Seanad Éireann díospóireacht -
Thursday, 27 Nov 2003

Vol. 174 No. 19

Adjournment Matters. - Rural Renewal Scheme.

Mr. Wilson

I thank the Minister of State, Deputy Parlon, for attending the House to respond to the need to extend the rural renewal scheme beyond December 2004.

The rural renewal scheme was introduced in the upper Shannon area covering areas in counties Cavan, Sligo, Roscommon and all of counties Leitrim and Longford principally because these areas had suffered particular social and economic problems in the preceding decades.

We must first acknowledge the foresight of the Minister in introducing and developing this scheme with the intention of redressing the imbalance arising from the social and economic deficits to which I referred. We must also acknowledge the considerable progress that has been made in redressing this imbalance over the past three years in particular.

Despite the best efforts of all organisations involved, the job is only half done, and we should not discontinue a scheme with a proven track record and with the potential to fill the majority of remaining deficits in the areas which it covers.

I appreciate that the scheme has already run for a considerable period and that most parties interested in availing of its benefits should have done so already. However, there have been particular problems which have mitigated against all of the potential being achieved to date. These include a simple lack of awareness among those in the most disadvantaged areas as to the benefits of the scheme and how these benefits could be channelled to their assistance. There is greater awareness now as a result of the efforts of county councils and other agencies. The continuation of the scheme for a further period would permit these latecomers to avail of the scheme's benefits.

It is an objective of the national spatial strategy to achieve more balanced regional and inter-regional development. In many cases, the tools to achieve this are being developed or are yet to be developed. The rural renewal scheme is a tool already developed, with a track record of achievement and an ability to deliver significantly more in the future. We must recognise its success, accept its potential and use it in the achievement of a key objective of the national spatial strategy.

Many families and business people have paced their proposals on the assumption of a reasonably smooth transition in the application of the processes necessary for plan approval. Unfortunately, the time that passed when difficulties arose or planning appeals were lodged means they cannot meet the timeframes of the existing scheme deadlines. This legitimate problem should warrant an extension of the scheme.

The significant amount of Government funding made available to various local authorities in the rural renewal scheme areas in the past five years in particular has enabled the provision of new infrastructure capacity for development that would not have been approved a short time ago. Having regard to the principles of sustainability, best use of resources and infrastructure and the consequential potential to fill a deficit in community development, this infrastructure should be used for the extension of the rural renewal scheme.

A number of local authorities in the relevant areas have recently reviewed or renewed their development plans. These reviewed plans make necessary provision to control areas of complaint that have arisen and were in my opinion unfairly attributed to the rural renewal scheme. I said earlier that the renewed and reviewed development plans have dealt adequately with this problem.

Most of the areas to which this scheme applies have suffered severe population drain over the last 70 to 80 years. Statistics recently produced under the CLÁR programme point to many of the areas in the rural renewal scheme having lost up to 55% of their population from 1926 to 2002. To say that the scheme is promoting unsustainable patterns of rural development is unsupportable. If we look at sustainability in its most understandable form, we should look at the use being made of existing infrastructure such as schools, churches, shops, post offices, community halls, health services and so on, and ensure that there are sufficient people living in any community and making full, cost-effective use of services already there and paid for by the taxpayer. To take this on to the sporting field, many parishes in the rural renewal scheme areas would not be able to muster sufficient bodies to field a football team. We know that in certain areas of County Cavan.

I know that my Fianna Fáil Oireachtas colleagues in counties Cavan, Leitrim, Longford, Sligo and Roscommon support the extension of the scheme, and many Fianna Fáil councillors have consistently highlighted its value and asked me to urge the Minister for Finance, Deputy McCreevy, the Minister of State and the Government to grant this time extension which will be warmly welcomed in these areas.

Let us not stop when the job is half done. I urge the Minister of State to extend the rural renewal scheme beyond December 2004.

Minister of State at the Department of Finance (Mr. Parlon)

I welcome this opportunity, on behalf of the Minister for Finance, to speak about the rural renewal scheme in the Seanad this evening.

Prior to introducing the scheme in the budget for 1998, the Minister for Finance had been aware for quite a considerable time of the problems of the upper Shannon area and that the area was not sharing in the economic success enjoyed by much of the country at that time. The 1996 census showed that the populations of both counties Longford and Leitrim had declined while every other county in the State had shown moderate or significant increases.

While it may seem surprising to suggest this, the same problems have also been experienced by particular areas of our larger towns and cities. Although many of them appeared to be growing rapidly and becoming increasingly prosperous, most of the growth was confined to the suburbs with the inner city areas suffering from population declines and increasing dereliction.

Since the mid-1980s a succession of urban renewal schemes had succeeded in rejuvenating many inner city areas, and for the first time in decades many of these areas have had population increases. The Minister decided that the concept of tax incentives for the rejuvenation of urban areas could be applied to the upper Shannon area on a pilot and targeted basis. He introduced the scheme in the 1998 Finance Act having announced it in the budget for 1998 on 3 December 1997. His objectives for this scheme were to encourage people to remain in the area, to move into the area and to stimulate economic activity there.

Centred on counties Leitrim and Longford, but also including parts of counties Sligo, Cavan and Roscommon, the scheme offers specific tax incentives for both residential development as well as expenditure on commercial and industrial projects. The incentives for commercial and industrial projects were considered and approved by the European Commission in line with State aid rules as is the normal procedure for such incentives.

The rural renewal scheme is clearly an attractive area-based tax relief scheme. All parts of the qualifying areas are eligible for the full range of reliefs available under the scheme. By comparison, only certain sub-areas within the towns and villages designated under both the urban and town renewal schemes qualify for relief, and in most cases each qualifying sub-area or site is restricted to a limited range of reliefs.

The entire designated rural renewal scheme area also qualifies for rented residential or section 23 type relief, whereas only a limited number of areas or sites have been designated for this relief under both the urban and town renewal schemes. The size of qualifying residential properties under the scheme, in the case of both owner occupier and rented accommodation dwellings, is also greater than under most of the other tax incentive schemes. The Minister was careful to provide a full range of reliefs in order to promote a dynamic residential and commercial mix arising from the availability of the incentives under the scheme. It is not surprising, therefore, that the uptake of the rural renewal scheme has been strong to date, although development has been concentrated in some areas more than others. Overall, planning applications have increased considerably and the number of new homes being built in the rural renewal area has increased substantially compared to the situation prior to the introduction of the scheme.

In addition, new industry has been attracted to the area. This provides much needed alternative employment opportunities in areas where agriculture would have been the main source of employment. The evidence exists to indicate that the scheme has been successful in significantly increasing economic activity in the designated areas. The building industry locally has benefited from increased construction activity, while the knock-on effects for small businesses and traders are also important. Local authorities, community enterprise boards and other local interests have all played their part in promoting the scheme.

The scheme has underpinned the regeneration of many of the small towns and villages in the designated area, providing a revitalised and sustainable fabric of rural life in areas that might have lost out had it not been for the vision and foresight of the Minister. The latest figures from the CSO from the census in 2002 indicate that the trend of population decline suffered by County Longford and County Leitrim has been reversed for the first time since the Famine. The scheme has been a success and is due to end at the end of 2004. Those thinking of availing of it should be aware of that point. There are no plans to extend the scheme to other areas. Part of its success is in designating only one area and sticking to that decision.