Seanad Éireann díospóireacht -
Thursday, 6 Jul 1972

Vol. 73 No. 4

Local Loans (Amendment) Bill, 1972 ( Certified Money Bill ): Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Parliamentary Secretary to the Minister for Finance (Mr. Lemass)

This Bill is merely an enabling provision which raises the limit on loans from the local loans fund from its present ceiling of £400 to £600 million. The limit has to be raised, if the issue of loans from the fund is to continue. At the end of March last, issues from the fund totalled £375 million and the capital budget for the current year provides for the issue of loans totalling £45.73 million. The ceiling of £400 million will therefore be reached in the next few months.

The simplicity of the Bill belies the importance of the local loans fund. Local authorities play a major role in providing some of our most important infrastructure, such as housing and sanitary services. Local bodies are also active in such fields as health, education and the provision of harbour facilities. They also provide a wide range of miscellaneous services for the community, such as swimming pools, libraries, fire stations abattoirs and so on.

To carry out their responsibilities in the areas to which I have referred, the local authorities require very large sums by way of capital. Since they find it rather difficult to borrow significant amounts of capital in the private sector of the economy, the principal source of the moneys they require is the local loans fund.

As I mentioned earlier, issues from the fund up to the end of the last financial year totalled £375 million. Of these issues, £186 million or almost 50 per cent of the total, has been spent on the provision of local authority housing. The services which local authorities provide for the less well-off purchasers of private houses, such as house purchase loans and supplementary grants, accounted for a further £102 million. Issues for housing, therefore, totalled £289 million or more than 77 per cent of total issues from the fund.

Issues to finance sanitary services works, consisting mainly of works for the provision of water and sewerage facilities to meet the ever-growing demand for these services created by private housing and industry, have totalled almost £50 million. The balance of issues from the fund, amounting to some £37 million, has been spent on the provision of vocational schools, public hospitals, dispensaries, homes for the aged, harbours and a variety of miscellaneous services.

The last amending Act, the 1968 Act, raised the then existing limit of £250 million to £400 million. The present Bill will raise the limit by a further £200 million. This new limit should enable issues from the fund to continue for a few years ahead. This large increase in the limit is being sought to match continuing expansion of the capital services for which the local authorities are responsible.

I trust that the Bill will be acceptable to the House.

Mr. Reynolds

We are all delighted with the increases proposed in this Bill. One might point out here that a delay exists with regard to the erection of houses. If we take, for example, a local authority preparatory scheme, before the scheme is sanctioned it must be submitted to the Department of Local Government. This causes undue delay. When it is accepted and let out to contract it again has to be referred to the Department for sanction. From time to time the local authority are notified of the amount of money available for the various services under the heading of houses, swimming pools, hospitals, vocational schools, water, sewerage and sanitary services generally. When the Department are approached at the first or second stage the reply is to the effect that money is not available. That is understandable enough. What is wrong is the delay that occurs. If we are notified that a certain amount of money is available it should be there when the application is made.

I was delighted that in the past few days that the income limit for people borrowing money under the Small Dwellings Act has increased from £1,500 to £1,800. It is the money given to local authorities from this found that is made available to borrowers. It was time to increase that to £1,800 but I wonder if £1,800 is enough.

The local loans fund does not accept any responsibility for people over the £1,800 figure. Local authorities have to find this money themselves from various places, from insurance companies and local banks. Up to now, I know that particularly in my own county we had no money to lend to people who are over the income limit of £1,500 but in the past week or two we were hopeful to get it from an insurance company.

The category of people over £1,800 should be taken into the fund and the money should be made readily available to them. I think the maximum made available at the moment for building or purchase of a house is £3,000. I am not too sure of that figure, but if it were £3,000 or even a little better, I wonder if that figure is realistic at the moment, due to the cost of housing and so on. I am sure the Parliamentary Secretary will have a look at this and tell us the exact position.

Ruairí Brugha

I welcome this essential Bill and ask the Parliamentary Secretary if he has any details of the amounts spent under the different headings, such as vocational schools, public hospitals, dispensaries, homes for the aged and harbours.

In many areas of administration, including public works, although information is available there is a need for better communication with the public generally. It would be useful if, as in some other Departments, improved means of communication were devised whereby people would know what is under way in the various areas and also what is coming and when. One finds that projects may be on the way and people are not aware of them. I feel confident that Senators on both sides of the House will welcome this Bill and the provision to raise the ceiling from £400 million to £600 million.

