Select Sub-Committee on the Environment, Community and Local Government díospóireacht -
Tuesday, 21 Jan 2014

Vote 25 - Department of the Environment, Community and Local Government (Revised)

Chairman

I remind people that mobile telephone signals interfere with the broadcast system and affect coverage. This meeting has been convened to allow the Select Sub-Committee on the Environment, Community and Local Government to consider the Revised Estimates for the Department of the Environment, Community and Local Government - Vote 25. The Department's brief on the 2014 Revised Estimates, along with a list of suggested questions complied by the committee secretariat have been circulated to members. I hope all members have studied the documentation because it provides useful information in the context of our deliberation on the Estimates.

I welcome the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, the Minister of State at the Department of the Environment, Community and Local Government with responsibility for housing and planning, Deputy Jan O'Sullivan, and the Minister of State at the Department of the Environment, Community and Local Government with responsibility for the NewEra project, Deputy Fergus O'Dowd. I also welcome the following officials: Ms Geraldine Tallon, Secretary General of the Department of the Environment, Community and Local Government; Ms Maria Graham, assistant secretary, water and planning; Mr. Michael Layde, assistant secretary, housing; Mr. Colm Lavery, principal officer, local government finance, Mr. Cormac Clancy, principal office, community; Mr. Maurice Coughlan, principal officer, Department of Finance accounts; and Mr. Brendan Mahon, assistant principal, Department of Finance accounts. I invite the Minister to make his opening statement.

Minister for the Environment, Community and Local Government (Deputy Phil Hogan)

I welcome the opportunity to discuss with the sub-committee my Department’s Revised Estimate for 2014. I am accompanied by the Ministers of State, Deputy Jan O’Sullivan and Deputy Fergus O’Dowd. To assist members, we have prepared briefing material on the Department’s Vote for 2014, which sets out details on the overall Vote, as well as key financial and performance information about each strategic programme.

The key objective for Government in framing budget 2014 has been to do what is required to support our exit from the EU-IMF programme; this has now been achieved. Getting to this position has, of course, presented major challenges, including the need to maintain tight controls on public spending generally. Despite these constraints, considerable resources are being made available to my Department for 2014 and these will be used to make the maximum contribution to job creation and economic recovery and help the less well-off in our society. In these and other ways, we will work to the greatest extent possible to improve public well-being and support delivery of better services for our citizens. The budget of €817 million being provided to the Department for 2014 is firm evidence of the Government’s commitment to the sector. The provision is made up of €456 million in current spending and €361 million in capital investment. It includes an additional €50 million made available to the Department on budget day for investment in infrastructure stimulus measures in the housing and related areas. There will also be a further €72 million of carryover capital funding for use on the LEADER, rural development and housing programmes in 2014. In addition, there will be €240 million in Exchequer equity investment in the newly-established Irish Water to fund the water and waste water capital programme this year. Departmental programmes will also benefit in 2014 from resources available from both the local government and environment funds.

I will turn now to specific areas. As the committee is aware, 2014 will see major reform in the local government sector. The action programme for effective local government sets out a wide-ranging reform agenda across local government to address weaknesses, enhance effectiveness and accountability and improve performance across the entire system. Key features of the programme to come into effect following this summer’s local elections include the restructuring of local government at regional, county and sub-county levels and the strengthening and widening of the scope and role of local government. This represents the most far-reaching changes since the present system of local government began in the 1890s. As members will be aware, local authority financing will change radically in 2014. Irish Water assumed responsibility for the delivery and funding of water services from 1 January, the local property tax will operate on a full year basis, with an amount equivalent to the money collected in 2014 transferring into the local government fund, and 2013 will be the final year of operation of the non-principal private residence charge.

The establishment of Irish Water and its financial relationship with the local government sector will have a considerable impact on local authority financing. Irish Water will fund local authorities to deliver water services through service level agreements. In this regard, Irish Water will cover some €730 million in operational costs of providing water services in 2014, which formerly were funded by local authorities. Last month I announced general purpose grants to local authorities of €281 million for 2014. When taken with the water costs of some €730 million that are transferring from the local government sector to Irish Water in 2014, this represents a funding boost of some €100 million or 11% to the sector when compared to the corresponding funding and costs for 2013. This reaffirms the strong central government support for a reformed local government sector and the essential services which local authorities deliver to our people. I acknowledge again the efforts being made by local government to reduce demands on the commercial sector. It is vital that progress in this area is maintained, and indeed built upon, given the importance of local enterprises to employment and to the economy generally.

Of course, there is no room for complacency; efficiencies are needed now more than ever. The sector continues to make significant and welcome progress in implementing the efficiency changes recommended in the original local government efficiency review group report. For example, the sector has reported total efficiency savings of nearly €230 million in 2010-12, primarily in staffing reductions and procurement. However, it is vital that the rate of implementation of the efficiency agenda is accelerated by the sector to ensure that the overall targeted efficiency savings of €346 million, as set out in the report of the local government efficiency review group, are achieved in a timely manner.

The transfer of water services responsibilities from local authorities to Irish Water took place on 1 January and was a landmark event in the delivery of water services in Ireland. This major reform programme will drive improvements in water services and provide security of water supply for the public and economy in the coming years ahead. Security of supply will only exist if we increase investment in infrastructure and create a sustainable funding model for water services. These will happen as part of the reform process. In turn, security of supply will position Ireland's economy well to attract water-intensive industries such as ICT, pharma-chem and agri-food in the years ahead. With these reforms, we are also directly creating jobs, through the domestic metering programme and the establishment of Irish Water's customer contact call centre.

Some €240 million in equity-based funding will be invested in Irish Water this year. This will fund progress on projects set out in the Irish Water capital investment plan, including over 100 projects in progress under the water services investment programme at the end of 2013. The capital funding being provided to Irish Water in 2014 ensures that it is in a position to take on responsibility for delivery of water services capital infrastructure. In addition, some €486 million from the Local Government Fund will subvent the service level agreements between Irish Water and local authorities in respect of operation and maintenance of water and wastewater services. A particular focus will be placed during 2014 on all aspects of water conservation to ensure that we manage our water resources in a sustainable manner and customers are informed on ways in which they will be able to manage their water usage when meters are in place.

This year will also see continuation of the Department's rural water programme. Funding of almost €28 million is being provided under this programme and will include funding for the group water sector and septic tank grant assistance.

The environment and waste management programme provides for expenditure of €35 million, largely to meet the cost of the important work of the Environmental Protection Agency, EPA, and the Radiological Protection Institute of Ireland, RPII; work is now well-advanced towards the merging of these agencies in the course of this year. The Environment Fund, financed from the landfill and plastic bag levies, will provide a further estimated €48 million to be directed to key priority areas such as environmental enforcement, waste prevention and recycling.

On the community and rural development side, I have been particularly conscious of the need to support funding levels for the local and community development programme. Given the current economic crisis and the high level of unemployment, the programme is now more relevant than ever as it supports employment and gives those most distant from the labour market the skills to access training and jobs. The programme provides employment, training, personal capacity building and other supports for the harder to reach in the most disadvantaged areas in society.

Almost €48 million will be invested in 2014 to increase access to formal and informal educational activities and resources, and to increase people's work readiness and employment prospects. Some 14,000 people who are distanced from the labour market will receive direct one-to-one labour market training and supports through this programme in 2014. While the current programme was due to finish at the end of 2013, it is now extending into 2014 on a transitional basis, with the successor programme being launched in January 2015 under the new local community development committees, which will enhance the role of local government in local and community development matters.

The Leader elements of the rural development programme will receive substantial funding of some €50 million this year and, as in 2013, will support nearly 2000 enterprises to improve quality of life and promote growth and diversification of the rural economy. Leader is addressing many of the challenges facing rural communities, including through increasing economic activity and generating employment. It is a key multi-annual programme which will continue to be supported to deliver on its commitments to enhance the social and economic fabric of rural communities.

I have kept my remarks as brief as possible so that we can have a full discussion on the activities of the Department and how our programmes, and the significant resources we will deploy in support of them in 2014, will benefit communities and citizen throughout the country. I look forward to hearing your thoughts and contributions. The Minister of State, Deputies Jan O'Sullivan, will complement what I have said in regard to her areas of responsibility and we can then deal with matters of detail that members wish to raise.

Minister of State at the Department of the Environment, Community and Local Government (Deputy Jan O'Sullivan)

I, too, thank the committee for providing this opportunity to discuss the Estimates, in my case for the 2014 housing programme.

I am pleased that 2014 will see a significant level of new investment in housing across a range of measures which will increase the supply of homes to be made available and enhance quality of life for families. In 2014, almost 70% of the budget for the Department will go directly to supporting housing - this will result in an investment of over €0.5 billion across a range of programmes.

A €50 million stimulus package was announced for the housing sector on budget day. Some €30 million of this funding is being made available for investment in local authority housing. This will allow for a new social housing construction programme to be developed over the period to end 2015 and for a retrofitting programme to return vacant houses to productive use as soon as possible. I expect that this investment will deliver up to 500 new homes for households. The detailed arrangements for the implementation of these measures are being compiled by my Department and I expect to be in a position to announce details shortly.

Considerable work has been undertaken in tackling the issues around unfinished estates. The next step now involves resolving the residual cohort of estates which remain in a problematic condition. Therefore, in 2014, €10 million is being provided for a site resolution fund to resolve public infrastructure issues on the most problematic unfinished estates which cannot be resolved by other means. My Department has recently invited local authorities to submit proposals for funding under the site resolution fund which will enable collaborative solutions to be found for unresolved developments.

In continuing to support the objective of the Government's housing policy statement of meeting the needs of people who are unable to provide for accommodation from their own resources, I expect that approximately 5,000 new social housing units will be provided in 2014. These units will be delivered through a range of mechanisms, including through continued investment in leasing and RAS, the completion of existing capital programmes and mortgage-to-rent arrangements, and the continued transfer of NAMA units.

Reflecting the ongoing importance of leasing as a primary delivery mechanism for social housing, increased funding of €40 million is being made available and some 1,200 new leasing units will be delivered in 2014. This provision also provides for increased output under the mortgage-to-rent scheme which is a crucial element in tackling the mortgage arrears crisis and 350 new transactions will be delivered in 2014.

To support the most vulnerable in society, funding is being provided for the development of 175 new housing units for those with special housing needs. Furthermore, up to 150 persons with disabilities will be provided with new homes in the community under the Government's de-institutionalisation programme.

To support Government strategies on the needs of older persons and persons with disabilities, some 7,800 adaptation grants will be available to assist people to remain at home for longer and prevent premature entry to residential care. As the committee will be aware, adjustments to the administrative structures for the grant schemes for new applicants became effective from the start of this month following a review of the schemes. The aim of the review was to give priority to finding ways to spread the benefits as widely as possible, to target those most in need, and to ensure that the grants supported the maximum numbers of households. With the level of funding now available and the revised administrative arrangements, the most vulnerable will be better placed to benefit from the grant schemes.

