this issue. We find it quite reprehensible that he chose not to do so. I ask the Minister of State to return to the Minister and ask him whether he will meet the five representatives.

Let me outline the kinds of cases we have to deal with. Indie McCabe is going to be five this month. We have written several letters to the Minister about the length of time she has had to wait for early intervention. We eventually got a letter back stating the waiting time to be seen by the team was 32 months. Jacob, who has autism, is going to be five in October. He has had his name down for four ASD units in north Dublin, all of which have indicated they will not have a place for him. Home tuition is not suitable for him. The family wants their child to be educated, like his siblings, in a school where he can make friends. Billy was diagnosed a year and a half ago and is still waiting for early intervention. His parents are paying privately for an SNA, which they cannot afford to do. This is absolutely critical. The strategy, if there is one, is not working. We need a desperate remedy for these families.

As has been said, there is an acute shortage. This was recognised by the Minister of State's colleague when she said the NCSE is aware of the emerging need in north Dublin. The council is aware that there is a need so the Government cannot be blind to the fact that there is an issue. It is obviously in receipt of all the representations. My constituency colleagues probably send in the same number of representations that I do but, unlike them, I operate two offices in the constituency. I am very available and, therefore, get a lot of people who walk in as well as emails and telephone calls. The individuals are at the end of their tether. Finding €7,500 to supplement services for one's child when one is a lone parent on a fixed income is really tough. That is what parents are doing. When they do get allocated a place, it is very often not in the local area. Every morning, the parents get up and put their children on a bus to Drogheda. That is heartbreaking. They know their children are going to spend an hour on the bus. They want the children to be educated locally. They believe that, by virtue of the fact that the children have a special or additional need, they are not treated with any kind of priority by the State. They are being left behind. We can advocate on behalf of all the individuals and do so, but there needs to be a strategy. It needs to acknowledge what the NCSE has acknowledged, which is that there is an emerging need in north Dublin. The need is not emerging; it exists now and it is real. Despite this, we do not see any action.

Deputy Daly and I wrote to the Minister, Deputy McHugh. We sought a meeting and he is refusing to meet us. What does that say to the parents and children about the sort of standing and priority they will be afforded by the State?

I thank the Deputies for raising this important issue. I apologise on behalf of the Minister, Deputy Joe McHugh, who was not able to make it on time. I am taking the matter on his behalf.

We are investing heavily in supporting our children with special educational needs, with €1.8 billion being spent annually, almost €1 in every €5 of the education budget. This includes an allocation of over €300 million towards providing additional resources specifically to support students with autism in schools.

The number of special classes across the country has increased from 548 in 2011 to 1,459 now. Almost 1,200 of these classes are autism spectrum disorder, ASD, special classes. The National Council for Special education, NCSE, an independent agency of my Department, is responsible for planning, co-ordinating and advising on education provision for children with special educational needs. The council ensures that schools in an area can, between them, cater for all children who have been identified as needing special class placements. Individual school boards of management are responsible for the establishment of special classes. It is open to any school to make an application to the NCSE to establish a class. When the NCSE sanctions the establishment of a special class or the expansion of special provision in a school, the school can apply to the Department for capital funding to reconfigure existing spaces within the school building to accommodate the class or construct additional accommodation. Where families are experiencing difficulty in securing a placement for their child, it is recommended that they work closely with the NCSE's teams of locally based special education needs organisers, SENOs, who will assist and advise them. SENOs also advise schools.

The council is actively engaging with schools, school patrons, parents, NEPS, health professionals and others involved in the provision of services for children with special educational needs to ensure each child has a school placement appropriate to his or her needs for the 2019-20 school year. The NCSE and an official of my Department met a group of parents from the Dublin 15 area on Friday, 12 April 2019. The NCSE has been in contact with advocacy groups in the Dublin 6 and 6W areas and I have been advised that a meeting will be arranged in the coming weeks.

Let me get to the core of this because the Deputies will have a number of questions for me. It may be of some help for them to note the Department has arranged an information session for 14 May at 3 p.m. in the audiovisual room for all Oireachtas Members regarding ASD provision nationwide. The NCSE and officials from the Department will be in attendance. It has been agreed that council representatives will attend the next public meeting held by the group. I was advised just a few minutes before coming in here that the public meeting has been arranged for 29 April 2019. Members will be invited. This may allay the Deputies' fears that no action is being taken. There are two meetings planned. The Department is planning to ensure children without a suitable placement for next year are provided with a suitable one.

I thank the Minister of State for his reply. It is cruel that we force the parents of children with autism to campaign and canvass politicians to have their children educated in their local school. We all desire for children to be educated locally but the stress of having a child with autism who cannot be educated locally is severe. The child must be taken out of the catchment area and transported to another area where he or she feels alienated and not at home. The Minister of State needs to recognise that the Government has power, since December of last year and under section 8 of the Education (Admission to Schools) Act, to do something practical and real in this regard.

