The purposes of this Bill are to raise the statutory limit for issues from the Local Loans Fund and to give power to write off the outstanding balances of certain loans which have proved to be irrecoverable.
The existing statutory limit for issues from the Fund is £170 million, having been fixed at that level by the Local Loans Fund (Amendment) Act, 1961. The Bill proposes to increase the limit to £250 million.
The Fund is the principal source of loan finance for the capital programmes of both the urban and rural local authorities. Housing has constituted, and continues to constitute, the major element in these programmes. Loans for slum clearance and other rehousing schemes undertaken by the local authorities from the time of the establishment of the Fund in 1935 up to the 31st March, 1964, amounted to £74 million, representing just half of the issues from the Fund in the period. Loans under the Small Dwellings Acquisition Acts and similar legislation, including the special Gaeltacht housing code, and in respect of supplementary housing grant schemes operated by the local authorities, accounted for £43 million, making a total of £117 million for all housing services. These figures underline the importance of housing in the public capital programme.
Services other than housing—principally those relating to public water supplies, sewerage, hospitals and vocational schools—absorbed £32 million. This brings the grand total for issues from the Fund over the whole period from 1935 to 31st March last to the very large figure of £149 million. The total figure includes an amount of £23 million lent over the past decade to Dublin and Cork Corporations for housing and other purposes.
In addition to issues actually made, account must also be taken of commitments incurred on schemes in progress and planned which have yet to mature. On this basis and bearing in mind that at Budget time requirements for 1964-65 were estimated at £16½ million, the present statutory limit of £170 million needs to be increased.
A temporary falling off in issues is expected as a result of the building strike, but a significant increase is anticipated next year and in the following years according as progress is made with the enlarged programmes for housing, hospitals, vocational schools, sanitary and other services. It is proposed, therefore, to raise the statutory limit for issues from the Fund to £250 million and this is provided for in section 1 of the Bill. The increased limit is expected to suffice for a period of about four years.
I should, perhaps, say that section 1 of the Bill is purely an enabling section, that is, it will enable the issue of loans from the Local Loans Fund to be continued. Actual issues from time to time must, of course, be geared to the available capital resources. An increased level of investment in building and construction is forecast in the Second Programme for Economic Expansion. This increase will impose a heavy strain on national resources. Its achievement will depend primarily on the necessary finance being forthcoming through increased saving by the community in one way or another— by bigger subscriptions to national loans, more small savings and so on.
As I mentioned earlier, the Bill is also intended to give power to write off the outstanding balances of certain loans which it has been found impossible to recover. Section 2 of the Bill makes the necessary provision. The loans were made over 50 years ago under various last century Land Improvement Acts for the improvement or purchase of land or farm buildings. When the Local Loans Fund was established formally by the Local Loans Fund Act, 1935, the balances of these loans then remaining to be repaid became part of the assets of the Fund. It has not been possible to recover the sums now outstanding because of the death, emigration or poor circumstances of the farmers concerned, change of ownership of the land or other reasons. Further recovery action is impracticable and, accordingly, it is proposed to write off the sums involved. The full amount in question is £272, which is quite insignificant in terms of issues from the Fund.
I hope the provisions of the Bill will be acceptable to the House.