This year will also see a continuing focus on a programme of regeneration and remedial works projects, with a provision of €79 million being made available. These projects target the country's most disadvantaged communities through a programme of physical, social and economic regeneration. Priorities for 2014 include a new focus on construction and refurbishment in Limerick regeneration, the final phase of construction and refurbishment in Tralee and Ballymun, and refurbishment, demolition and construction works in Dolphin House and St. Teresa's Gardens.

In order to ensure continued progress towards the achievement of the 2016 target of ending long-term homelessness, the homeless budget is being maintained at €45 million in 2014. As the committee will be aware, the first report of the homelessness oversight group was published last December. That group was established to examine the approaches being pursued in the homelessness policy statement and to review progress, identify obstacles and propose solutions. I am currently considering the group's report and its recommendations and will consult with colleagues in Government on the implementation of these recommendations, as appropriate.

Additional innovative measures in 2014 will see €25 million being made available for the energy efficiency stimulus measure which will improve the energy efficiency of some 12,500 local authority houses, resulting in warmer homes and lower energy bills for thousands of families. This initiative will also create approximately 1,000 jobs in the construction sector over the period 2013–2015.

The social housing reform programme will also continue during 2014 with the commencing of the testing phase of the new housing assistance payment.

This will begin in Limerick, the lead local authority for the project, and quickly extend to the six other local authority areas forming the first wave and thereafter to all areas. I also hope to see the necessary supporting legislation, which is now being drafted, enacted before the summer. I hope to bring the heads of that Bill to the committee as soon as possible.

The most recent data on the number of households qualifying for housing support underpin the need for flexible and diverse approaches to be taken to increase the level of social housing supply. There is no single solution to this and my priority is to use all avenues available to me to respond to this housing need. In 2014, I am determined that the social housing programme will continue to optimise the delivery of good-quality social housing and the return for the resources invested. I would welcome the views of the members of the committee on the issues and challenges outlined.

Chairman

I thank the Minister of State.

Deputy Barry Cowen

I thank both Ministers for their contributions so far today. I welcome the opportunity to discuss this issue. It is no secret that we need to ask many questions about the transfer of duties from the local authorities to Irish Water. If it were not for events of the past few weeks, much information may well have been absent here today. However, there are a few items that need to be clarified before we proceed even to this year's programme. I am conscious of a comment made by the Minister, Deputy Hogan, last week that this committee would have discussed the costs associated with the setting up of Irish Water in November 2012, further to his having received approval from the Cabinet of €180 million for set-up costs. As the €180 million to which he referred was raised as a commercial loan from the National Pensions Reserve Fund, can he confirm that there is no way it was discussed at this committee in 2012 with regard to the spend in 2013? Furthermore, can he confirm what the Minister of State, Deputy O'Dowd, said in the Dáil on Wednesday when he stated this point and, more to the point, said that any parliamentary questions from Members of the Dáil on behalf of taxpayers relating to that spend and how it is being carried out would not be answered because that information was judged to commercially sensitive? That was in contradiction to what the Taoiseach has said earlier about how Irish Water is a public utility in public ownership and that all questions asked in the form of parliamentary questions would be answered. If that is the case, is it the position that neither I nor anybody else is entitled to ask questions about information relating to costs associated with consultants such as IBM, Accenture or Ernst & Young, to name a few, and that in receiving answers to those questions we are at the mercy of Irish Water, which is not yet subject to freedom of information legislation or the oversight of the Comptroller and Auditor General, and is only obliged by virtue of the legislation that was guillotined before Christmas to come before this committee once a year, when we are at its behest as to when it specifically wishes to answer questions? I inform the committee that the Secretary General of the Department thankfully contacted me last night to apologise on her Department's behalf for not answering questions from me and others in the past pertaining to this matter. I accept that apology and her commitment to discuss with Irish Water a mechanism by which information may flow - I emphasise the words "may flow" - in the future. I await the Minister's comments in that regard.

As I mentioned in the debate on a motion we had before House last week, I asked the Minister on 13 November 2012 about the specific costs associated with the setting up of Irish Water. I asked how much he had committed towards Irish Water for next year - that would have been for 2013. While the Minister has argued that it was in the context of water metering, which is fine, he came back and said a provision of €10 million had been provided for the establishment of the structure of Irish Water in 2013. He said that legislation to set up Irish Water on an interim basis would be introduced pending full implementation in 2013. We have since had that legislation. He said the cost of metering would be paid out of a loan from the National Pensions Reserve Fund - we were always aware of that, so there was nothing new there - and that it would not be included in the Department's Estimates, as metering would be rolled out over a number of years, but he never mentioned the specific set-up costs. In his response to my statement last week he said that he provided a breakdown of the €10 million, part of which was €2.7 million towards administration and set-up costs. A good deal of explanation is required to clear up what the Minister has said. I left Dublin last Tuesday night wondering what the situation was, having been told it was my responsibility for not having raised this issue in the normal fashion, the Minister having gained approval from the Cabinet prior to that, but we now know that he did not gain approval from the Cabinet in the normal fashion. It was the economic council that designed the funding in such a way that it would be a loan, and that only copperfastens the accusations that have been made in regard to the overall secrecy that has surrounded this whole debacle since then. That is my point regarding what has happened so far following the chief executive officer's admission on the national airwaves about the costs associated with Irish Water, the consultancy fees of €50 million that had been spent up to then, and the €85 million being provided in the overall scheme of things.

To return to the Minister's presentation today, he said that €240 million would be provided from the Exchequer towards Irish Water. Is that in respect of new capital projects or ones carrying over from last year? How much in total was spent last year by local authorities on capital projects relating to water programmes? How much is proposed to be spent this year either in respect of projects carrying over from last year for which approval has been given by the Exchequer, or in respect of commitments that may have been given to the Minister on foot of representations from local authorities for this year coming?

The Minister said that Irish Water would cover €730 million of the operational costs next year. What is the source of the €730 million? I expect part of it is derived from the collection of commercial water rates, to the tune of €200 million, but from where does the balance come? Perhaps it is quite obvious, but it is not very obvious to me when I read what is before us today. The Minister said that €486 million from the Local Government Fund was also being given to Irish water. The amount of €730 million is in addition to the €486 million that the Minister, according to his statement here, is providing towards operational costs. That indicates that there is an operational cost of €1.216 billion in total next year. I think the amount was substantially less last year because the €1.2 billion that we have all been quoting with respect to the operational costs in a given year is inclusive of capital spending in that area also.

Where is the €400 million that was taken from local property tax revenues that had initially been committed to local authorities that have found they are not able to strike budgets, that find it very difficult to provide the services and facilities they had intended to provide and that had considered this funding a windfall? The Minister took that from them at the back end of last year. Where is it to be spent now? Is that not also gone to Irish Water?

The Minster said there would be an emphasis on water conservation. How specifically will that manifest itself? Will it be by the local authorities or by Irish water?

Deputy Phil Hogan

In relation to what? Can the Deputy repeat that question?

Deputy Barry Cowen

It is in relation to the emphasis the Minister mentioned his Department would place on water conservation and, specifically, how would that manifest itself. Would it be by local authorities or by Irish Water? The Minister specifically said how much would be spent when he said there would be an emphasis on it. Can he assure us that the associated funds will be spent on what it says on the tin?

Can the Minister confirm that if a household, for example, conserves water such that it uses less than the flat rate set by the regulator, there will not be any additional charge associated with its efforts at conservation?

In regard to the €28 million that the Minister said was provided for group water schemes and septic tanks - I presume that is for a rectification scheme - can he give a specific breakdown of the amount? Is he providing any money for local government training towards the testing that is required on the data collected from the registration of septic tanks in the past few years? I do not believe one grant was made by any local authority to any individual in this State who had registered his or her septic tank knowing that it needed rectification works. The reason for this is that local authorities have not been carrying out the testing.

If I know my septic tank needs rectification because it contravenes the existing law, I cannot apply for the grant despite the great fanfare of the Minister in announcing the grants. The tank must fail a test carried out by the local authority before I can apply for the grant, but they are not carrying out any tests. No grants are being offered. Is the €28 million going to address the issue that was to be addressed some time ago? Is the Minister running the risk that the EU may enforce the fines the Minister was so fond of talking about in the past?

With regard to Irish Water, it is now January 2014; what has been spent specifically by the State since last January? What has been raised, even if it is from the National Pensions Reserve Fund and not directly from Exchequer funds? On 13 November 2012, the Minister said €10 million had been spent on operational costs and administration charges associated with the setting up of Irish Water. Has that money been spent?

We knew nothing about the €180 million in November 2012 but we know about it now following a radio interview last Thursday week. The money was committed. Some €1.2 billion was spent last year in operational costs of local authorities throughout the country. Some €500 million was provided in a loan to Irish Water from the National Pensions Reserve Fund for water metering. Has that been spent? Have the targets been met? Before Christmas, I was led to believe that only 20% of metering targets had been achieved. Have issues arisen over the course of the metering that present bigger challenges and problems relating to its financing into the future? Can the Minister confirm that the figure he provided in the form of a loan from the National Pensions Reserve Fund will not be breached? Will there be any savings compared to the Estimate and the loan in the first instance?

Some €486 million has been taken from the local property tax revenues and given to Irish Water. Today, the Minister tells us €240 million has been given by the Exchequer towards the capital cost of Irish Water and that operational costs of €730 million have been provided by the Exchequer. That amounts to €3.3 billion in a year. If I am being outlandish or adding things twice, the Minister can correct me. God knows, enough information has been hidden from us since the process began. If this meeting takes a few hours more, I want to walk out knowing, on behalf of those I represent and taxpayers, what has been committed and what has been spent, and then we can begin to make a judgment on the value of what has been committed and spent.

This takes place against a background in which there has been no audit of the national network. We do not know. The figures being bandied about and used loosely need to be confirmed quickly. We need a roadmap with the cost associated with rectification and reinstatement. This applies to the national network and to the dreadful problems we have in Dublin, with a view to committing the funds required and working under the critical infrastructure legislation to allow Irish Water, or whoever is charged with responsibility, to fast-track the solution. In the absence of that information to allow people to judge it and understand what is involved, they cannot see that we will have a water system fit for purpose five years down the line. If they can see that, they may be committed to paying accordingly.

My party is not against the concept of water charges, although we disagree totally with the method and the avenue the Minister went down in setting up Irish Water. Fianna Fáil would have retained the expertise on the river basin management regionalised structure that exists in local authorities. We can talk all day long about what we would have done and would not have done but the Minister is now accountable, having sought a mandate to govern and having acted accordingly. Perhaps he did not act in the best interests of the public but he must regain the trust of the public in order to allow this project to proceed properly. I would appreciate it if the Minister had answers to my many questions.

Deputy Phil Hogan

Managing our water resource effectively is a key economic issue that we must face. We have 18,000 people on public water supplies that have a boil water notice or other restrictions. The EPA has determined that remedial action is required on supplies that are at risk, which include large supplies in Dublin and Cork, affecting a million people. We have significant supply constraints in Dublin. Where we normally have a cushion of 15% on supply, we now have 3% or 4%. There is water unaccounted for, meaning there are leaking water pipes costing a lot of money. Some €1.2 billion comes from the taxpayer and 40.8% of the water is leaking. Thirty-six percent of our wastewater treatment plants did not meet our effluent standards in 2011 and European Commission has launched a pilot infringement in respect of 80 of those plants. That is the legacy I inherited. I was faced with the challenge of deciding which programmes we would cut further in the context of a troika programme in order to deal with these serious issues. We had to provide good-quality water to meet water quality directives in 2016 and 2021, and this required a capital investment of €600 million per annum, which is almost triple what we spent this year and last year. We have €500 million of investment projects on hold because we did not have the money. We have no hope of meeting those objectives without having some new initiative to deal with it.