I acknowledge that the Minister of State referred to information meetings but the parents do not want more information meetings: they want action. If local schools are not going to provide classes for children with autism, the Minister, after consultation with the NCSE, has the power to direct additional resources. I want the Minister of State to be aware of that power and exercise it. The Oireachtas gives Ministers powers so they can do something with them.

I am glad there are meetings coming up but the fact that it has taken protest by parents and consistent lobbying in this House to achieve them is regrettable. As Deputy O'Callaghan said, the parents involved are at breaking point. Receiving refusal letters time and again and being sent from Billy to Jack is not good enough. If they have another meeting and if there is no change in the strategy or a definite place for their children, it will just compound their stress.

The Education (Admissions to Schools) Act includes powers to compel the schools to make additional provision for the education of children with special needs. When will the Government exercise that right and intervene to secure an appropriate education for those children who deserve it? A strategy is needed to help parents in individual cases but there have been so many broken promises. We have a long-standing commitment on a project in St. Michael's House in Skerries, for example. We have been told that it is a priority but another school year is almost over and it is no nearer to opening. If it is just a meeting with no outcome, that will only retraumatise people. We need action and a concrete improvement in the situation as a result of those meetings.

I note the Minister of State's reply that he met a group of parents from Dublin 15. I represent Dublin Fingal in north county Dublin and I am talking about parents in Swords, Skerries, Balbriggan, Lusk, Rush and surrounding areas. They are being told there is a 33-month wait for early intervention. It cannot be considered early intervention if there is a three-year wait; that is anything but early. I welcome that there will be meetings but I have no confidence that they will help the parents. The only thing that will help those parents is information about how they can access services and where those services are. I have spoken to parents who are on a single or fixed income who have to scrape to find €7,500 just to make up the shortfall that the State should provide. They are doing the Minister of State's job. It is case of make do and mend for them and they are salvaging every penny they can to supplement the care of their children. They are doing the job of the State, which is not fair. They feel their kids are being treated as second-class citizens. There is little in the Minister of State's reply that would give me cause to tell them otherwise.

I spoke to the Minister, Deputy McHugh, earlier this afternoon on this and went through a couple of points. He told me that the Department is committed to ensuring that all children in that area can access the education suitable for their needs. I am aware of the powers under the Education (Admissions to Schools) Act. The Minister has stated categorically that there will be a fix in this regard. I am doing my job and I do not want to see any children in that position. It is painful for me to hear that there are children in this situation. However, I urge the Deputies to allow the two meetings to take place. Having spoken to the Minister and departmental officials, I do not believe that they will be just talking shop, but that solutions will be found.

I do not like to say this but I must read the information given to me. The home tuition grant scheme is available. The Deputies should not get me wrong, I am not saying that is the solution, nor would I want it to be if it was for my child, but I am obliged to give out that information.

The meeting with the Members will be valuable but the most important meeting will take place on 29 April with the NCSE. I doubt that the NCSE officials will come to that meeting and just talk about how to solve this. I cannot say categorically that it will be solved then but having spoken to the Minister and the officials that we will solve the problem in the Dublin area.

Health Services Funding

The Minister of State, Deputy Catherine Byrne, is dealing with this question. We would have withdrawal symptoms if we did not have her here on a Thursday evening.

God help her, again.

I am Thursday's child.

I welcome the Minister for Thursdays to the Chamber. I am grateful to the Ceann Comhairle for selecting this issue. I am joined by Deputy Eugene Murphy as my question also relates to Roscommon and County Galway. I understand that HSE management in CHO 2 in Galway, Mayo and Roscommon are planning a range of curtailments of services, including the cancellation of 20 agency staff contracts and the delaying of filling 50 positions which were committed to across a range of primary care services. That delay will last until the end of 2019 or 2020. There are extraordinary delays in a range of services across the region, including occupational therapy, dentistry and orthodontistry, dietetics and physiotherapy. The notion that positions that were promised and have been advertised will not be filled until 2020 is unacceptable and will only add to the delays and the pressure that people on those waiting lists are under.

I also understand that no maternity leave or sick leave replacements will be put in place for anyone who goes out between now and the end of the year. This is because HSE officials are curtailing and trying to manage a budget, which is one of the lowest in the CHO regions, because they are utterly frustrated in trying to engage with the Department regarding a base month on which their budget should be assessed. It seems the Department randomly assesses a month in the year as a base month to establish the budget. This model does not work and particularly does not serve the people of CHO 2, whom we represent, well at all.

I need an assurance from the Minister of State that the 20 agency staff will remain in place, that the 50 positions that have been approved to be filled and which are needed in communities in Mayo, Galway and Roscommon will be filled, and that people will get to work on addressing the waiting lists. If not, are we destined to pay for the failures regarding the national children's hospital through a lack of resources for CHO 2 to allow it to do its work at primary care level?