Mr. McDonald

I, too, welcome the Bill which provides for the continuation of the present system of operations of the local loans fund. This has proved to be an excellent means by which local authorities were able to find funds for many of their schemes. Although the demand is far from being met by the local authorities—although, by and large, local authorities have proved to be most progressive and endeavour to meet the demands on the services they must provide—I regret that the Minister did not bring a few new sections into this Bill to encourage more and more people in the middle income group and the top bracket of the lower income group to tackle building and provide their own housing.

We should endeavour to encourage more and more people to build their own homes and to make it easier for them not just to sit back and crib about being so long waiting on a housing list. It takes some dedication for a young couple to tackle building a home of their own if they are on an income of only £20 to £25 a week. We have the occasional devoted person attempting to do this.

It is in a situation such as this that the State and the local authorities should bend over backwards to help these people. Very often we find on the local authority housing list people with almost £2,000 a year income sitting back cribbing and asking to be re-housed. It is a pity that there is nothing in this Bill to emphasise and to meet this particular need.

There should be money available from the local loans fund for the provision of services which are not the most popular the councils may be called on to provide. If there was a special allocation for each county each year that they could draw on whereby the local authorities could, for instance, provide accommodation for itinerants, it might be a help to the members of local authorities to do a little more for these underprivileged classes. That problem gives many members of local authorities a great deal of trouble. They all feel it a pity that they are not in a position to do more. Then again it is not really a line of country that is designed to win votes for ordinary councillors. If the State would give the lead by giving an allocation to each county of £X per year, at least there would be a very strong case for councillors then to do better in this field.

If young married couples who set out to build their own houses could get some guarantees as to what the rates of interest are likely to be they would be able to plan their income and expenditure with some degree of certainty. That would be a great stimulus to these people. At least they would have a fair idea of what they would be expected to pay during the years when the greatest strain will be made on their finances, that is, when they are starting families and beginning to build and furnish their homes.

The Minister has given the figures of the total amounts of money allocated by the local loans fund. I should like to know how much of this has been repaid to the fund since 1935. It would be interesting to see exactly what the amount has been. I should like if the Minister could also break down this repayment figure into how much was capital borrowed and how much represented the interest.

In my own county in relation to the latest purchase scheme, the regulations for which are dictated from on high in the Custom House, people who ought to avail themselves of a purchase scheme to own their houses find that on a house costing £2,500, with repayments spread over 35 years, they would have to pay with service and loan charges something in the region of £8,500 before they would own their houses. This is an exceptionally high burden to place on a young person's shoulders. Nevertheless, there are people who wish to pay this price. It is one of the nice things about the Irish people that everybody wants to have their own home. This is where we differ from many of the continental countries, where the people are quite satisfied to live in sometimes quite small flats. One sees there very few housing schemes the like of which we have here. Since we have this distinction we should encourage the poorer sections, especially, to realise their ambitions.

Some years ago the Minister for Local Government promised, in order to expedite the building of houses by local authorities, that it would only be necessary for the plans of a house to be submitted once for sanction to the Department. The Minister has slipped back slightly on his tracks. When we eventually get sanction for a housing scheme, after waiting many months, we must look for sanction for the money to build the houses, a process which takes altogether too long. We have an unfortunate example of this in Abbeyleix, where we are endeavouring to build 12 maisonettes for elderly poor people. We are entering another year and sanction is still not forthcoming, either for the plans and specifications already submitted or for the tender accepted. We are also waiting for sanction for the loan.

We should evolve a situation where the Departments concerned would notify the appropriate council what moneys will be allocated per year so that they can plan appropriate schemes for their areas.

I should like to see the Departments of Local Government and Finance experimenting like this, even for a limited period, in regard to housing. It might encourage local authorities to work within a four or five-year plan in order to clear their housing waiting lists. It would be of tremendous benefit to those people who are on the various housing lists throughout the country. It would also save people asking when a certain housing scheme would begin. Public representatives pass on information— whether it is from the council or the Department—that certain schemes will begin in a particular month but this is usually only a guess. Time marches on, and our Departments of State, which are richly endowed with staffs of very high calibre, should be able to improve the ordinary administrative process. The drawback in this is that sometimes Departments do not realise that they may not be as efficient as we are led to believe. With expenditure increasing from year to year, the quicker we can build our houses and lay our sewerage and water schemes the cheaper it will be on the country.