We set up a study that did not cost a whole lot of money. We studied the situation internationally to see what we could do. The best way to roll out additional capital investment was to set up a semi-state commercial body and link it not to a greenfield site but to an existing State body to save money. Bord Gáis and Bord na Móna were the existing State companies that bid for it. We made savings because we used existing systems and expertise up to now. And I would ask Deputy Barry Cowen-----

Deputy Barry Cowen

It is my job to ask questions and the Minister's job to answer them.

Deputy Phil Hogan

I am answering them. I challenge Deputy Barry Cowen to tell me what he would do in order to deal with this legacy issue. The Deputy should tell me what he would reduce further in the areas of housing, education or health in the context of the restrictions on our finances over the past few years and in light of the issues outlined about how we will deal with these problems for the people of Ireland. That is the vision and the challenge we must try to achieve.

In November 2012, Deputy Barry Cowen asked questions about my Estimate, which we are discussing now, and that is what I answered.

Deputy Barry Cowen

The Minister gave a different answer last week. It suited the Minister to give a different answer last week.

Chairman

The Minister to speak without interruption.

Deputy Phil Hogan

Deputy Barry Cowen can be political if he wants, but these are the challenges we are trying to meet. I have answered questions about the Voted Estimates before the House. I have hidden nothing. A mistake was made in respect of the parliamentary questions. The commercial sensitivity of any State company will also be taken into account but it does not mean we cannot put out the maximum amount of information. That will happen in the future. I have already ordered Irish Water and the Department to come up with a system to ensure the maximum information is given to Deputies and Senators.

Deputy Barry Cowen

With regard to the €180 million raised from the National Pensions Reserve Fund, the Minister is contradicting what the Minister of State said last week.

Chairman

I gave Deputy Barry Cowen nearly 20 minutes for questions. He should allow the Minister to reply.

Deputy Phil Hogan

I have listened to many submissions from Deputy Barry Cowen that we are getting rid of local authorities and their expertise and knowledge.

Why were we doing that? Deputy Cowen made representations to have public representatives on the board of Irish Water, but when I did that, there was a problem. When I appointed the president of the Association of County and City Councils, its democratic input, the Deputy had a problem with that.

Deputy Barry Cowen

I never said anything about that.

Deputy Phil Hogan

The Deputy did.

Deputy Barry Cowen

I did not. Show me the quote.

Deputy Phil Hogan

In last year's Voted expenditure, €5.7 million was set aside to set up a programme management office for this challenging project. Instead of 34 local authority offices handling water services separately, we will have just one office. It was a useful initiative. We have retained the expertise of local authorities alongside the expertise of Bord Gáis in building systems and customer capability. Committee members received details of the essential software and hardware last week. The people involved are not consultants. Rather, they are external service providers and 90% of the money spent will be an asset on the company's balance sheet. How could the ESB, EirGrid or Bord Gáis have been set up without actually spending money on putting systems in place? It will not be a ramshackle company, but the most modern water company possible. We are borrowing money to do this. Depending on the term of the loan, that money will be on the balance sheet for ten, 15 or 20 years.

I will provide the full details of last year's expenditure on the establishment. Some €15.76 million was spent, with €760,000 towards the regulator to cover its new work, €570,000 on phase two of the pilot metering project, €5.7 million on the water services transition office and €179,000 to PricewaterhouseCoopers, PWC, for the original independent report on the structure of the water utility that was to be established.

Deputy Barry Cowen

I gathered that the report had recommended a different model.

Deputy Phil Hogan

It recommended an independent utility starting from scratch, but the Government did not agree. The project management office cost €628,000. This related to project management costs incurred by Bord Gáis Éireann on behalf of the Department. Some €55,726 was spent on the ESRI's research on affordability issues and the impact of water charges. The water metering programme cost €7 million. This covered the costs incurred by local authorities in terms of road opening protocols, CORE systems, ESRI software systems and mapping. The Department needed €328,000 worth of engineering support with the water services investment programme. The Department also required additional staff last year, amounting to a cost of €321,000. Advertising for water metering subcontractors, including in Public Sector Times, cost €31,000. Mazars did €27,000 worth of work for the recoupment of costs incurred by ICTU under service level agreements. Overall, the Department's spend has been €15.76 million.

Deputy Barry Cowen

The Department's.

Deputy Phil Hogan

Yes.

Deputy Barry Cowen

Not to mention the €180 million that it gave to Irish Water.

Deputy Phil Hogan

That was a loan.

Deputy Barry Cowen

To establish it.

Deputy Phil Hogan

Yes. It is €87 million less than what it would be were we to-----

Deputy Barry Cowen

It includes €85 million in payments to outside experts.

Deputy Phil Hogan

Yes, they are. What would the Deputy call them?

Deputy Barry Cowen

I call them consultants.

Deputy Phil Hogan

They are not consultants.

Deputy Barry Cowen

These are consultancy charges and fees.

Deputy Phil Hogan

We know what consultants were up to in the Deputy's time. Some €241 million was spent last year on water contracts. There is a carry-over.

Deputy Barry Cowen

Some €241 million on what?

Deputy Phil Hogan

On the major water and sewerage schemes in 2013. As that was an underspend, we have a carry-over.

Deputy Barry Cowen

Then it is not new money towards capital investment this year.

Deputy Phil Hogan

It is a continuation of the existing schemes. Irish Water-----

Deputy Barry Cowen

It was committed last year.

Deputy Phil Hogan

No. We have €240 million-----

Deputy Barry Cowen

Was €400 million committed last year, the Department spent €200 million and it is giving €200 million now?

Deputy Phil Hogan

No, €270 million was committed last year. We had an underspend of approximately €45 million on water and sewerage schemes because county managers were sometimes slow in proposing projects and ran into difficulties.

Deputy Barry Cowen

Does the Minister see the committee's difficulty?

Deputy Phil Hogan

No.

Deputy Barry Cowen

We know about the €85 million that has been spent on consultancy fees or whatever the Minister calls them and the €45 million not spent on capital programmes to address issues-----

Deputy Phil Hogan

May I speak? It is difficult to-----

Chairman

Deputy Cowen has had nearly 20 minutes to ask questions and I have allowed him to contribute several times. Please, let the Minister respond without interruption, as I must move on to Sinn Féin's spokesperson.

Deputy Phil Hogan

The Deputy had nine hours last week to give his side of the story. Give me a chance to handle the Estimates. This year, we will spend €240 million on major capital works. There is a carry-over from last year relating to unfinished projects. That money must be spent, but Irish Water will deal with those projects. It will publish its public capital programme for water and sewerage schemes at the end of next month. We will see the colour of its money and what it can afford to do then. However, it faces significant issues. Irish Water has all of the assets now, but not all of them are in good shape. It is trying to find temporary and permanent solutions in that regard. Equally, Irish Water has all of the liabilities that used to lie with local authorities. This is a major undertaking, for which reason it needs asset management systems. They cannot be set up using fresh air.

The rural water programme will remain with local authorities. As with previous years, directors of services will issue a call for submissions, which will be evaluated. The Minister of the day will announce the allocations to be devolved to local authorities. Nothing has changed. This amounts to €28 million.

Deputy Barry Cowen

I asked for a breakdown of the €28 million.

Deputy Phil Hogan

For this year.

Deputy Barry Cowen

And on the septic tanks.

Deputy Phil Hogan

Last year, we allocated €4 million in respect of septic tanks. No grant was paid out because nobody has sought one yet.

Deputy Barry Cowen

There was no test done.

Deputy Phil Hogan

To be fair to Deputy Cowen, he was not involved, but Deputies Ó Cuív, Joan Collins and Mattie McGrath as well as members of his own party travelled around the country telling public meetings that there should have been a grant scheme, that people would need to pay an annual charge of €300 and that every septic tank would be inspected. Arising from a European Court of Justice case about which Deputy Cowen did nothing, we went to the European Commission. In spite of the legislation that I introduced quickly after I became Minister, we paid €2.7 million in fines because of the Deputy's inactivity. A part of the agreement that we worked out with the Commission was the requirement for inspections of 1% of everyone who had registered. Despite the protest meetings, 92% of people registered.

Deputy Barry Cowen

How many inspections have there been?

Deputy Phil Hogan

Some 1%-----

Deputy Barry Cowen

How many inspections have been carried out?

Chairman

Allow the Minister without interruption.

Deputy Phil Hogan

The agreement was 1%. That is exactly what we did in 2013.

Deputy Barry Cowen

Was the Government hoodwinking people?

Deputy Kevin Humphreys

Fianna Fáil did not want inspections-----

Deputy Barry Cowen

People have come to me-----

(Interruptions).

Chairman

The Minister, without interruption.

Deputy Phil Hogan

When I explained to the committee's members that we would have a good, practical solution to the septic tank issue, Deputy Cowen did not believe me.

Deputy Barry Cowen

I still cannot believe the Minister. No one has received a grant.

Deputy Phil Hogan

No. Sure, it is-----

Deputy Barry Cowen

No one has been given a grant.

Chairman

Without interruption, please.

Deputy Phil Hogan

I know what is wrong with Deputy Cowen. He wants to reverse engines. He wants everyone who has registered a septic tank to be inspected so that he or she might qualify for a grant.

Deputy Barry Cowen

I only want those who are entitled to the rectification measures that the Minister promised to apply for and draw down the grant.

Chairman

Deputy, allow the Minister without interruption.

Deputy Phil Hogan

Does Deputy Cowen know how many have failed the inspection?

Deputy Barry Cowen

None has been done.

Deputy Phil Hogan

They have been. The Deputy's local authority has been inspecting septic tanks in river basins since 2007.

Deputy Barry Cowen

For God's sake.

Deputy Phil Hogan

Am I right or wrong?

Deputy Barry Cowen

The Minister just told me that no grant had been drawn down.

Deputy Phil Hogan

No.

Chairman

Allow the Minister to continue without interruption, please.

Deputy Barry Cowen

People cannot apply because they have not been inspected.

Deputy Phil Hogan

Some 1% are inspected on a risk basis near rivers and lakes. If they have not been inspected but are registered, they obviously cannot draw down a grant. Does the Deputy want an open-ended scheme? From where would he get the money?

Deputy Barry Cowen

I want somebody who feels that he or she is entitled to rectify a septic tank because-----

Chairman

We can discuss that when we-----

Deputy Phil Hogan

If people feel that they have problems with their septic tanks, they are already breaking the law if they do not comply with the water source and water quality issues covered by the Water Services Act 2007. Local authorities have been inspecting septic tanks for years.