On behalf of the Minister for Health, Deputy Harris, I thank the Deputy for raising this issue. I will read the response I have been given.

I would like to first clarify that it is not the case that budgets are being cut. This issue can be accurately described as individual hospital groups and CHOs across the HSE needing to live within their allocated budget. Where individual hospital groups or CHOs have not demonstrated their ability to do this the HSE have quite rightly introduced certain measures and controls across these locations.

By way of background, in recent months, officials from the Department of Health have been engaging intensively with the HSE in reaching agreement on a pay and numbers strategy for 2019. The key focus in developing the strategy is to ensure that affordable and appropriate recruitment decisions are made by the HSE and that they need to operate within its pay allocations.

By the end of 2018, agency staff overtime and pay costs had reached unaffordable levels. In light of this, the HSE decided to introduce interim control measures for a consolidation period of three months to the end of June, until it received clarity on plans and financial performance for quarter 1 of 2019 from hospital groups and CHOs. The intention is for these measures to be in place for a short period, and the overriding requirement for the HSE is to prioritise the delivery of safe services within the available resources.

With regard specifically to CHO 2, I understand that this location has an agreed affordable funding whole-time equivalents, WTE, limit, inclusive of an affordable level of agency staffing. The current WTE levels in CHO 2 are in excess of this arising from significant growth during 2018 and plans been put in place to bring back this growth to within affordable levels. This includes a plan for agency conversion which is a priority across the HSE. Agency conversion provides for the direct employment of staff resulting in a corresponding decrease in agency staffing while maintaining the level of service provided in 2018. These measures include temporary recruitment restrictions and the capping of agency and overtime expenditure. The HSE’s decision to introduce these measures is based on the high levels of recruitment in 2018 and the consequential impact in 2019. It is also based on the need for the HSE to live within the resources provided to them as set out in the national service plan for 2019.

As part of this process, the HSE directorate has made it clear that these recruitment restrictions will only be necessary for hospital groups or CHOs until such time as there is clarity on plans for 2019.

On receipt and acceptance of balanced plans, these additional controls can be reviewed and removed where appropriate. The earlier that costs begin to reduce towards affordable levels, the less impact it will have on staff and services over the remainder of the year.

Responding adequately within available funding to support the delivery of all key services whilst also responding to increasing levels of demand may result in waiting lists for particular services. However, as far as possible, the CHO has confirmed that it will continue to respond to the most pressing patient and service user needs using resources as efficiently as possible.

I am afraid the response confirms all our fears. It is extraordinary. The HSE recruited for positions in 2018. The reason it recruited was because of extraordinary waiting lists but it did not plan for the resources of those extra positions during the 2019 budget. What kind of dummies are doing the accounts here? That is basic accounting. When one expands a service, one resources it to extend and provide the service. One does not provide the service for four months, provide no funding for it in the following years, and cut back the service that has been given to patients who are fed up of being on waiting lists and whose conditions are worsening because they are on waiting lists.

I understand this is the only CHO region where this action is being taken. Are we now destined, in Mayo, Galway and Roscommon, to have longer waiting lists, further delays in treatment and unfilled positions because basic budget skills must not be available within the Department of Health and the HSE?

It is not good enough. The Minister of State is merely reading out a reply that has been provided for her. As a constituency Deputy, she will be aware that the line, "as far as possible, the CHO has confirmed that it will continue to respond to the most pressing patient and service user needs", does not mean anything. That means there will be no additional home help hours, there will be no extra occupational therapy, OT, services and no emergency orthodontic services, the lists will get longer and people's frustration will increase.

The Minister keeps trumpeting the fact that the Government is spending record levels of money on health and the highest in the OECD - spin, spin, spin. At the end of the day, people are suffering because somebody is not doing his or her job right in accounts.

The Minister of State's response is confirmation of what I have been told. At this stage, many people are despairing, in particular, parents of children who are on those waiting lists.

The Minister for Health recognises the need for individual hospital groups and CHOs to operate within their allocated budget considering the national service plan approved for 2019 and respects the prudent approach being adopted. He has also pointed out that the HSE's overriding requirement is to prioritise the delivery of safe services within the available resources.

As stated earlier, the HSE directorate has made it clear that these recruitment restrictions will only be necessary for hospital groups or CHOs until such time as there is clarity on plans for 2019. On receipt and acceptance of balanced plans, these additional controls can be reviewed and removed where appropriate.

The sooner that costs begin to reduce towards affordable levels, the less impact it will have on staff and services, as I already said.

While these temporary measures are in place, the Department of Health has made it clear to the HSE that it must proceed with filling approximately 2,000 additional approved and funded development posts to maintain and enhance key services across the acute, mental health and primary care areas.

Community Banking

I thank the Ceann Comhairle for selecting this important issue for debate this evening. I want to record that the Deputy Eamon Ryan, leader of the Green Party, supports my contribution, on behalf of the Labour Party, on this issue.