It is most important that our allocations should be spent in as diverse a manner as possible. I had the honour last week of being a member of an Irish delegation to an environmental conference in Europe. Arising out of this conference I would advocate that we should press for a greater percentage of the moneys allocated from the local loans fund to be spent on sewerage schemes. Many of the sewerage schemes in most of our country towns and in Dublin are too antiquated. They have not been modernised to meet present day demands. Now is the time, while we still have a reasonably acceptable environment, to step up the provision of our sewerage works, to modernise our effluent disposal and sewage farms, and to ensure that our rivers will not be further polluted. This matter should be treated with urgency, but it seems to have escaped the attention of many people over the years.

In 1970 the Department of Lands spearheaded Conservation Year. It is regrettable that we have not had since then any follow-up legislation to ensure that the environment of our country, which is in the main unspoilt, will be protected for future generations. If each Department—as they are not getting a specific lead from the Department of Lands at present —would give some preferential treatment to these schemes, they would be doing a good day's work.

In my own county we have a very heavy list of priorities for sewage disposal schemes. On the last occasion I inquired about the position in the Department of Local Government I was informed that the amount of money required to clear their list of priorities was somewhere in the region of £64 million or £65 million. I presume this amount of work will have to be spread over quite a number of years because we spend only £4 or £5 a year on some of those schemes. Perhaps there should be a reappraisal of the actual priorities as operated by the Department of Finance. Because the Department of Lands appear to have fallen down on the job I would ask the Minister for Finance—the Parliamentary Secretary's great interest in this field is well known—to give a more definite lead, through the Board of Works, in the years immediately ahead.

In conclusion, I again welcome this Bill. We have made reasonable progress since the last amendment to this Bill in 1968. I look forward to the limit which is set out in this Bill being achieved in the not too distant future.

Mr. Keegan

I, like previous speakers, welcome this Bill. The fact that it has come before the House is a clear indication of the expansion taking place in the field of State and local government spending at the present time. Those of us who are members of local councils know very well the amount of capital required today to keep the services running efficiently. The continued demand for housing loans, water, sewerage and sanitary services is evidence of the people's determination to provide their own homes and thereby acquire a certain amount of independence and security.

People who avail of the services of the local loans funds and so on are the people we should make every effort to help. They have shown by their industry and thrift that they are determined to enjoy the maximum measure of independence possible. They are not sitting back and waiting for the local authorities to provide them with homes. For that reason something should be done, if at all possible, to provide them with loans at a low rate of interest. Every pound at present being made available for house loans is being taken up. In fact, there are long lists of applicants for housing loans. It is money that is bound to pay its way and provide worthwhile investment for the country. I would ask the Parliamentary Secretary to explore ways and means of giving house loans at a lower rate of interest. I know there are many problems involved but it is extremely important to explore every aspect open to us to see if some relief could be granted to those people.

Even with increased borrowing many projects are still held back because of lack of funds. When local authorities embark on expansion programmes it is only natural that many thousands of pounds will be required which heretofore were not needed. Expansion is progress and we are making progress. Some effort should be made to produce advance programming and advance planning in order to enable local authorities to carry out long-term plans in the fields of housing, water and sewerage schemes and so on. This would enable a great deal of administration work to be undertaken in advance and it would enable local authorities to continue advancements at an even pace. We know that local authorities in the past were held up because of lack of capital and if we have advance programming and proper organisation we can ensure continued levels of employment in the building industry and on water and sewerage schemes.

The additional money being made available for schools and hospitals will be most welcome. The main outcry today is for additional money for school extensions, particularly for extensions to vocational schools. I am pleased to note that more money is being made available for that sector. In my own county, and in Mullingar in particular, we have a vocational school which is totally inadequate to cater for the number of pupils wishing to enrol. The classrooms are hastily erected prefabricated structures and are completely unsuitable for present day needs. I am glad the Minister and the Parliamentary Secretary have seen fit to provide more money for this sector.

The same case can be made for hospitals. We are continually crying out for extensions to various hospitals throughout the country. The increased money being provided is an indication of the continued improvement of our hospitals service. I am glad to note that more money will be made available for health boards to enable them to carry on with their programme of improvements of our hospitals service.

In general, this new capital allowance will be welcomed because it guarantees continued employment and it guarantees greater independence and security for our people. For that reason I welcome the provisions contained in this Bill.

Mr. W. O'Brien

I would like to welcome the increase in the local loans fund but when we speak of increases we have to take into consideration the effect of those increases. In spite of this good increase, the amount of money in the local loans fund will just about pay for the same amount of services as heretofore. I read in yesterday's papers that a decision has been made to increase the amount of loans granted to people purchasing their own houses. That improvement is welcome. I also read in the paper that there is a move by the Government to bring about a ceiling on the price of houses. For quite a number of years now the loans and grants which were available did not go into the pockets of the people for whom they were originally designed.