Deputy Cowen is asking me to arrange inspections for everybody so they can draw down a grant. That is not the arrangement we have entered into with the European Commission to comply with the European Court of Justice judgment that Fianna Fáil failed to do anything about and which resulted in fines of €2.7 million.

Out of the €28 million, €23 million will be allocated for rural water schemes and €5 million for septic tanks this year. We are putting €5 million into the Estimate in case people have a problem. All the Opposition Members told people at public meetings that it could cost up to €20,000 to repair a septic tank. Deputy Ferris was not behind the door in going around supporting this sort of nonsense at public meetings on water quality.

Deputy Brian Stanley

The Minister should stick to the questions.

Deputy Phil Hogan

I am sticking to the questions.

The Minister for Finance has included rainwater harvesting and other conservation measures in the home renovation scheme. Work in this regard can be included in whatever work is done in order to draw down the grant, if one is interested in grant assistance. Irish Water will be publishing a water conservation plan with additional measures in order to ensure greater capacity in the context of the work that it is doing and the future charging for water.

The cost of the operation of the water and sewerage schemes is €730 million. Approximately €200 million is being collected from the commercial sector in commercial revenue. That is deducted. The Local Government Fund provides the balance, or approximately €486 million. I hope I have dealt with a fair few of the questions. If there are any more, the Deputies should feel free to ask me them.

Deputy Brian Stanley

We have been probing the issue of the establishment of Irish Water because of our concerns. Deputy Cowen said he received an apology. I have not received mine yet. I asked a number of questions throughout last year on costs, including the cost of outside expertise and consultants. Those questions were not answered. Any answers I did get were nonsense. The Ministers completely sidestepped the questions in the Chamber and this is on record. Rather than asking the Minister for an apology, I ask him to send me one page with the relevant figures for last year. I have heard all the figures being talked up, down, backwards and forwards. Either deliberately or as a result of confusion, the figures have been presented in such a hodgepodge way over recent months that they have clouded over and distorted what is happening. Money comes in and out and revenue has been raised from various sources for Uisce Éireann, including the National Pensions Reserve Fund.

Anybody who has ever sat on the board of a small business or run a household would know how to proceed. It is very simple: on one side of a page one puts down what came in during 2013 and on the other side one puts down what went out, in addition to the sources. The Minister and two Ministers of State are present today with their most senior officials. I ask them to produce the figures for me. The way we were treated over the past year was a disgrace. We were deliberately misled over the past 12 months when we probed this. We had no answers for the public on how the agency would be established, the sources of funding, how the moneys would be spent and what was taking place. I feel aggrieved and annoyed by it. People elect me, in addition to the other 165 Members, to come here to represent them, and we should be able to get answers. Opposition spokespersons on these matters were deliberately misled, and information was deliberately withheld from us. I take no pleasure in stating that. I normally do not talk strongly on matters.

Deputy Phil Hogan

The Deputy called on me to resign last week; one could not get worse than that.

Deputy Brian Stanley

I asked questions on the cost of consultants and the cost of establishing Irish Water. If I remember correctly, advertising on the local property tax stated revenue would be used for parks, libraries, lights and paths. I heard the Minister and Minister of State Deputy O'Dowd say this many times. It now turns out that the €550 million landed into the Local Government Fund and that the Government pulled €490 million from that for the Irish Water subvention. The Minister can talk about this in whatever way he likes but the fact is that he put the money into a drum and pulled it back out again. He should not try to distort that in any way.

Of the money that is being spent, how much will be spent this year on rehabilitation in respect of leaks in the public network? This is a straight question and I demand a straight answer. The Minister answered the question on grants for septic tanks.

On the establishment of Uisce Éireann, the Minister and his officials have given figures. The Taoiseach gave figures also. I heard the Minister say the establishment of Uisce Éireann would save €2 billion over seven years. The cost of water services is to become more expensive. On this matter, I will make a bet of €50 or €100 with the Minister that my projections are correct. The Chairman can hold the bet and I will collect the winnings in a few years.

Deputy Phil Hogan

Gambler.

Deputy Brian Stanley

The Minister's officials referred to an annual saving of €1.1 billion over seven years. The Minister said it would be €2 billion, which points to a difference of €900 million. It is costing roughly €1.2 billion at present. Over seven years, this will amount to €8.4 billion. The Minister is saying he will save €2 billion. I asked him before how he would do that because he has created a macro-structure on top of what exists already, with 500 extra employees, call centres and God knows what else. How will it be cheaper given all the investment? Why is the Taoiseach on a different page from the Minister? Why are officials on a different page? I know the page I am on because when I calculate the current investment and analyse the structure of Uisce Éireann, I realise it cannot be less expensive. The iron laws of economics show it will be more expensive.

What I am asking about regarding the expenditure on Uisce Éireann is simple. We know the position of the Comptroller and Auditor General on accessing information. As the Minister said many times, this will be a stand-alone utility, a stand-alone commercial entity. Both he and the Minister of State, Deputy O'Dowd, said it many times in the Chamber. It was obvious at the time where they were going with this. When will the utility be subject to FOI mechanisms?

Can the table of expenditure be set out in a clear form for 2013? No more than a page or two is required. It would demonstrate to me and the public exactly what has happened. How much was spent last year on leaks? This is related to a question I have already asked. How much will be spent fixing leaks this year? Some 40% of the water is lost through leaks. I understand some good work has been done in Dublin on fixing leaks over recent years. I understand we cannot reduce leakage to zero. The Germans have probably gone as far towards zero as possible and their leakage percentage is still in double figures. However, if we could halve the number of leaks over the coming years, we would save a substantial amount of money, or several hundred million euro, in terms of water provision.

There is talk of new sources but there is no point pumping water from a new source into a leaking system. I have heard no talk to date about leaks being fixed. I have heard all about where the €180 million was spent, and we know about the call centres and other facilities that must be set up. If we could fix half the leaks, we would be going somewhere.

My last question relates to the building regulations and is directed at both the Minister and the Minister of State at his Department with responsibility for water. I accept that we cannot empty material from hardware shops and ask suppliers to get rid of stock, particularly in the current economic climate. However, I am asking the Minister to put in place new building regulations related to water harvesting and conservation. All new builds should have water harvesting and water conservation facilities. The home improvement tax incentive scheme introduced in the last budget is to be welcomed and could be linked into the retrofitting of older houses with water harvesting and water conservation equipment. Then, once older stock has been used up in hardware shops, dual-flush toilets can become the norm, along with other measures that will save water. I am making a serious proposal here. There are lots of simple measures that can be used to save water and we should not long-finger this issue. We should start to examine this now, in a serious way. The Department, this committee, the Dáil, local authorities and those who police the building regulations should focus on this now. New regulations should be put in place so that when the stock that is there is used up, we will introduce dual-flush toilets and water harvesting equipment, particularly in larger commercial buildings and new public buildings. No new public building should be built without water harvesting facilities. Thousands of gallons of water are running off roofs and we need to catch that water and use it.

Deputy Phil Hogan

To take the Deputy's last question first, I will definitely be doing that. I agree with the Deputy wholeheartedly-----

Deputy Brian Stanley

When?

Deputy Phil Hogan

As soon as I can. I have already told the Deputy that I will do it in 2014 and I am doing everything I can to amend the building regulations to ensure that new buildings and new planning applications will have to include a rainwater harvesting plan. I totally agree with the Deputy on that point.

I will provide the committee with the one or two pages of information on the financial issues that the Deputy raised. I have no difficulty with that. It is interesting to note that the figure for leakage in the network is 40%, which is exactly the same as the figure in 2006. We have spent €30 million per year every year since then and have made no impact because as we solve a problem in one area, another arises somewhere else. We have not been able to catch up with the low level of investment that we have on the leakage side. We will take three initiatives on the leaks. First, we need additional capital investment and that is where, off balance sheet, Irish Water will be able to borrow money in order to provide the additional capital investment for that purpose. Second, we are going to introduce a first-fix leak system to the metering programme so that when the meters are turned on, we will provide financial assistance in order to ensure that the customer is not held responsible for a legacy leak outside his or her boundary. However, there is customer side leakage as well and customers will have to find a way to resolve those themselves.

We estimate that with the metering programme, there will be a 15% reduction in consumption, which will save a considerable amount of water. This is based on an analysis of group water schemes, which are already metered. A lot of people in this country have had water meters for a long time. Those in the commercial sector and those in group water schemes have had meters for some time. When water meters were installed in the group water sector, the drop in consumption was between 20% and 30% because leaks had to be detected and repaired. There is a lot of good work going on in the group water sector that we are trying to learn from and which the contractors are learning from. The customer will also have to learn. The water conservation plan, to be outlined by Irish water, will take the best practice, knowledge and expertise that are out there and impart them to people.

The Minister for Public Expenditure and Reform will be making Irish Water subject to the Freedom of Information Act as quickly as possible. Indeed, he repeated that to me yesterday. We have no difficulty in doing that. We are not waiting for the legislation to go through the House before doing that. We will bring it in under the existing regulations. The Minister feels that he will be able to do that.

Deputy Brian Stanley

Will it be retrospective?

Deputy Phil Hogan

I do not know the answer to that but I will check.

Deputy Brian Stanley

I would ask that it be.

Deputy Phil Hogan

I have no difficulty if it is retrospective. I am simply telling the Deputy that the Minister for Public Expenditure and Reform has agreed to bring this in as soon as possible. That is all I can say. I cannot put a date on it. I believe I have dealt with the issues raised.

Deputy Brian Stanley

What about the figure of €2 billion?

Chairman

The Minister did not answer the question about the €2 billion savings.

Deputy Brian Stanley

Why is there a €500 million of a differential between the Minister and the Taoiseach and the officials?

Deputy Phil Hogan

The savings will be €2 billion. The Irish Water funding model will yield a potential saving of €2 billion over seven years. This is based on a comparison between the projected funding under the transitional arrangements to 2021 and the Irish Water funding model and it reflects projections regarding potential customer revenue, the funds from third parties, the likely levels of State support and the efficiency gains. Comparing like with like, it is €2 billion over seven years.

Deputy Brian Stanley

According to the officials from Irish Water and the Taoiseach, the figure is different.

Deputy Phil Hogan

They were taking into account efficiency gains of approximately €1 billion over the seven-year period but the gross savings that we are talking about are €2 billion.

Chairman

I thank Deputy Stanley-----

Deputy Brian Stanley

I have only been given a quarter of the time of the previous speaker and I have a question relating to the advertisements. There is still a differential of €900 million. Why did the Minister tell us last year that all of this money would be spent on footpaths, roads, lights, libraries and so on?

Deputy Phil Hogan

I would have thought that the Deputy from Laois, my good friend Deputy Stanley, would actually welcome the 11% increase in funding to Laois County Council and all of the county councils in the allocations they received before Christmas-----

Deputy Brian Stanley

The Minister is evading the question.

Deputy Phil Hogan

I cannot understand it-----

Deputy Brian Stanley

The Minister is not taking the prior losses into account-----

Chairman

The Minister without interruption, please.

Deputy Phil Hogan

I know it is a disappointment to the Opposition that it does not have another bone to pick with regard to the funding of local government because the local authorities got an increase of 11%.

Deputy Barry Cowen

There is nothing left on the carcass.