One of the myths used to explain why Ireland failed to develop economically between independence and the 1960s is that there was a lack of capital for investment. There was, in fact, an abundance of savings in the Irish banks available for investment but rather than invest this money in Irish enterprises, the Irish banks were mainly invested in the UK money markets. This was facilitated by the fact that there was a one-to-one link between the Irish pound and the pound sterling. As a result of the failure of Irish banks to invest in enterprise creation, the State was obliged to set up a number of State-backed lending institutions, including the Industrial Credit Corporation, the Agricultural Credit Corporation and the Industrial Development Authority, now Enterprise Ireland, which could be regarded as one of the largest venture capital funds in Europe.

The State provision of finance for development was necessary because of the extreme risk aversion of the main banks, which were reluctant to invest in manufacturing industry. The main banks were always eager to invest in so-called "property development", which in many cases was, in fact, property speculation. The over-exposure of the Irish banks to the property sector led to their collapse in 2008 and their rescue by the taxpayer at the cost of €64 billion. It is important to recall that while the Irish banks tried to blame their insolvency on the global financial crisis, they would have had to be rescued even if the global crisis had not occurred when Ireland's property bubble inevitably burst.

Since their rescue by the taxpayer, the banks have been frantically rebuilding their capital by charging interest rates to borrowers which are grossly in excess of the rates they pay depositors, or the all-time low rates at which they can borrow on global markets. Having lent recklessly during the building boom which they fuelled, they now will not lend except for the safest of projects and the most demanding of collateral.

I understand the Department of Finance has hired Indecon to carry out the evaluation of community banking promised in July last when the Minister published the local public banking report. I have read the terms of reference for this evaluation and I am concerned that the Department of Finance has written them in a way to tie the hands of Indecon.

Indecon is a very respected group. I believe Indecon will do its work diligently but the Department has it chasing rainbows and looking for unicorns. At least, that is what I think when I read about measuring "market gaps" with regard to SME lending. How can one measure lending that is not happening? The hard-pressed businesses know well the pillar banks are not interested in serving them. How about the Minister reading his own Department's SME credit survey that records that microenterprises have a 20% loan rejection rate?

Even if an SME is lucky enough to get a loan, the banks will apply crippling interest rates to that loan. The cost of loans to SMEs are way above those of their EU counterparts, by up to 200 basis points in the case of smaller loans of €50,000 or less. There is no justification for this level of price gouging of the indigenous companies.

Any gaps in the SME loan market are currently being filled by shadow banking, which is what all this alternative finance being offered to SMEs is. This is not a proper banking service that the small businesses up and down the country are crying out for. It is also a source of funding that will likely dry up in the teeth of another recession. History has proven this to be the case.

The report published by the Department of Finance in July last was an incoherent one, opposing investment in a public banking system on the grounds it might "crowd out" the existing pillar banks. Once again, the Department of Finance mandarins appear to confuse the pillar banks' interests with the national interest. Mr. Draghi has clearly pointed to the quasi-monopoly situation in Ireland as being a cause of our high interest rates.

Still, the Department continues to defend the pillar banks. Most recently, before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, it was supporting the right of the banks to sell off loans to vulture funds. They claimed to be speaking truth to power, while all the while they are the ones who have the power to hide the truth - the truth being that the banks are continuing to have a free hand to ride rough-shod over their customers, who have no alternative but to submit.

How come, on the one hand, the Department of Finance can produce a report justifying the pillar banks charging high mortgage interest rates, even blaming the very households that suffered the worst in the last recession, but on the other hand, AIB can suddenly lower mortgage interest rates significantly the day it was appearing before the committee?

The Government, and the Department of Finance mandarins, need to stop their obsession with analysis of whether there are any market gaps and focus instead on the common-good aspects of a public banking system to serve our local economies. What cannot be measured in cold hard facts is the comfort it would bring people up and down the country to know that they had an alternative institution that is mandated to operate in the interests of their local economy, that would not throw in the towel at the first sign of difficulty but would have a real stake in helping businesses to work through and resolve their problems because the bank's success would be based on its local business success.

Does the Minister believe he is doing the people of Ireland a favour by maintaining the status quo for the pillar banks? Mark my words, no one will be thanking the Minister when the next recession comes around and we are still stuck with the same old pillar banks charging us over the odds at every turn.

I thank Deputy Penrose for raising this issue and giving us a chance to make a statement on it. I apologise that the Minister for Finance, Deputy Donohoe, could not make it this evening. I am happy to take this matter on his behalf and pass on the views of the Department in answer to the Deputy's question. I will pass on the Deputy's concerns to the Minister as well.

As Deputy Penrose mentioned, the Department of Finance and the Department of Rural and Community Development were tasked with fulfilling a programme for Government commitment to thoroughly investigate the German Sparkassen model for the development of local public banks that operate in well defined regions.