I know that there are many building contractors who will tell me there is no profit to be made from house building but I believe there is. The grants and loans are not serving the purpose for which they were originally intended. Somebody who raises a loan of £3,000 with 9½ per cent interest will pay back close on £10,000 over 35 years at the maximum. At the last stage he could be paying back at the rate of £9 or £10 a week, including rates, and that is a pretty hefty sacrifice for any man with a family. Very often that man is in a category who would normally qualify for local government housing.

The Department and the local authorities should have a special ceiling to cater for those on limited incomes. The man who attempts to build his own house on a wage of £20 or £22 a week is faced with a reduced loan, because his income is not considered adequate to meet the repayments. Very often people on low incomes have to depend on relatives or to raise money apart from county council grants in order to meet the price of a house. They have to pay up to £1,500 for half an acre of land. For that reason, the choice is very limited and the Parliamentary Secretary should note that those not exceeding a particular figure should get special concessions.

I know that a large number of local authority houses are being built but at present local authority house tenants are paying, in most cases, the economic rent. The Department or the local authorities are losing very little in the vast majority of schemes in my own county. The workers are, therefore, paying back in a big way any concessions they have received.

There has been considerable delay in the implementation of sewerage schemes throughout the country. This should be speeded up because people in rural areas are making big contributions towards group water schemes. In doing this they are removing from the Department the cost of providing rural areas with piped water schemes, and about ten years ago this would be considered as a very hefty sum. About the year 1964-65 the Department stated that the demand would be too great. They then encouraged people to start group schemes, and the people responded magnificently to that call. For that reason the Department and local authorities should give every assistance possible. In this connection, the Department of Local Government should see their way to paying for the servicing of group pump schemes. Very often the resources available to these schemes are very limited and they are faced with an annual bill of £400 or £500 from the ESB. There should be some subvention included in the capital charge for such services.

Mr. Honan

Loans from the local loans fund are of great importance to local authorities, as is their availability and the purpose for which they are used. I should like to refer to the last paragraph of the Parliamentary Secretary's speech. The intention is to build this fund up to £400 million. When a £400 million commitment is mentioned, anybody must realise that this works out roughly at £130 per head of the population. However, the responsibility will fall on a much smaller number of people.

What is the most sensible way of using this money? Every member of a local authority knows from experience, through meeting deputations from voluntary bodies and societies, that each area wants a fairly good slice of the cake. As far as the housing situation is concerned, the greatest thing that bedevils local authorities is the non-availability of land at a reasonable price.

The Parliamentary Secretary referred to the provision of infrastructure, such as water, sewerage, footpaths, light and the amenities that will make a place habitable. If the local authorities carry out such development before plans are finally decided, it is obvious that those who own the land will have acquired a new interest, towards which they have not contributed anything themselves.

The price of agricultural land, which may be valued at up to £300-£350 per acre then automatically becomes £2,000 per acre overnight. I have some experience of the housing situation and I know that this is what bedevils local authorities in the provision of houses. When all these matters have been taken into consideration, the cost of providing land, which normally must be preceded by a compulsory purchase order, is the basis of what eventually will be the cost of the houses. The local authorities themselves are to a great degree responsible for providing this infrastructure before they have decided what they are going to do. The sensible thing for any local authority to do would be to buy land where there is no existing infrastructure. If the infrastructure is provided there is a wild escalation in price.

I agree with Senator O'Brien that the final cost of building houses weighs heavily on the people who are going to buy them. It has been suggested that there should be a subsidised or special rate of interest given for building houses. The experience of anybody in local authorities is that, if you increase the subsidies or loans, the immediate result is that contractors and everybody else will hive off these benefits. As Senator O'Brien has said, the money does not reach the pockets of the people it is intended for.

It seems that it is not possible to think of a better way of providing loans, grants or of subsidising the interest rates so that the house purchasers will benefit. This is one of the problems which bedevil the people in local authorities. There should be strict supervision of allocations of money from the local loans fund for providing infrastructure. If this area were tightened up, I believe the total cost of houses could be reduced substantially. There is no use installing running water, sewerage, electric light, and footpaths over an area and then letting in a crowd of speculators.