Deputy Phil Hogan

The carcasses are all strewn around the midlands. An additional €100 million has been given to the local authorities in 2014 to fund their programmes. That includes the proceeds of the local property tax.

Chairman

I will allow the Deputy to make one final point.

Deputy Brian Stanley

The Minister has gone off on a tangent-----

Deputy Catherine Murphy

Absolutely, and the Minister knows it.

Deputy Brian Stanley

He has taken the discussion off in a totally different direction.

Chairman

I ask Deputy Stanley to make his final point.

Deputy Brian Stanley

The final point I want to make relates to the underspend last year of €45 million.

Deputy Phil Hogan

The underspend on what?

Deputy Brian Stanley

There was an underspend on water services last year of €45 million which is being carried over into this year. There are schemes to improve water quality and water supply which are waiting to commence. Mountmellick is an example in that regard. Why is Mountmellick not being prioritised? Why are the schemes for places like Emo and Portarlington not being prioritised for capital investment? We have been discussing septic tanks and we are talking here about septic tanks in towns. There are septic tanks in houses on streets at the edges of the town.

Deputy Phil Hogan

The Mountmellick scheme has been delayed because there was a difference of opinion between Laois County Council and Mountmellick Town Council with regard to the extent of the scheme.

Deputy Barry Cowen

That is not true.

Deputy Brian Stanley

No. There was no difference of opinion.

Deputy Phil Hogan

That was just resolved last October and the Deputy knows that. The scheme is now with Irish Water and I will make inquiries to see what we can do to advance that scheme, as will Deputy Stanley. My Department has had a limited amount of resources for the past few years and hopefully the model we are introducing now will give us additional resources to try to make sure that the legacy issues in places like Emo, Portarlington and Mountmellick can be resolved. Hopefully we will be able to get the capital funds from the markets to get the job done.

Deputy Brian Stanley

Will it happen this year?

Chairman

The Minister of State, Deputy O'Dowd, wishes to contribute.

Minister of State at the Departments of Communications, Energy and Natural Resources and Environment, Community and Local Government (Deputy Fergus O'Dowd)

I would like to comment on the points made by Deputies Cowen and Stanley. I particularly wish to address Deputy Stanley's assertion that he was deliberately misled during debates in the Dáil. I utterly refute that assertion. The commitment to make Irish Water or Uisce Éireann subject to the Freedom of Information Act was given by the Minister for Public Expenditure and Reform last November. That commitment was repeated by me during the debate in the Seanad in December. At all stages during the debate in both the Dáil and the Seanad, we spoke about the annual report being available for debate in the Oireachtas by the relevant committees. I also gave a commitment that when the investment plan of Irish Water was prepared, it would be laid before the both Houses of the Oireachtas and fully debated.

There is no attempt to deliberately mislead people in that regard.

I met with the Commission for Energy Regulation, CER, during the debate and raised issues with it regarding its intentions and how it would explain its role, which is fundamental to the Bill. The CER has assured me that its staff are prepared to come before any Oireachtas committee to debate issues before any decisions are made and say what it wants to do, how it would proceed, and to provide total transparency. When a proposed decision is due it would then come before the Dáil for discussion. Subsequently, when the decision was made it would be debated again. At no stage was there any attempt not to have total transparency in terms of accountability to the Oireachtas on all fronts. I refute what was said.

A key issue that has been raised in particular by Sinn Féin, with which many of us agree, is that there would not be privatisation of Irish Water. That was expressly written into the Bill. There was no question of avoiding the issue or setting up a quango that would not be accountable. Deputy Cowen referred to parliamentary questions. I have the speech prepared for me and I do not see a reference to the comments he made but I would be happy to stand over them. The reality is that speaking in the Dáil on the issue the Minister said a third Bill was due on Irish Water. That is a matter of record. He said that anything that was not working would be examined. As I understand it, the Secretary General and the Minister have written to Irish Water to set up direct accountability to Oireachtas Members on queries they might have. Therefore, at all stages of the debate we have been transparent, accountable and open.

Deputy Phil Hogan

In case anybody will come along and say I did not give more information, although it does not really concern this Vote I will provide information on the metering programme because I am sure Members are interested in it.

Deputy Barry Cowen

I asked about it.

Deputy Phil Hogan

Yes, the Deputy did.

Deputy Barry Cowen

Deputy Murphy should not say I did not.

Deputy Catherine Murphy

No.

Chairman

The Minister should be allowed to speak without interruption.

Deputy Phil Hogan

The current water meter installation programme commenced in August 2013. I am sorry to cut across Deputy Murphy but this might be helpful in terms of a question she asked about meters. I know they are busy installing meters around Leixlip.

The approved budget for the metering programme is €539 million, excluding VAT, which includes the supply of the materials and the installation work by contractors operating in eight regions. The total spend on the programme at the end of 2013 amounted to approximately €35 million. It is estimated that 1.05 million meters will be installed under the programme, with 400,000 by the end of this year, 800,000 by the end of 2015 and the balance in 2016. The current rate of installation is approximately 27,000 meters a month and approximately 94,000 meters have been installed to date. We can give a breakdown region by region. In the midlands region, 22,064 meters have been installed. In the west, 6,520 meters have been installed – they are a bit slow in the west; in the north west 7,012 meters have been installed; a total of 8,550 meters have been installed in the south east; in County Dublin it is 15,646 meters and in the city of Dublin it is 13,613 meters.

Chairman

I thought Deputy Murphy was going to another meeting at 5 p.m.

Deputy Catherine Murphy

I am not going to the other meeting because this one is very important. The focus of attention has been on water services but there are additional substantial issues at stake. If one wants confusion in terms of income stream versus expenditure stream – pardon the pun - then one must look to the Department of the Environment, Community and Local Government. Let us look at page 16 of the briefing document, for example. I have asked parliamentary questions and assembled information. The general purposes grant is slightly more than €275 million. There is a payment to the Exchequer of €600 million. That was provided for in the local government Bill. One could ask where the €600 million came from. We can see where the €490 million for water services comes from. People feel they have been conned on that because they have seen it is coming out of the property tax. I refer to the fact that it was advertised and people expected 80% would go to their individual local authorities. They are now asking what they are getting for it.

Deputy Phil Hogan

Meters.

Deputy Catherine Murphy

That is a critical issue that will be raised in the coming months. In terms of the income of local government, some years ago the motor taxation income was ring-fenced for the purpose of establishing the Local Government Fund. That has largely proven to be the case. I have figures from 2006 to 2014. It is a sizeable amount of money – close to €1.1 billion. Basically, what appears to have happened is that in 2012, €46.5 million was taken out of that and given to the Exchequer. Last year €100 million was given to the Exchequer and this year €600 million is going from the Local Government Fund to the Exchequer. What has happened is that a decision was taken to change the regime in terms of ring-fencing the motor taxation fund. That fund is now going to the Exchequer. The money is primarily going to pay the national debt – the €8.2 billion it is costing this year to service the debt. We must focus on that. It is an enormous amount of money.

The money is in addition to the €490 million that is going from the local government system to Irish Water. That is changing the dynamic hugely in terms of local government. I wish to highlight the language that is being used on savings. The language that is used refers to savings to the Exchequer in regard to the €2 billion for water services. The reason it is a saving to the Exchequer is because there is a new income stream, namely, domestic water charges. The Minister might outline the extent of the domestic component he includes in that. Some significant changes are taking place. We got a presentation from both Ministers about what would be done but we did not hear about what will not be done. I hear expectations all the time about what people are getting for the property tax, why they have to pay water charges and whether it is a conservation measure. They are the two big issues people raise in terms of the impact of such taxes on their personal finances.

The Minister’s script referred to amalgamations at local government level such as of the Leader fund. There has been a dramatic reduction in the Local Government Fund which will affect all of the functions carried out by local authorities such as libraries, arts, parks maintenance, playgrounds – where they exist - and street lighting. The fund has been reducing year-on-year. The allocation from the Local Government Fund is not evenly spread due to variations around the country in terms of the resources and the income from commercial rates.

From a breakdown I got from the Department, the likes of Fingal County Council will be getting €165 per head from the Local Government Fund while Leitrim County Council will get €260 per head, understandable due to its small population base. The areas paying most in property tax will be getting the least amount of money from the Local Government Fund, however. People in those areas are entitled to ask why they are getting so little for their high property tax.

This week I had to refer ten families, not individuals, to the homeless officer in Kildare County Council. This happens every week now because of the high level of rents, low rent caps and limited availability of rental properties in the county. While increased employment with Intel and others in County Kildare is a good news story, it has a negative impact on the availability of rented accommodation. Up to 50% of those on the national housing waiting list, 45,000 people, are located in six local authority areas, namely, Dublin city, Cork city, Cork county, South Dublin, Fingal and Kildare. In the case of the bottom six local authorities with the least demand, they account for less than 4% of those on the national housing waiting list.

There is an absolute crisis in some parts of the country. It is a misrepresentation when the Minister talks about ending long-term homelessness when we are seeing an escalation in the problem. Is there anything worse than not having a roof over one’s head? I had a family attend my clinic before Christmas who spent the Christmas in bed and breakfast accommodation. In all my years as a local authority member, I never saw such a situation. There is an urgent need for a targeted response to this problem.

The joint committee recently was told by Dr. Michelle Norris that €480 million from European funds was available for the approved housing body sector. It could be used to fund housing associations like those in Germany and Holland where there is alternative housing provision. However, the tier 3 housing associations are not sufficiently capable of drawing down these funds. We are so fixated on doing head counts on how few people are working in the Department. Would it not be better, given that we are spending over €400 million in rent assistance, to increase the number working in the Department to have the expertise to draw down these European funds and make some savings for the Exchequer, as well as boosting construction sector employment? I do not get the logic of this. Will the Minister of State address this question?

People are confused with figures being bandied around such as €600 million, €490 million and €780 million. In addition to the moneys going to Irish Water, €600 million is going out of the Local Government Fund. That is pretty much going from motor tax receipts. This notion that, with a large fund available to local government, there will be increased local authority services is actually a complete con job. Essentially, the funds from the property tax are going to service the national debt. Will the Minister confirm what is happening with the motor tax fund?

Deputy Phil Hogan

It is all on page 16 on the Revised Estimates briefing paper circulated to the committee. Under subhead D3, income and expenditure of the Local Government Fund, income from local property tax comes to €550 million, gross motor tax receipts amount to €1.16 billion, and interest from local government moneys invested in the National Treasury Management Agency, NTMA, €150,000. This totals €1.71 billion. Outgoings are €280 million in general purpose grants, €363 million in public transport infrastructure payments and €600 million to the Exchequer, as the Deputy rightly pointed out. The fact is the country is broke and we have had conditionality through the troika for the past three years.

Deputy Catherine Murphy

That payment to the Exchequer was €100 million last year, however.

Deputy Phil Hogan

Yes.

Deputy Catherine Murphy

So, €500 million extra has gone to the Exchequer.

Deputy Phil Hogan

Yes, the Deputy is correct but it is there in front of her.

Deputy Catherine Murphy

People do not realise it though.