Both Departments prepared a report of the findings of their investigation which involved an analysis of the Sparkassen model and the local public banking in Ireland report was published in the summer of 2018. There was considerable analysis undertaken and careful consideration of a proposal for how the German Sparkassen model of local public banking might have been implemented in Ireland. Ultimately, the report found that there is not a compelling case for the State to establish a new local public banking system in Ireland in the proposed form. The cost to the Exchequer of the proposed new model was estimated at a minimum of €170 million.

However, the Department wants to be very clear that there is no impediment to any interested parties pursuing the establishment of a system of local public banks without the involvement of Exchequer funding or State ownership. From my own personal interest in this topic, I originally thought the campaign and movement needed permission to be able to establish the public banking system. I met a local man who we all know, Mr. Noel Kinahan, who is doing great work in pursuing this area. My understanding was that the campaign was for a licence to be able to do this and not necessarily to have State investment. The report has said it is not necessary for the State to invest in this model but it can still happen by itself.

Notwithstanding the conclusion of the local public banking report, a commitment was included in the report to carry out an independent evaluation of local community banking to establish whether its objectives, including financial inclusion and rural and regional development, could be furthered by other means in Ireland. Following a procurement process, the contract was awarded to Indecon earlier this year and work on the independent evaluation is well under way. The report is expected to be completed later this year and will be a useful document.

The Government is committed to supporting access to finance by indigenous small and medium enterprises, SMEs, as well as regional and rural economic growth. A range of supports and schemes have been put in place over the past few years, including a €300 million Brexit loan scheme launched in March 2018. The scheme provides working capital loans of up to three years to Irish SMEs to enable them to adapt and innovate in response to the challenges posed by Brexit. More recently, a future growth loan scheme has been developed to provide long-term investment finance of eight to ten years to help Irish businesses invest strategically in a post-Brexit environment. The scheme was launched on 27 March and, since yesterday, SMEs are able to apply for loan eligibility through the Strategic Banking Corporation of Ireland, SBCI.

As well as the Brexit loan scheme and the future growth loan scheme, there are other Government measures in place to support the financing needs of SMEs. They include the credit guarantee scheme, the micro-enterprise loan fund, local enterprise offices and the credit review office. The matter refers to the difficulties in lending to SMEs and in that regard it is worth noting the finding from the most recent Department of Finance SME credit demand survey which highlighted that when pending applications are excluded, 86% of credit applications to banks were approved or partially approved. The main stated reason for credit declines was a failure to meet the bank’s lending criteria, particularly in terms of account performance and history, followed by the applicant’s ability to repay.

It is also worth noting the consistently low demand for credit from Irish small businesses indicated by SME credit demand survey. The demand for bank lending by Irish SMEs has fallen from 40% in the initial survey in 2011 to the current level of 20% in the most recent survey, covering the period April 2018 to September 2018. Many Irish businesses are doing well and appear to be using their own funds instead of external financing to meet their needs. The uncertainty surrounding Brexit may also be contributing towards the subdued demand for banking lending.

Additionally, it is worth noting that only 1% of SMEs that did not seek credit stated it was due to it being too expensive to borrow. The main stated reason for not having sought credit in the past six months is a simple lack of credit requirements, a reason cited by 89% of businesses not seeking credit.

That is a report that was done independently of ourselves but, naturally, we all get different feedback and I am happy to hear the concerns and issues of Deputy Penrose and I will pass them on to the Minister for Finance.

According to the Public Banking Institute, "[a] public bank is a chartered depository bank in which public funds are deposited. A public bank is owned by a government unit - a state, county, city, or tribe - and mandated to serve a public mission that reflects the values and needs of the public that it represents." Public banks come in a variety of models. A public bank might be capitalised through an initial investment by the city or state, as well as through tax and fee revenue. A public bank, like a private bank, can take tax revenues and other government income as deposits, create money in the form of bank credit, and lend at very low interest rates and that is a critical thing which the Minister of State overlooked. Where private banks are committed by their business model to take advantage of low interest rates by charging higher rates to borrowers, which the Minister of State also forgot to mention, a public bank has no shareholders to pay and so can pass the low rates onto borrowers such as public agencies, local businesses, residents, and students.

Public banks can also partner to underwrite or guarantee the loans of local banks to fund projects that might otherwise not be funded. Such partnering with local banks shows that public banks can be partners, as well as competitors, with local private financial institutions. Public savings banks, such as postal banks, typically offer individual savings accounts, savings bonds, remittances and other services. Around three out of four postal systems worldwide offer such banking services. Public banks are a major financial force in Germany, the EU’s most successful economy.