I have seen places where there were alleged delays in the provision of housing. Without the kind of supervision we have there would have been colossal mistakes made. This credit is due both to Local Government and to the people who operate the local loans fund. Some mistakes have been made and some of them have had to be corrected expensively. The engineering supervision in the Board of Works and Department of Local Government is the greatest safeguard we have. I have personal knowledge of cases where, were it not for this close supervision, expensive mistakes would have been made.

The increases provided for in this Bill are commendable, provided the economy can stand up to it. We cannot go beyond what the economy can stand. Progress is a good thing, but we have various demands on the amount of capital that can be provided.

Senator McDonald referred to delays and the cost of housing, but he did not refer to the question of the purchase price of land. The purchase price of land is connected with the infrastructural arrangements the local authority make before it is decided to build. If I were to exert any pressures on anybody I would like to see the infrastructure provided in all cases. It is a question of whether the chicken comes before the egg or the egg before the chicken. This is an important matter. The local authorities will have to decide why they want the land, buy it and then provide the infrastructure. If somebody does not want to sell agricultural land at agricultural prices, It should be got somewhere else. Everybody in the country and especially the county councils, will know that there is more money available and they can get on with the job.

Mr. A. O'Brien

I would like to join with the Senators who have welcomed the Bill. I greatly appreciate the fact that the ceiling of the local loans fund has been raised from £400 million to £600 million. I hope that indicates a greater rate of work and a greater rate of development in the various schemes of water and sewerage, housing and so on in the immediate future. That optimism must be tempered. When we take into account not only the increase in the cost of sites but also building materials and the cost of various works undertaken, it is unlikely that the advance in the amount of work actually done over the next couple of years will be significant.

In so far as it contains seeds for some optimism I welcome the Bill. I hope that in the immediate future we will have less delay in the payment of grants for the installation of sewerage and water schemes in the smaller towns. There are a number of small towns throughout the country where water is installed but they have been waiting six or seven years, and in one case nine years, for the installation of a sewerage scheme. I hope that that will get priority treatment in the near future and that they can hope, as a result of this measure, for an improvement in the situation in so far as it affects them.

It is true to say that in a number of our relatively larger towns the sewerage and water schemes installed there some years ago are not only incapable of bearing extensions but they are hardly adequate for the present time. In the not too distant future I foresee that vast sums of money—much greater than the last budget—will be required to make the sewerage and water facilities in some of these towns adequate for present demands.

With regard to extensions, there are many towns whose water installations will not bear an extension. They were not designed to carry any significantly greater supply of water. The position has been further aggravated by the fact that it was possible for people to get supplementary grants for the building of houses outside some urban areas and not get them inside the urban area and there was a great deal of ribbon development in the proximity of some towns. A lack of planning led to a free for all in building on the perimeter of these towns. This will aggravate the problem in the future. Supplementary grants are available now in many towns where they were not previously available up to a few years ago. We can look forward to more building within the perimeter and less on the outskirts of the towns.

I should like to hear from the Parliamentary Secretary in his reply if this measure we are discussing will expedite the development of the regional water schemes. It is a considerable time since some county councils had plans drawn up and the necessary preparatory work done for the installation of a regional water scheme. The progress in some parts of the country has been painfully slow, especially in my own area in County Cavan.

The question of the housing shortage has been referred to. Senator Honan, among other Senators, spent some time in drawing attention to the factors which cause steep increases in the cost of houses. If action was not taken in the past by local authorities who acquire land for development or for the building of houses, it must be taken now. The demand for houses is there. In some cases public authorities are slow in providing adequate housing and people have to pay fantastic rents for flats or houses. It is not unknown in a small provincial town for a married couple to pay £8 to £10 per week rent for a flat.

It is agreed by economists that when a person passes one-eighth of his income in paying for housing accommodation, he will run into trouble by having to deprive his family of other amenities. When young married people have to pay these exorbitant rents they accumulate debts at a time when they should be saving money to meet further commitments which will arise later on. Every local authority must, in so far as is possible and with whatever help can be got from the local loans fund, increase the housing facilities available.

The design of houses built by local authorities has shown a marked improvement. They are not the stereotype job which was turned out in the past. Further imagination could be shown in the design. It is not necessary that row after row on the outskirts of a town should be of the same design. This would add greatly to the appearance of our towns and remove the depressing effect on visitors to the town and on the tenants. To use a modern expression, they must become "browned-off" looking at the same drab complex of buildings day after day. I welcome what has been done in this connection.