Deputy Phil Hogan

Well, one has to tell them the truth. Other outgoings include €50 million on miscellaneous schemes and the Irish Water subvention of €486 million. This comes to a grand total of €1.77 billion in expenditure. We supplement that with excess of income over expenditure of €68 million. If one wants to explain it to people, one cannot explain it clearer than that.

Deputy Catherine Murphy

Yes.

Deputy Phil Hogan

The Government wanted an 80% retention of the local property tax to allow local authorities more discretion in their budgets from 1 January 2014. However, we were not in a position to do that because of EU-IMF matters. We expect to be able to do it from 1 January 2015, instead. Those councillors elected on 23 May 2014 will be able to vary their budgets plus or minus 15% from the national rate from 1 January 2015.

Local authorities received €490 million for operational and maintenance costs for water supplies. The Dublin local authorities were subsidising their water supplies considerably.

Deputy Kevin Humphreys

No, they were not.

Deputy Phil Hogan

That is what they were telling us. There were surpluses of €26 million. They were not charging for the true cost of water supply. We put 40% of the capital into the Dublin region water supply. After one takes out the water supply funding which is now going to Irish Water and the local property tax, in 2014 there is an 11% increase in the moneys going to local authorities.

Deputy Barry Cowen

However, the Minister does not acknowledge revenue-----

Chairman

The Minister without interruption.

(Interruptions).

Deputy Phil Hogan

If the Deputy does not want to read the Revised Estimates, then it is not my problem.

Deputy Catherine Murphy

I have read them.

Deputy Phil Hogan

The local authority heading shows €1.7 billion in income with €1.77 billion in outgoings. There is an 11% increase in local authority funding and we are in a bailout. That is a tremendous boost to local government funding.

Deputy Catherine Murphy

I must say the Minister is just-----

Chairman

I call on the Minister of State, Deputy Jan O'Sullivan, to respond on the issues relating to homelessness.

Deputy Phil Hogan

Did Kildare County Council receive a cut in its funding in 2014?

Deputy Catherine Murphy

It is impossible to know and I will tell the Minister the reason.

Deputy Phil Hogan

Would the Deputy not talk to-----

Chairman

The Deputy will not get the opportunity, because three more speakers remain.

Deputy Catherine Murphy

It is because I do not know what the service level agreements were in respect of the water.

Deputy Phil Hogan

The Deputy should ask the county council's director of water services.

Deputy Catherine Murphy

That is the reason I do not know. I cannot compare like with like.

Chairman

I call on the Minister of State, Deputy Jan O'Sullivan.

Deputy Jan O'Sullivan

I wish to respond to the housing issues raised by Deputy Catherine Murphy. I absolutely share her concern about the number of people waiting on housing waiting lists. This is the reason that for the first time, the Government has introduced a mainstream construction programme through local authorities. The Government was unable to do it heretofore. It was not because it did not wish to do it but in recent years, it simply did not have the money because of the cut-back in the general amount of money available to the Government under the troika, following on from the debacle of what happened to the economy. However, the Government now has a housing construction programme, of which €65 million will go directly through the local authorities and €35 million through the voluntary sector. The programmes will be announced as soon as possible this year.

I listened to Deputy Murphy specifically on the fact that a small number of local authorities have the largest number of people waiting. I have specifically instructed in respect of this funding that there be a focus on those local authorities that have demonstrated the greatest need and the longest waiting lists. I do not wish to spend the money where there are no problems but wish to spend it where the predominant problem exists in respect of housing supply. This will be part of the policy pertaining to the expenditure of this money. I am highly conscious that a number of local authorities have particularly long waiting lists. As for the European money, Ireland has applied under the social investment programme of the European Union. The European Investment Fund is under the European Investment Bank and we have applied for funding under the scheme. If the Government gets this money, it expects it will provide approximately 1,500 units. While a response has not yet been received, it was brought to the Government's attention that there were very few applications under that fund from Ireland over a number of years since the fund was set up. In fact, the Secretary General of the Department of Finance is a member of the governing board of the European Investment Bank. The Government has been made aware that there were fewer applications from Ireland than should have been the case and an application now has been made that is specifically related to the housing sector. I hope we will be successful in getting funding.

The issue of homelessness is a top priority for me and I have stated that clearly. I set up an oversight group, which has reported, and I will bring a memorandum to the Cabinet shortly regarding its recommendations for addressing long-term homelessness in particular, as well as having a housing-led approach to it. In respect of the involvement of the not-for-profit sector, there certainly is scope for it to become involved in this area and I am working with that sector in this regard. The Government has now introduced voluntary regulation of the sector, which believes that if it is regulated, it will be better able to attract funding. This now is under way and eventually will lead to statutory regulation but for the present, voluntary regulation applies and the sector is very supportive of this.

Overall, the Government is addressing the housing supply issue in a number of areas, the main one being the return to mainstream construction, which obviously also is important for job creation, as well as applying for European funding. There is another programme called the social impact investment programme, which is starting this year and which is geared specifically at families. Again, it involves working with the voluntary sector and is geared towards addressing families in the Dublin area who have presented as being homeless. The Department also wishes to expand this programme. The Government is involved in a number of other areas and obviously, it continues to lease and to seek units from NAMA. In addition, approximately 50% of those who are on housing waiting lists are in receipt of rent supplement through the Department of Social Protection and thereby are in receipt of some housing support. There will be a gradual movement onto the housing assistance payment, HAP, scheme, which I acknowledge the sub-committee does not have time to go into today. I accept it is a question of addressing the growing waiting lists and that there are real problems with such waiting lists. However, the Government is addressing this in a variety of ways and the construction of housing is the new element this year. There had been construction for people with special needs, for older people and those who are homeless but the construction programme will now revert to being a mainstream local authority programme.

Chairman

Three questioners remain and I will take them together, namely, Deputy Corcoran Kennedy, Deputy Kevin Humphreys and Deputy Luke 'Ming' Flanagan.

Deputy Marcella Corcoran Kennedy

I thank the Minister, the Ministers of State and their officials for their attendance this afternoon. On the local government section, will each new municipal district have the opportunity to strike its own rate at its own level? In the past, authorities would have struck the rate but some councillors have suggested that flexibility be provided for start-up businesses in particular, perhaps in the retail sector. One might start off with 10% of the rate in the first year, perhaps rising to 30% of the rate in the second year and so on, until reaching 100% by year four or year five. Will such flexibility be included? If so, it will be welcomed by many of the new municipal districts, which will be welcoming the additional powers under the legislation.

In respect of water services and wastewater, I welcome the establishment of Irish Water and have listened with interest to some of the comments. It is greatly welcome that it will be amenable to freedom of information requests. It also is welcome that since the presentation last week and the presentations by the Ministers and Department, there is clarity on the source of the funding and on what it is being spent. Irish Water has been clear in that regard. I also note the negative commentary in respect of consultants and contractors. When one considers the companies that have been asked to provide the processes and systems, the list includes IT specialists and architects. I make the observation that one is talking about young people working in those companies and it does them no favours to be disparaging about the work they are doing.

In addition, political footballs have been kicked around at this meeting for the past hour or so and it is only right that I pick it up and kick it back. It is welcome to hear Fianna Fáil members talk about their concerns regarding spending. However, I remind them of the messes they left behind. I think of one in particular that pertains to the environment, namely, electronic voting machines, and I note that at least one company in County Offaly benefitted from dismantling them. That project certainly gave no value for the taxpayer. However, I feel strongly about the companies involved and some of the young people working therein. It is not right to be so disparaging about the work they are doing on behalf of Irish Water. While it is absolutely clear that it is very important to get value for the taxpayers' money, the testimony the witnesses gave last week from Bord Gáis makes clear the amount of savings it has been possible to put in place for the taxpayer, based on existing services, such as software contracts and so on, which I greatly welcome. Every effort should be made to ensure a smooth transition from the local authorities because they contain great expertise in this regard.

On the community and rural development aspect of the Estimate, I greatly welcome the funding that has been provided. On the transitional arrangements to be put in place under the new local community development committees, what does the Minister hope to do for this year in order to have it up and running by January 2015? Coming from the midlands and a rural area, I note these Leader and community development schemes have been really critical to capacity building in these areas. It will be of critical importance to continue with such capacity-building activities, particularly now when opportunities are to be put in place for retraining and to continue with such schemes. I greatly welcome this development and seek information on the transitional arrangements.

I will turn to the Minister of State, Deputy Jan O'Sullivan, and the unfinished estates. I have been following this issue with great interest even though County Offaly does not have a huge number of such estates, although there are some. I must note the work that has been done in this regard has been really exceptional.

It is a very good news story. That site resolution fund is being put to great use across the country and I am very glad it will continue to be put in place. People in the local authority are identifying the areas that need to be prioritised and that is working very well. I very much welcome that and hope it will be ongoing until all these are resolved because it is a major problem.

I am very concerned about homelessness. It is not as big an issue in the midlands as in other counties and I take Deputy Catherine Murphy's points on board. However the Simon Communities in Ireland do outstanding work in this area and they are experts in their field. I would be most concerned if I thought there would be any reduction in their funding. They run it all on a shoestring and they have a huge voluntary capacity. I would like some clarity on their funding.

Deputy Kevin Humphreys

I was involved in the Irish Water controversy. Back in November I asked parliamentary questions which were not answered. To assist the Minister in road testing the system I have resubmitted all those parliamentary questions. Depending on the fullness of the answers we can see whether the new system operates. Those questions are on their way to the Minister.

In the six target urban areas Deputy Catherine Murphy mentioned, my experience is that the vast majority of landlords are leaving the rental accommodation scheme because they can get a lot of money in the private sector. In urban areas in Dublin, Cork, Limerick and Galway there has been a major exodus. Can we examine ring-fencing that funding to target social housing? If it cannot be spent in the rental accommodation scheme we need the flexibility to shift the money into other areas to provide accommodation. Has much of the €15 million carryover of capital funding already been pre-committed?

According to page 39, more and more voluntary housing systems are being developed as the model to provide social housing, yet we are still using the RAPID programme to specify disadvantaged areas for applying for funding. The flaw in the RAPID system is that it excludes people in the rental accommodation system or in voluntary housing. Many communities are under pressure because they have people in voluntary housing. In my constituency one of the very clear examples is the Iveagh Trust. People housed by the trust are not accounted for in the RAPID system because it is not deemed to be social housing. The Iveagh Trust provides a huge number of social units in an area of deprivation in the city and has been left out of many funding projects. That whole area has been left out of targeted funding projects for deprived areas. Should we still be using a model that was designed ten or 12 years ago? Does it need to be updated?

The Minister was going to establish an expert advisory group on climate change on an ad hoc basis until we could get a statutory situation. The funding is so small it does not come into the Minister's Estimates but I would like some reassurance that it will be set up.

Deputy Luke 'Ming' Flanagan

The Minister, Deputy Hogan said he wanted Irish Water to be as modern as we could possibly make it. He tells us how important the project is and we know it is hugely important. The Minister would be very concerned about value for money. How concerned is he about the record of the head of Irish Water, Mr. John Tierney, on spending money and what the Local Government Audit Service said about a project he was managing?

Chairman

Stick to the Revised Estimates for 2014.