The need for public banks or a third banking force has long been recognised in Ireland and the Labour Party has been its proponent. The Fianna Fáil and the Labour Party programme for a partnership government 1993-1997 stated that the coalition would "develop a vigorous third banking force from within the State sector by merging the ICC Bank and ACC Bank and by seeking a merger of the new entity with the Trustee Savings Banks". The so-called rainbow coalition was also committed to creating a third banking force, but the proposal was never implemented.

Ireland is now one of the very few countries which does not have public banks that would lend on favourable terms to SMEs. The Irish economy is perilously dependent on a small number of multinational companies for our economic growth. While Enterprise Ireland does a fine job in supporting domestic industry, access to affordable finance is still a major obstacle to the development of SMEs. A public bank would be in a position to provide affordable finance for SMEs and could also offer cheap banking services through the post office network for the many people in rural Ireland who have difficulty accessing such services.

We have a great opportunity in Ireland to strengthen regional development with an alternative in the form of a public bank that would not only reshape our financial services to the real economy but also provide increased financial inclusion to all wherever they live. Does this Government have the political will to think not just of the next election but to act like statesmen and think of the next generation of industry, entrepreneurs and small businesses?

The bureaucratic reply that the Minister of State, Deputy English, gave on behalf of the Minister of State, Deputy D'Arcy, tells its own tale and is revealing of the mindset in the Department of Finance. It is adamantly against any prospect of introducing competition for the pillar banks. That is the central and key issue which is blocking the progress of a worthy proposal of a public bank.

I thank Deputy Penrose and I know his heart is close to this issue of public banking. I want to be clear. As I mentioned in my opening remarks on behalf of the Department of Finance, the Government recognises that there are a number of positive principles underlying the concept of local community banking in general and that includes the public banking concept the Deputy has put forward. There is an issue over who invests in that and who permits it.

The response I gave was not bureaucratic, it was factual. The Government made a commitment to look into this under the programme for Government because we recognised there was a strong campaign over a long period of years by the proposers of the public banking system, some of whom the Deputy and I both know, who have done a very good job of making that case. For that reason, the Government looked into this and there was a report done and an evaluation of that, after which the Government made a decision. That is not a bureaucratic response, it is a factual one. The Deputy might not have liked the outcome of the report but we have to pass that on.

Work by Indecon on the evaluation of community banking and local provision of banking and financial services is well under way. A public consultation exercise closed on Monday and the submissions received will be reviewed by Indecon over the coming period. It will continue to engage with stakeholders and other interested parties on this issue by way of a stakeholder forum and let us track that system and see what comes out of it.

Anyone who made a submission as part of the public consultation will be invited to attend the stakeholder forum. I imagine those who are proposing a public banking concept based on the German model have made a submission and will get a chance to talk it through in that forum.

There was a strong commitment to continue to work with An Post and the credit unions on the development and provision of financial and banking services provided by them to retail customers and SMEs, especially in regional and rural areas. I recently attended an event in my local credit union. I support the credit union model and that is another form of community or public banking. I am a strong proponent of that. Navan Credit Union, through Credit Union Plus, has put together a new range of services directed towards business and SMEs that will see a greater movement of the credit union sector into the provision of loans to small and medium sized businesses and that is an important step because we do encourage accommodation.

It is also important that SMEs are aware of the range of financial and non-financial supports available from the Government and its agencies. Enabling Irish SMEs to create employment and continue economic growth remains an important Government priority, as well as supporting rural and regional economic growth and development.

In a previous Government, I spent time in the then Department of Jobs, Enterprise and Innovation and it is important that we work with businesses, especially start-ups and companies that want to grow, to help them with support for their applications for finance. Very often the future plans and growth strategy of the businesses do not facilitate them seeking the finances they need. We need to work with them on that. There are soft supports available, through our agencies, to enable that conversation and the development of business plans that help SMEs to draw down finance, regardless of who provides it.

Housing Policy

As the Minister of State is aware, the deputy leader of Fianna Fáil raised this issue during Leaders' Questions today with the Tánaiste following reports in today's newspapers that a further 295 houses in Leopardstown will be sold directly to an institutional investor. What this does is reinforce how Fine Gael favours financial institutions and big corporations over ordinary citizens. The Tánaiste's answer was really disappointing. It reminds me of what the previous Government did when it welcomed the vulture funds to this country. They were welcomed and enabled to purchase non-performing loans at knock-down rates thus enabling them to make huge profits on the back of ordinary citizens. A total of 2,923 houses were sold to these institutional investors. We are forcing young people out of the market. It is not just us on this side of the House who are saying this. The Minister of State will be aware that the UN rapporteur wrote a very strong letter to the Government condemning its policies saying that we are institutionalising home ownership.

The preferential tax laws constitute a significant incentive for these people to come in and purchase blocks of apartments and large housing developments. The tax laws that are applicable to these institutional investors are completely different from those that are applicable to small landlords with two or three properties that were probably bought as a pension fund. Typically, self-employed people buy a number of properties to use as a pension fund. They do not get the big write downs that these institutional investors get.