The provision of vocational schools was mentioned in the speech made by the Parliamentary Secretary. Without wishing to strike a jarring note, I should like to state that when public money is being spent, the people of the district must not have any well-founded reason for thinking that money is being squandered or that money is being spent on something which is not intended to last. Some years ago in County Cavan, concurrently with a decision being taken to close down Kilnaleck Vocational School, another decision had been taken to build an extra room in this school. The work of building this room was continuing while the decision to close the school had been or was in the process of being taken. This is a well-founded cause for complaint. That might be an isolated incident but people are inclined to think that those who use the public purse are not sparing. Such glaring examples of the lack of liaison between different public departments cause grave dissatisfaction among people about the expenditure of public moneys.

Take another example concerning a national school which was opened in 1966. The late manager of the school and the present manager spent days in the appropriate Department trying to encourage those responsible not to put so much wood into the front wall of the school which is exposed to the south-west wind. They ignored the whole thing. Now, less than five years later, that wood has decayed and big sums of money will have to be spent in the near future to replace that wall built as recently as 1966. Exactly the same type of school was built ten miles away in County Cavan two years later. They did learn a lesson but at a high cost. It generated a certain amount of disrespect in the locality for Government body representatives. It was a pity it happened.

I hope greater care and attention will be given to matters such as this in the future and that it will be apparent to the general public that they are getting good value for the money spent. Great care should be taken in making the decision as to whether or not a building should be constructed. If it is decided to build due attention should be given to the type of materials used. What is suitable in one part of the country might be unsuitable in another area which might be more exposed to the rigours of our climate.

A great deal of exceptionally good work has been done by the local authorities with the assistance of the Department and the local loans fund. I would not deny that. Some of this work has transformed the face of the country. However, it is necessary to draw attention to the fact that now and then there has been a slip-up.

It is true to say that our progress in the provision of hospitals has not been all that could be desired. When the Irish Hospitals Sweepstake was introduced it was hoped that funds would be made available to help to provide the capital necessary for the building of suitable hospital accommodation. Unfortunately, a great deal of the revenue from the Irish Hospitals Sweepstake is being diverted into the administration of the hospitals. That means that the building of hospitals has progressed at a slower rate than we had hoped.

I do not wish, in a debate such as this, to be constantly harping on local issues but I feel justified in making a brief reference to the surgical hospital in Cavan before concluding. Twenty years ago Cavan County Council were given authority to acquire land for the building of a surgical hospital but for one reason or another that hospital has not been built. It was stated in public at the regional health meeting in Kells that the surgical hospital there was a grave fire hazard and a positive danger to the patients and staff. Attention was also drawn at that regional meeting to the fact that theatre accommodation was totally inadequate for the surgeon and his staff. This was given wide publicity in the local and national newspapers. I hope some positive step will be taken to provide another operating theatre at the hospital to enable surgeons to perform operations there. I know people can quote places for the benefit of their own areas but this one in particular, by virtue of all the circumstances, is entitled to top priority. I hope the Parliamentary Secretary, in so far as he has any function in the matter, will ensure that attention is given to this question in the immediate future.

Mr. Flanagan

I am sure the Parliamentary Secretary is delighted. Everyone has welcomed his proposal to increase the range of the local loans fund from £400 million to £600 million. No doubt he did not expect any opposition. This proposal is closely linked with the Minister for Local Government's Department. In common with other Senators who have spoken, I will have more to say on matters of local government than I would on matters which come under the jurisdiction of the Parliamentary Secretary and the Department of Finance.

There are two things which help us in looking to the future and the expenditure of this money: first, the fact that we made mistakes in the past; secondly, the fact that we are in an era of development and we should now be better able to foresee the development of our towns. As an official under a local authority I made some serious mistakes in giving in to a certain extent to the representations made by public representatives. In a town like mine where we have three political parties almost equal in number, if a proposal was made to carry out development in one town, immediately representatives from the next town wanted to get something for themselves. They did not want to let their side down. Houses and cottages were built and subsequently I found only one, or, in some cases, two old people living in them. As against that, in other areas where I, as a responsible official, stressed as vehemently as I could before the local authority the necessity for building houses with different accommodation, some two, three or four-roomed houses, the members of the local authority were adamant that nothing but the best was good enough for their town and they were not going to provide any houses for one or two people. Now we have a pattern of development in the towns and we should be able to look into the future.

I do not agree with anybody here today who criticises the provision of serviced sites in towns where they are necessary. The one point I should like to stress is that every developing town in the country at the moment should look and plan ahead and at all times have developed sites to meet the probable requirement for a period of ten years in advance.