Deputy Luke 'Ming' Flanagan

Yes, I am asking whether we will get good value for money-----

Chairman

No, we have a special meeting tomorrow afternoon on the Poolbeg incinerator-----

Deputy Luke 'Ming' Flanagan

This has nothing to do with the Poolbeg incinerator.

Chairman

The Deputy can raise other issues.

Deputy Luke 'Ming' Flanagan

This is about the record of the person who is running Irish Water.

Chairman

No, it is not. It is about the Revised Estimates for 2014. Conclude by asking your questions please.

Deputy Luke 'Ming' Flanagan

In the Revised Estimates and the money the Minister will spend on Irish Water, does he think he will get good value given that it is being run by a man called John Tierney who in the past has been described as weak on financial management? In a project he was involved in there needed to be evidence of much more comprehensive oversight in monitoring and controlling expenditure. Can the Minister comment on that because people are not necessarily experts on IT systems or on whether one can get €1,000 or €2,000 a day as a consultant. All they can go on is whether they are confident in the person who is running it. The Minister must be aware of Mr. Tierney's past record. Why is he still in the job?

Have some of the people on whom the Minister is spending this money already received money from the local authorities through retirement packages? If so, how much have they received? An important question that was not asked of Irish Water is whether we will be able to drink the water and what systems are being implemented so that local authorities do not continue to investigate themselves.

The Minister has informed us that if someone is aware that there is a possible problem with his or her septic tank and does not do something about it, he or she is committing a criminal act. If people do not have money to do something about it, can they apply for a grant or do they need to come out of the tombola, have their tank tested and fail it, following which they are then entitled to a grant?

On the issue of solutions to our water pollution problems, what beginning-of-pipe solutions is the Minister considering? There is a problem with testing the septic tanks. Has the Minister examined the idea of locally run, community-based anaerobic digesters for animal waste as a solution to the problem that the only way the Government can secure drinkable water is if it doses the water with chlorine and numerous other chemicals? It passes the test but, bar swimming in it, it does not seem to be much use to us. The Minister will come up with some system that will solve all this. If we cannot drink the water, will we have to pay for it again? We are already paying for it through general taxation.

I will be very pleased if freedom of information legislation is to apply in this area but it is a little inconsistent with another semi-State entity, Coillte. If would be easier to get information out of the Kremlin. The Minister is running the country and does not seem to be too bothered about the fact that there is no freedom of information.

Chairman

The Minister to reply.

Deputy Luke 'Ming' Flanagan

There seems to have been hundreds of millions of euro spent on rent allowance at a time when the Government could refurbish some of the houses with some of the money involved. Local authorities apparently have no money to refurbish their houses. The Government could also buy houses, but there is a problem with that, and the Minister knows it. If the Government were to provide these people with houses in the morning and they were to move out of the houses they are in, the people who own those houses in the buy-to-let sector would lose out.

They would be in serious financial problems and we would take the hit through the banking system. The problem is that the blanket is not big enough to go around, rather than a solution cannot be found.

It is great to hear there is significant money available to deal with ghost estates, because going by what the local authority in my county, there is not much money to do anything about them. Last week, I visited a house on one of these estates and the people living in it now have to pay the property tax. The situation is a living hell for them and the local authority can do nothing for them because there is no money available. If I thought I would get away with it, I would go into the estate with a bulldozer and floor the 70 houses that are no longer of use there. There seems to be no light at the end of the tunnel for these people. Their house is like an oasis in the middle of the estate, beautifully painted and landscaped. It is immaculate, but the message being sent out to them and people like them is: "Don't bloody well try in this country, because if you do, you will get kicked in the head." That is what I see when I go there. We need more money to deal with this situation, because people who are trying are being punished. That should never happen, whether one is a socialist, a capitalist or an environmentalist.

Deputy Phil Hogan

Or an environmentalist.

Chairman

Thank you, Deputy. We will now take the response from the Minister, Deputy Hogan, followed by the Minister of State, Deputy Jan O'Sullivan.

Deputy Phil Hogan

Deputy Corcoran Kennedy asked a number of questions regarding local government. The commercial rate will be struck by the county or city authority, not by the municipal district. However, the municipal district members will be members of the plenary session when that happens, whatever municipal district they are from. If they want to have certain enterprise initiatives at local authority level, offhand I am not sure what discretion they will have in terms of commercial rates. There is nothing stopping these municipal districts or local authorities generally proposing these initiatives, as they do. For example, the bid scheme in Cork County Council is working exceptionally well, as is the bid scheme in Dublin city. These are examples of where the community comes into partnership with local authorities to advance certain enterprise schemes or develop certain enterprise initiatives. Arising from the changes we are making in local authorities, we want to see local authorities more to the front and centre in regard to enterprise, particularly in regard to promoting small businesses.

The Deputy mentioned the word "consultant" and I agree it was an unfortunate choice of words that did not tell the full story in regard to all of the start-up costs required for any public utility. We needed an ESB, we needed an EirGrid, we needed An Bord Gáis and we needed this public water utility. As I said earlier to Deputy Cowen, 90% of these costs will be assets of the company. These costs are necessary to have the asset management systems and for us to sweat down those assets in order to deliver good value.

Let me give an example. Shannon has a very bad situation in terms of wastewater treatment systems currently. Effectively, nobody can connect to the system there and if we wanted a new foreign direct investment to come into that area, it would be very difficult. Irish Water is looking at innovative ways to deal with this, at least temporarily, over the next five to seven years, with a low cost model, pending the new moneys that will come on stream in the future that will mean it can do a much better job. This is one of the new ways we can tide ourselves over, considering the fact the European Commission is considering launching a new infringement procedure in regard to 80 such plants, which is a concern.

The local community development committees which will be and are being established will be the partnerships between local authorities and the communities in terms of operating the local development programmes and new EU-funded programmes under the rural development programme. I expect that after the local elections in July, all of these committees will be in place. The timescale for the next round is early 2015 and we are working currently on the new plans to be submitted to the European Commission for approval, now that we achieved agreement in Brussels with the Minister for Agriculture, Food and the Marine, who is responsible for acquiring the funds for us for the rural development side, just before Christmas. We are working away at official level with the authorities in Brussels to fine tune the next round and we will come back to this committee to talk about the principles that should underpin this new round of funds. In regard to the European Regional Development Fund, we are also trying to include an urban based model so that we can accentuate some of the good work that is going on in the context of local development companies.

I can confirm for Deputy Humphreys that we will shortly set up the expert group on climate change and put in place the necessary arrangements and funding to make that happen. I will also make a statement soon on the progress we are making on the climate Bill. We will take into account some of the important issues raised in committee hearings when discussing the heads of the Bill.

In response to Deputy Flanagan, there was open competition for all senior management positions in Irish Water, including Mr. Tierney's position. He got through the interview panel and he has my full confidence and support for what he is trying to do. He has a very difficult job in setting up a new utility company, but there are governance arrangements in place for the board and he must report to a board whose members have good skills, including people with legal and governance expertise. He will report to these people. The chairperson of that board is Ms Rose Hynes, who was chairperson of Bord Gáis also and she has significant experience in terms of public accountability and governance arrangements in regard to any managing director.

I do not need to tell Deputy Flanagan about the situation regarding the water supply in Roscommon, as he is aware of the situation as he indicated in a colourful manner to the Minister of State, Deputy O'Dowd.

Deputy Luke 'Ming' Flanagan

It was much appreciated.

Deputy Phil Hogan

However, the Deputy did not acknowledge that we were at last, making an investment there. Some 50% of the population of Roscommon will have an enhanced water supply. With regard to people on boil water notices, I am prepared to tell the CER that this and such issues must be taken into account before charging these people. I would see it as very unfair for the regulator not to take these issues into account until such time as the quality of the water in Roscommon is up to the type of standard we should have. We will include this as part of our submission.

The Environmental Protection Agency, EPA, is the regulator in regard to drinking water quality. It has a long list of problems where remedial action is required throughout the country and we will need a significant amount of money to deal with the problems. The EPA has determined there are approximately 1 million people in the country affected by risks in terms of quality, particularly in Dublin, Cork and, of course, Roscommon. This is a big challenge and that is why we are setting up Irish Water.

Deputy Luke 'Ming' Flanagan

I have not had an answer to this question, which is one that I imagine would concern the Minister's local authority and everyone else. If a person discovers there is pollution and suspects it comes from the local authority, whether deliberate or not - it would be highly unlikely it would be deliberate, but accidents happen - and the person wants to get something done about it, he goes to the EPA and the council then investigates the issue itself. That is my experience of the EPA. Despite the best will in the world, it is very difficult for people to investigate issues themselves. Let us imagine a member of the public makes a complaint to the EPA in the context of water quality. People in this country do not like making complaints like this, although they should be proud to do it. However, if and when they make a complaint about a council supply, they see that the council itself investigates the matter. We need to change that.

Deputy Phil Hogan

The EPA has to license all wastewater treatment plants. Perhaps the Deputy's experience in Roscommon is that the local authority goes out and investigates issues itself, but that should not be the case. The EPA should be doing it as part of the licensing conditions.

Deputy Luke 'Ming' Flanagan

It does not have the staff on the ground to do that.

Deputy Jan O'Sullivan

Deputies Corcoran Kennedy and Flanagan both raised the issue of unfinished estates. We are making good progress on this issue. The initial funding was for dealing with public safety issues, but a further €10 million was announced in the budget by the Minister for Public Expenditure and Reform. This money is specifically for unfinished estates with public realm issues that can be addressed, such as footpaths and public lighting. We are now asking local authorities to submit proposals for this funding. The money is for the type of measures mentioned, particularly where there is no bond or an inadequate bond is in place. We expect that funding will also be a stimulus for private funding to be spent on estates like that referred to by Deputy Flanagan. We expect that if the lenders and developers see there is money coming in from public funds, they will spend money on completing houses, etc. We intend to spend that money in 2014 to address the issues on some estates. Contrary to Deputy Flanagan's suggestion there is no hope for people, €10 million has been allocated this year to address the issues of unfinished estates.

Deputy Luke 'Ming' Flanagan

That would not do for Ballaghaderreen alone.

Deputy Jan O'Sullivan

I am just telling the Deputy about it.

Deputy Luke 'Ming' Flanagan

It is not enough.

Deputy Jan O'Sullivan

Also, the local authority should have a site resolution plan for the estate so the Deputy might take the issue up with it. This is a positive story and we are making very steady progress in this regard.

With regard to the issue of homelessness, we will maintain the same amount of funding this year, €45 million, so there is no reason to believe the midlands in particular should have any problem.

Deputy Brian Stanley

I wish to ask a question on housing.

Deputy Jan O'Sullivan

I have several more questions to get through. Deputy Humphreys raised the issue of the shortage of RAS units. There is a difficulty, particularly in the Dublin area, with regard to the responsibility of the Minister for Social Protection for rent supplement accommodation and RAS. We will keep it under review. The intention is the funding we have this year will provide for a further 2,500 transfers to RAS. We will re-examine it mid-year because this situation changes rapidly. We will also introduce the housing assistance payment under which people will move to differential rent. It will be introduced in seven local authority areas in the first phase and will eventually be introduced in all local authorities. The first phase will start in 2014 and we will monitor it. The Deputies for Kildare and Dublin will probably disagree with Deputy Flanagan's suggestion that we keep rent supplement going to fill private accommodation. It is the opposite in some parts----

Deputy Luke 'Ming' Flanagan

I said it would cause a problem if they were all out. I ask the Minister of State not to misquote me.