We also have a problem with the State itself buying wholesale instead of building local authority houses, again forcing young couples out of the market. Young couples are being priced out of the market and are not getting the support they need to purchase their first home. The other night, I was out with Mary Fitzpatrick, who is running in the local elections. Planning permission is being sought for a large block of apartments on Botanic Road. People living in three different houses I visited told me that they would not mind if this development went ahead if it could be guaranteed that they could buy one of the apartments. These are elderly people living in large four-bedroom houses who want to downsize to open up opportunities to bring those type of houses back into the market but they are afraid they will be unable to do so. Unless the Government changes the regulations, they will be unable to do so.

It is really something that is hitting a nerve with the general public. It is not just people in the affected areas in large urban settings. Even when I travel around my constituency with local election candidates, people who will not be affected ask me how the State can do what it is doing. They ask how the State prioritises international funds over our own citizens and prevents them from getting on the property ladder and purchasing their first house. Change is needed. I know the Minister of State understands the challenges facing young couples. I ask him to tell me in his reply that the Government has listened to what has been said on this side of the House and that change is imminent.

I thank Deputy Troy for raising this issue in a formal capacity so we can have a debate around it and bring some rationality to the conversation. Like Deputy Troy, I spend a lot of time meeting people for many different reasons on a weekly basis. There is a misunderstanding of what is happening in some parts of the housing market. When one spends time with people and has the chance to tease things through with them about the importance of all the different types of house building programmes and the different types of investors such as the State for social housing, pension funds, individuals buying their second or third home, first-time buyers and second-home buyers, one can see that we need all the different types of financial arrangements and purchases coming into a system to generate a full and sustainable market for housing. I want to be very clear about this because Deputy Troy tried to allude to what Fine Gael is supposedly about. Fine Gael and Independent members of this Government, with the support of many others here, want to deliver a sustainable housing construction market. This means that we need a combination of all sorts of different sources of finance and a combination of private housing, affordable housing, which is subsidised, properties for rent and properties for purchase. We need to supply the market for first-time buyers. All the different categories of market need to be supplied. The overall target must be the number of houses we need every year.

In the past, we have had boom and bust when it came to construction. We have had 10,000 houses one year, up to 20,000 in another year, up to 90,000 in another year and then back down to 10,000. That is not a sustainable housing construction sector. It is not a sector in which people can safely invest their time and skills in education to develop for work in the construction sector. It is not a sector in which someone can develop his or her skills running and developing a company because it is not a safe place in which to do so. A safe place to invest is a housing construction sector that delivers about 30,000 units every year for the next 25 years. We have produced the population projections under Project Ireland 2040 and we know we need to deliver and get to about 30,000 houses every year for 20 years. Naturally, it would be great if we could wave a magic wand and have 50,000 tomorrow to deal with the current crisis but we must build up to that level. This year, about 23,000 houses will be built. We must also put in place a system that brings us close to 30,000 and keeps it at that in a managed and co-ordinated way that is right for everybody. I met people last night who paid probably twice as much for their house 15 years ago - a price they should not have paid but were allowed to pay because they were allowed to borrow way beyond their capacity. It was never sustainable in the first place yet they were allowed to do it. We cannot repeat that. I want to be clear on that before I go into further detail.

The Government is committed to increasing the supply of all types of housing, including social, affordable and private housing. Institutional investment in the private rented sector is just one aspect of this increasing supply. The Deputy is right that it should not make up all of it and it certainly is nowhere near that. It will not be near that because institutional investors will invest to a certain level and that is where it will go. The economic division of the Department of Finance recently published a report, Institutional Investment in the Housing Market, to bring clarity to the potential impacts of higher levels of institutional investment on the residential property market. The report examined the role of institutional investors and large-scale landlords in the Irish residential property market. It found that the combined purchasing activity of property funds, real estate firms and real estate investment trusts is relatively small accounting for a net 1% of transacted units in 2017 and not far above that in 2018. We checked the figures as well. Ownership of rental properties by large-scale landlords - those who own more than 100 rental units - is also low, accounting for 4.6% of the wider market. Yes, there is some activity this year. This is housing supply that will probably come in during 2020 and 2021, not necessarily this year. In some cases, they are pre-orders.

There are approximately 340,000 tenancies registered with the Residential Tenancies Board, RTB, of which approximately 310,000 are private rented tenancies. The vast majority of landlords, just over 70%, own just one property with a further 16% owning just two properties. Almost 86% of the registered rental housing stock is possessed by landlords with less than ten properties so it is not the case that it is 100% of the market, which was the impression being given this week. In any given week, there will be certain news items that take over. It gives the impression that all the activity involves these multinational investors. That is not the case.