This would avoid ribbon development. Ribbon development is caused by the fact that people are looking for sites beside the public road. Then, when they have a sufficient number of houses built along those roads, they start an agitation for having a water supply laid on. If there were proper planning carried out, the question of sites, roads, water supply extension and the sewerage would be the first consideration. Developed sites will, of course, cost more. By the time the water and sewerage facilities are installed, the cost of these sites to the public authority will have been much more than if they were properly planned and properly developed at the beginning.

I knew a case in a town in my county in which there was a sewerage scheme prepared by a consulting engineer years before I retired. That scheme was held up principally because the outfall was into a tidal estuary into which a salmon river ran and the owner of the salmon fishery felt that possibly his rights would be interfered with by the discharge of effluent into the tidal estuary. It took years to straighten out that point. Eventually the scheme went on and is going on at present. In the meantime, the town has developed somewhat. Houses are built on two or three approach roads and now people are looking for extensions to the sewerage and water facilities. These are two questions which were raised with me last week. The sewerage extension is extremely difficult because along one of the roads pumping will be necessary. Still, it is much better to get it done now while the main contractors are still on the job than to let them go and try to have the scheme carried out by the county council later on.

Planning ahead is the important thing. We see the pattern of development in our towns at the moment, where country people are leaving the country and coming to live in the towns. We can easily assess the rate of increase in population in the town and that should be a sufficient guide to planning for the future.

Regarding local authority housing, again people criticise the cost of a developed site. I have no experience of any house being built many years before my time as a local official that has not appreciated enormously in the meantime. In the town of Castlebar last week a small one-storey house was sold. It was an urban council cottage which I am quite sure the tenant had vested. That cottage was built before 1920 and was built at less than £300. It was sold at a public auction for £2,000. That gives you an idea of the appreciation.

Another thing in this regard is that in every case, even though it might appear money is being lost the cottage should be vested in the tenant as soon as possible, even at what appears to be a low price. Give him the pride of ownership and give him the responsibility of maintenance of the cottage and he will carry out immediate repairs at a lower price much more quickly than will the local authority. Vesting should be done at the earliest possible time. In the end, when the cost of maintenance and repairs is taken into account, it will be found that early vesting is better.

Every new housing scheme should be made flexible. There should be a certain number of small houses suitable for old age pensioners or for small families. There should also be a certain provision for itinerants. The trouble at the present time with regard to housing itinerants is that people living in a cottage scheme feel that the value of their house will be reduced if itinerants are brought into an existing group of cottages. To avoid that, the provision for the few itinerant families should be made in the beginning together with the provision for small families. Then the itinerant and the small family would go in on exactly the same terms and there would not be the complaints we now hear when some of those unfortunate people are brought in.

It is desirable that sites be made available to people who will build their own houses. The cheapest and best houses being built at the present time are being built by a group of people who get together and work co-operatively.

With regard to water supply and sewerage schemes, in connection with any scheme being carried out at the present time, the area for development in the future should also be surveyed, so that from the very beginning of the scheme, although it will not be included in the original scheme, it will form part of the major scheme. Criticism is made of the cost of supervision. I do not think that supervision ever cost anything. The more supervision you have and the closer the supervision, the better the result.

Parliamentary Secretary to the Minister for Finance (Mr. Lemass)

This Bill allows itself some expansion. Some Senators were dealing with matters which were primarily the concern of the Minister for Local Government and in one case the Minister for Health and consequently I would not be competent to reply to several points which were made. I will, however, bring any remarks in relation to these matters to the attention of the appropriate Ministers.

Senator Reynolds and other Senators referred to delays in the issuing of moneys from the local loans fund. I should like to explain the procedure, which should satisfy most Senators in this regard. The procedure, in relation to services financed from the fund is the function of the appropriate Minister, up to the point at which the application for a loan is lodged with the local loans fund. The Minister for Local Government is responsible up to this point for the procedure in relation to housing, water and sewerage schemes and other services administered by his Department.

The consideration of the applications and the approval of loans from the fund are the function of the Minister for Finance. This function is exercised by the Commissioners of Public Works. The procedure in regard to loan approval is comparatively simple: as a result of the elimination of mortgage deeds and other complicated legal requirements which applied prior to the enactment of section 3 of the Local Loans (Amendment) Act, 1961. Once the loan is approved, the money is issued as required to the local authority. The difficulties to which many Senators referred are probably attributable to works being improperly initiated in advance of the loan sanction.

Senators Honan and O'Brien were also concerned about these matters. I welcome Senator Honan's remarks to the effect that these systems safeguard taxpayers' money. In my own experience I am aware of cases where considerable sums of money have been saved as a result of this procedure. It is important when you are dealing with public funds to have proper precautions.