Deputy Jan O'Sullivan

In some parts of the country it is very difficult-----

Deputy Catherine Murphy

Rent supplement is not accepted.

Deputy Jan O'Sullivan

-----to get rented accommodation.

Chairman

The Minister of State without interruption. Thank you for the chorus.

Deputy Jan O'Sullivan

Deputy Humphreys also asked about RAPID. We will examine it to see whether there is an issue. It crosses between my responsibilities and those of the Minister, Deputy Hogan. The €15 million carryover about which Deputy Humphreys asked will go into the general construction programme. I stated there was €65 million for local authorities, with €35 million through the voluntary sector. There is also €15 million, which I did not mention, to bring long-term voids back into use. Some local authorities in particular have houses which have been empty for a long time. They are owned by local authorities but have been vacant for a long time because it is very costly and there is not enough money to do them up under the normal housing maintenance budgets. We have a specific €15 million fund for them.

Chairman

The last time the Minister of State spoke about them at committee I mentioned several examples, which are still vacant. I accept that after a period of time they go into a state of particular disrepair but with one house all one had to do was hand the key to the next tenant and there would have been no issue. The local authority would have received rent and the house would not have fallen into disrepair. I find it incredible that on one street in my town houses have been vacant since the late 1990s. It is absolutely scandalous.

Deputy Jan O'Sullivan

There are very different patterns. Some local authorities turn over houses very quickly and others very slowly. If there is nothing to be done, the local authority should reallocate the house as quickly as possible. This fund is for houses which need a lot of work and where the local authorities tell us they simply do not have the money to do it. It is a separate €15 million which was also part of the budget announcement.

Deputy Phil Hogan

I did not answer questions on service level agreements asked by Deputies Murphy and Cowen. I will put up a generic service level agreement on the website today and each local authority must explicitly account for it in its accounts with Irish Water.

Deputy Catherine Murphy

Will the accounts be done at the end of the year?

Deputy Phil Hogan

We only have a generic service level agreement since the Bill was passed before Christmas so we could not do anything before now. It will be put on the website to show what will be involved. Local authorities must then account for it explicitly in their accounts afterwards. The Deputy will be able to get the full picture. The director of services, finance or water should be able to explain it.

Chairman

I call Deputy Humphreys but he should not make a speech.

Deputy Kevin Humphreys

I have a quick question and not a speech. The Deputy from Fine Gael and I were not given our time slots when we should have been. We were grouped together, but that is an argument for another day.

My question is for the Minister of State, Deputy O'Sullivan. The banks regularly come before another committee to discuss the issue of mortgage resolution. The vast majority of shared ownership mortgages are in arrears and the figures we are beginning to receive from local authorities show they are also in arrears on rent on the 50% they own. This is a huge distress factor for the individuals themselves because they are concerned they cannot meet their mortgage repayments and are not able to meet the rental element either. There seems to be an unwillingness to resolve this issue. There is no provision in the Estimate for a resolution to these mortgages. These were all high-risk mortgages in the first instance because they had to have had two refusals from lending agencies. It is a real drag on local authorities because they are making full repayments to the Housing Finance Agency. The Housing Finance Agency has provision for bad debts or write down. Is the write down on the mortgage the responsibility of the Department or the Housing Finance Agency? A large number of families are in a very delicate situation. It is also causing problems for local authority funding, but there seems to be no resolution for these individuals. Where should we expect to see funding put in place to resolve mortgage resolution issues in this area?

Chairman

I call Deputy Stanley who must ask a very quick question and not make a speech.

Deputy Brian Stanley

The Midlands Simon Community's funding has been cut substantially and I was shocked when I saw the letter which detailed it. I agree with the previous speaker that of course the homelessness situation in Dublin, Cork and other such places is worse, but there is homelessness in the four midlands counties and the Midlands Simon Community is trying to firefight. I ask the Minister and the officials to examine it because I was shocked by the figures. I also ask for the grants to be re-examined. Kilkenny received almost three times the amount that Laois did this year for housing grants, mobility aids, housing adaptation and housing aid for older persons, despite the fact the population is only 14% bigger.

Chairman

What is Deputy Stanley's question?

Deputy Brian Stanley

Will the Minister of State re-examine it?

Deputy Michelle Mulherin

I have a brief question for the Minister, Deputy Hogan. Historically many villages and rural areas throughout the country lost out on water and sewerage infrastructure investment because they were not commercially viable and local authorities could not come up with the polluter pays contribution. How will the interests of those who need services in these areas be safeguarded so that Irish Water does not just use a commercial test to decide it will prioritise on the basis of return on investment, and that these areas, which have suffered and lack infrastructure because they are not commercially viable, will receive the infrastructure promised in due course?

Deputy Phil Hogan

This is why the rural water programme is with local authorities. Irish Water will be more concerned with major urban areas and major investment opportunities which will provide jobs-----

Deputy Luke 'Ming' Flanagan

More than in rural areas?

Deputy Phil Hogan

I have retained group water schemes and rural water schemes in local authorities so we can target all of the issues Deputy Mulherin raised with regard to CLÁR areas. Does Deputy Flanagan know about CLÁR areas given that he is from Roscommon?

Deputy Luke 'Ming' Flanagan

I do.

Deputy Phil Hogan

They are a legacy issue I inherited from Deputy Ó Cuív where funding was cut in 2010. We must now find money to finish schemes in very remote rural areas which otherwise could not be finished. We are examining it, as Deputy Mulherin knows, to see what we can do to supplement community groups and ensure they have the basic human right of adequate water.

Deputy Jan O'Sullivan

The shared ownership scheme has been an ongoing difficulty and I asked the Housing Agency to research how we might address it. It has come back with an interim report and we have issued a circular. There is more work to be done because it does not address all of the particular difficulties which arise under shared ownership. An issue which has been addressed is people on shared ownership can now apply for the mortgage arrears resolution process available to local authority tenants as well as private mortgagees.

They can apply under the mortgage to rent scheme as well, which means they return to being renters. However, I acknowledge further work must be done on the shared ownership scheme.

Deputy Stanley raised the issue of the Midlands Simon Community, which I addressed earlier. The funding for homelessness is the same this year as last year. There is a regional forum, which makes decisions, and we will maintain contact with the forum in this regard.

With regard to the housing grants, I refer to the way we are allocating the money this year. The funding has increased from €35 million to more than €38 million. The base we are using is last year's allocation and on top of that we will weight the additional money on the basis of the over 65s population. In other words, the elderly population as well as the general population are taken into account in the additional amount allocated to each local authority.

Deputy Brian Stanley

There are not so many old people in Kilkenny.

Deputy Jan O'Sullivan

I presume Kilkenny has a larger population than Laois.

Deputy Brian Stanley

By some 15%.

Chairman

The Minister of State without interruption.

Deputy Jan O'Sullivan

We used a fair formula based on the general population plus a weighting for our older population to allocate additional amounts to each local authority.

Deputy Barry Cowen

I refer to the funding provided by the Department to local authorities for older person's grants and disabled person's grants. Much of that funding is dependent on the monetary input of the local authorities in the context of the amount allocated overall. Local authorities have a diminishing ability to put funds towards these grants and they are being penalised as a result in the allocation provided by the Exchequer. There are four and five-year waiting lists, respectively, for these grants in County Offaly.

Deputy Jan O'Sullivan

If I did not ask the local authorities to provide 20% of this funding, I would have less money to go around. This is a way of trying to ensure we have as much money as possible for a limited fund and we want the money to go to those who most need it. The upper limit for the disabled person's grant is €30,000 while the threshold for the elderly person's grant has been reduced from €10,500 to €8,000 but the average grant is €5,000. Local authorities spread the money around but it is a limited fund. If we provided a 100% grant from central funds, that would mean less money to go around.

Deputy Barry Cowen

Was any weighting given to the existing local authority waiting lists in this regard? There are four and five-year waiting lists, respectively, for these grants in County Offaly.

Deputy Jan O'Sullivan

Local authorities need to address that issue in terms of how they manage the funding they receive. As far as we are concerned, we make the allocation as fair as we can. Local authorities make different decisions about how they spend that money.

Chairman

I did not ask Deputy Humphreys to conclude when I grouped him with Deputy Corcoran Kennedy. They finished of their own accord. I will let the Deputy in to ask a detailed question. The issue generally is that the Opposition spokespersons make Second Stage-type contributions and towards the end of a meeting, time becomes scarcer. When we discuss the Poolbeg incinerator issue tomorrow, we will revert to questioning in this manner, because it is a fair system for both Opposition and Government members.

Deputy Barry Cowen

The Local Government Reform Bill 2013 is in the House tomorrow for many hours and I presume the Minister will take that. Many members want to contribute to both debates. The committee will have to change its schedule.

Chairman

When is the Bill scheduled?

Deputy Barry Cowen

Both in the morning and the afternoon.

Deputy Catherine Murphy

Predominantly the afternoon, although the Bill will be taken for an hour prior to Leaders' Questions.

Chairman

Will the Deputy raise the issue of Dáil business conflicting with committee business at the next meeting of the Whips? This is not the first time this has happened. Question Time to the Department was taken in the Chamber on one occasion while members were attending this committee.

Deputy Barry Cowen

Could the witnesses be asked to attend later in the afternoon or the evening? Committees met last week at 6.30 p.m. and 7 p.m., conveniently at the same time a motion was being taken in the Dáil.

Chairman

I am informed by the clerk to the committee that tomorrow's meeting will commence later in public session because we have a large volume of correspondence to address.

Deputy Catherine Murphy

The problem is we cannot attend. There will not be a quorum. How can we be in two places at once?

Chairman

The meeting is scheduled for 2.15 p.m. Can we defer it? The issue I raised before we got into this related to speaking slots during our meetings.

Deputy Kevin Humphreys

The conflict relating to business must be taken up by the Whips. The committee has a keen interest in the Bill and I am anxious that the Poolbeg incinerator discussion takes place. Was Owen Keegan invited to attend or did he make a request to attend? I am not clear about this.

Chairman

Deputy Stanley requested his attendance.

Deputy Kevin Humphreys

The Committee of Public Accounts wants to investigate this issue and there is a need for us to discuss it before that committee.

Deputy Barry Cowen

Could the meeting be deferred to 4.30 p.m.?

Deputy Kevin Humphreys

We could take the Poolbeg element of the meeting at 4 p.m. and go through the correspondence initially.

Deputy Barry Cowen

If some of us are detained in the House, we will be excluded in the discussion.

Chairman

Is that agreed? We could be here for a year. There is a wider issue, which the Whips must resolve. We will meet as scheduled.

Deputy Catherine Murphy

We are deeply unhappy.

Chairman

The Deputy can reiterate that point tomorrow. I thank the Ministers and their officials for their attendance.