In the context of a residential rental sector which is largely composed of small-scale landlords, there are certain benefits associated with institutional landlords as part of that mix. Product mix is important and some tenants may prefer to lease from a larger landlord while some may not. What is important here is that we increase the overall supply as well as introduce changes in legislation to protect tenants and give them more rights and services. There is a focus on this issue because the price is quite high in some cases because we still have a dysfunctional housing market and a dysfunctional rental sector. As we increase supply across all the different sectors, it will help smooth that over and deal with that crisis and people will then accept that we need to have different types of investors, including the person buying his or her own house. We need to generate enough supply and to do that: we need all people coming to the table.

The Minister of State is not saying anything new. Nobody is saying that it involves 100% of the market but institutional investors' share of the market is growing rapidly because they are buying more and small landlords are getting out. The reason small landlords are getting out is because they are taxed to within an inch of their lives. A total of 52% or 53% of the rent a small landlord gets goes on tax. Does the Minister of State think it is fair that there is a different tax system for institutional investors versus small landlords? I do not think it is. Does he think it is right that these funds are coming in, distorting the market and driving up the cost of properties and rent?

Savills projects that rent will increase by a further 17% in the next three years. I really do not know how people can afford to rent any more.

If the Minister of State wants to talk about supporting and changing the market, he needs to support the young couples who dearly want to get into the market and buy their first house but who are unable to do so. As for the Rebuilding Ireland mortgage which the Government announced and launched and which was hailed as the panacea for all things, that money has been used up and the criteria for the scheme are very restrictive. I have been in contact with a young man who is separated and looking to buy a second house with his new future wife. Due to the fact that he was in a situation before, he was automatically disqualified. The scheme is far too restrictive.

If we want to change the market and support our citizens, the Government needs to change the regulations brought in a number of years ago that drove up the cost of houses. I am not talking about reducing the number or quality of the regulations or their quality but the time it takes to go through the certification process in the Republic of Ireland should not be a multiple of the time it takes in Northern Ireland. That simply should not be the case. We need to suspend development levies for developers who are willing to sell their houses as affordable houses to young clients. What we should be doing is giving breaks to our own citizens, not tax breaks and incentives to large institutional companies to come in and piggyback on our citizens. Unfortunately, the Minister of State has said nothing thus far which gives me any comfort that the Government will change tack.

Again, I need to address a number of those issues. First, I will address the issue of regulations. The Deputy will be familiar with projects in his area that were built to a poor standard. In fairness, I know he is not a supporter of the latter. I wish to clarify to everyone here that there is no intention of changing the regulations such that we will have a poorer standard of property building.

I referred to the certification process.

We entered government with a regulation process that had allowed too many developments to be built to a very poor standard. A lot of my time is spent working with people in Donegal and Mayo living in homes affected by mica, people in our counties whose homes are affected by pyrite, and people in apartment blocks in Dublin that are built to a poor standard. We are not going back to that.

That is not what I said. The Minister of State should be fair.

I am not stating that it is what the Deputy said. I will be very clear, however: there is no intention of relaxing regulations. We want top-class, quality houses, and that is what people are investing in. There are too many people out there who have high mortgages on poor-quality houses. That cannot happen again.

The certification process is often blamed here. It is claimed it is too costly. The cost does not necessarily relate to the certification process; it is the additional cost to build a house properly, which did not always happen in the past, to meet those regulations. There are high-quality homes being built because of the certification process and proper regulations and adherence to them. If done properly, the certification process can be carried out without causing too much distress to people. I ask the Deputy to trust me on this, though: people are much better off investing in a certification process. I know that people choose not to go this route when building their own one-off homes. I would not recommend this because I have seen too many houses that are not built to a high standard.

I want to be very clear that the tax system for individual landlords is being considered. A working group is in place to examine this in order to see whether individual landlords are being treated fairly. As for institutional investors, tax changes have been made to encourage resources to be pooled together to be invested in housing because we want to develop a proper, functional rental market. We accept that the rent is too high and we are all working to increase supply to bring rental costs down. This is a problem in the short term, but we will be fixed with supply in the long term. I have been working with the various developers weekly on many of the sites to which I refer. The State does get involved. We purchase houses and compete for vacant properties that no one else is purchasing. Some of these sites often get activated because an investor, the State or someone else steps in to buy a chunk of the properties from the plans to get the scheme started. We do this in some cases too because, again, we want to keep sites open and keep activity going. It is important that we get the right blend, and we are getting it.

An impression has been given this week that it is all skewed one way, which is just not factually true. If Deputy Troy analyses the market last year, he will see the sectors involved. There are probably fewer than 4,000 units in the investment sector; up to 6,000 units are being used for social housing purposes; the housing market itself accounts for over 11,500 units; and one-off housing accounts for 5,000 units. This is quite a reasonable divide across the system, so the impression being given this week that it is all skewed in one direction does not represent the truth.

The Dáil adjourned at 6.05 p.m. until 2 p.m. on Wednesday, 8 May 2019.