The administration of the fund is not responsible for holding up regional water schemes or the other matters mentioned by the Senators. They are the responsibility of the Minister for Local Government.

Senator Brugha asked for a breakdown of the amounts spent. Issues from the local loans fund, from 1st May, 1935, when it was established, up to 31st March, 1972, were £374.7 million. It is made up as follows:

	£ million
Local Authority Housing	186.5
House Purchase Loans	80.5
Supplementary Housing Grants made by local authorities	21.8
Gaeltacht Housing	0.2
Total for Housing	289.0

	£ million
Sanitary services (Water supply and effluent disposal)	49.2
Vocational schools	16.4
County homes, hospitals, dispensaries	14.3
Other services	5.8

The breakdown of the estimates for 1972-73 are:

Local authority housing	£23,880,000
House purchase loans and supplementary grants	£12,200,000
Sanitary and miscellaneous services	£8,000,000
County homes and hospitals	£3,405,000
Vocational schools	£1,600,000
Harbour developments, etc.	£1,400,000

This shows an increase of roughly £5 million on the amount spent on these services last year.

I agree with Senator Brugha that you can never have too good a communication between the Department and the public. I would regret if there was lack of communication.

Senator McDonald suggested there should be more money given to people to encourage them to buy their houses. This, again, refers to the Minister for Local Government. It is a matter on which the Minister for Local Government made an announcement the other day. He announced further assistance under the house purchase loan scheme for people buying their own houses.

I was also asked by Senator McDonald about the rate of interest paid on loans from the fund. The rate of interest is fixed by the Minister for Finance. He is bound, under section 12 of the Local Loans Fund Act, 1935, to ensure that loans are issued at a rate not less than that at which the fund itself borrows. This is a determining factor on how the rate of interest is fixed. It may be of interest to the House, if I give an example of how the rates have moved:

1st January, 1965	6¼per cent
15th November, 1965	7 per cent
28th November, 1966	7¾per cent
13th June, 1967	7 per cent
1st August, 1968	7¾per cent
18th March, 1969	8½per cent
23rd March, 1971	9½per cent
1st December, 1971	9 per cent

Generally, it can be seen that the cost of money is going up the same as the cost of building.

Senator McDonald also asked me what was the amount of interest paid since the fund was set up. Up to 31st March, 1969, a total of £100,847,470 had been paid by way of interest, while repayments of principal amounted to £51,791,500 on the same date.

Repayments of loans to the fund, since its inception to 31st March last, totalled £62.8 million. Repayments at present amount to approximately £5 million a year. The period for which loans can be made available varies for different activities, the longest being local authority housing.

Senator McDonald also mentioned the question of the environment. I agree with everything he said. He is aware, I am sure, of my interest in environmental problems. At the present time there is an interdepartmental committee which will report to the Minister for Local Government in the very near future on the problems of water pollution and on what steps can be taken to solve them. This matter will be coming up again very shortly.

Senator Keegan suggested more advanced planning. I agree that this would be desirable but I would point out that this would be a matter for the Minister for Local Government primarily.

In reply to Senator William O'Brien, matters relating to loans on individual houses are for the Minister for Local Government and are not affected by this Bill except, in so far, as this Bill makes moneys available to the local authorities by dispensing the moneys.

One of the figures the Senator gave was not exactly correct. In the Minister for Local Government's announcement the other day the loan limit for Dublin city and county, Dún Laoghaire and the county boroughs of Galway, Cork, Limerick and Waterford has been increased to £3,800 from £3,300. In all other areas the limit has been increased from £3,000 to £3,400. The present existing income limit is £1,500 or £60 valuation for farmers and the new limit will be £1,800 or £60 for farmers.

I think Senator O'Brien was mostly concerned with supplementary housing grants. At present the income limit for eligibility for a grant is £1,250 increasing by £100 for each dependant up to four. That brought the limit up to £1,650. The new limits are from £1,500 to £1,900. A man with a maximum of four dependants will get a supplementary grant if he has an income of less than £1,900.

Senator Honan dealt at length with the non-availability of land at a reasonable price. The Minister for Local Government will shortly get a report of a committee, chaired by Mr. Justice Kenny, on building land prices. This report will presumably come before the Seanad in due course.

Sanitary services and regional water schemes would be matter for the Minister for Local Government. I have covered most of the matters that would directly affect the Bill before the House. If Senators have any other questions to raise I shall be glad if they will get in touch with me.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.