Dáil Éireann Debate, Wednesday - 23 October 2013
9. Deputy Niall Collins asked the Minister for the Environment, Community and Local Government the details of the planned rescheduling of the recoupment of local authority loans; the authorities involved; the amount per authority; the repayments due; and if he will make a statement on the matter. [44856/13]
Amharc ar fhreagra148. Deputy Barry Cowen asked the Minister for the Environment, Community and Local Government if he will provide details of the planned rescheduling of the recoupment of local authority loans; the authorities involved; the amount per authority; the repayments due; and if he will make a statement on the matter. [44946/13]
Amharc ar fhreagraI propose to take Questions Nos. 9 and 148 together.
The capital loan and subsidy scheme, CLSS, was introduced in 1992 for the purposes of providing long-term mortgage finance from the Housing Finance Agency, HFA, to facilitate the provision, by approved housing bodies, of standard rented accommodation for low-income families. The scheme is administered by the local authorities and repayments of principal and interest charges to the HFA are made at six-monthly intervals by the local authorities, provided the relevant housing body complies with the terms and conditions of the funding scheme. Local authorities are recouped the full amount of the loan charges by my Department. The CLSS was terminated in 2009 and no new voluntary housing projects can be approved at this time. Given that most CLSS loans are for a period of 30 years, loan charges will continue to apply for many years to come.
Under the terms of the CLSS, loan charges are payable by local authorities in two tranches each year on foot of invoices issued by the HFA for the periods January to June and July to December. Charges for the January to June period are payable by 31 July each year and charges for the July to December period must be paid by 31 January. In accordance with custom and practice over many years, details of the loan charges due issue in December, starting with those local authorities with the greatest level of borrowings. These generally are the Dublin authorities and some large rural authorities. On receipt of claims from these authorities, my Department processes and recoups the loan charges, subject to the availability of funding and, in turn, those authorities pay the charges to the HFA.
CLSS loan charges for 2014 are estimated to be approximately €64 million and the loan charges for the July to December period must be paid by 31 January. By synchronising the recoupment of loan charges and putting each local authority on the same footing, with each local authority recouping loan charges in early January, there will be a once-off saving of approximately €15 million in 2014. This is a straightforward accounting exercise with no implications for local authority finances. All local authorities are put into funds in the same calendar year and repayment of loan charges can be made in accordance with the HFA requirements. There is the advantage of a once-off easing of recoupments in a given year. Given the pressing need to maintain public services and support employment generation at this time, I believe it is opportune to streamline loan repayments in 2014 to support these objectives.
I thank the Minister of State for her response. She stated there would be no effect on local authority finances and I take her at her word in that regard. However, as she stated, €15 million in savings are being made. Will the social housing agencies then come out of this in a worse position? If this is the case, can their tenants expect to see increases in their rents? If the Minister of State claims there are €15 million in savings to be made by virtue of this scheme, it will be at the expense of the social housing agencies that drew down the loans and whose duty it is to repay them. The Minister of State has indicated that €15 million in savings will be made and consequently, I expect it will be at their expense. If this is the case, can their tenants expect ramifications?
To clarify, this is simply an accounting exercise whereby something the Department would have paid in December now is being paid in January because the amount is not actually due until the end of January. It will be a once-off change for this year but in the future, the money that is owed for the last six months of each year will be paid in the January of the following year and-----
So it is not a saving at all.
-----consequently, it will not affect anyone.
Then it is not a saving at all. The Government simply is paying the amount it owes for the period between June and December at a different time of the year.
While it will be in the budget for next year-----
If it is a saving, how does the Minister of State expect the revenue to-----
Sorry, allow the Minister of State to reply and then you can respond.
It will be in the budget for next year because it will not be paid at the time it normally would be paid. However, it is simply a straightforward accounting exercise of moving a payment from one year to the next.
That is fine but if it is an accounting exercise, it should not necessarily be described as a saving because it will be paid, regardless of the time of year at which it is paid. It only builds up people's expectations that if a saving of €15 million is being made, that sum would be available for purchases for some other section of the Department. As I stated earlier, the accounting exercise Members heard regarding the budget announcement was contradicted previously, when the Minister of State indicated the €30 million coming from the lottery fund on foot of the announcement by the Minister, Deputy Howlin, would be subsumed in the loss and the cut in respect of capital expenditure anyhow.
That was €30 million more than Fianna Fáil allocated.
The Government has been quite upfront about this, what it is and precisely how it will affect the budgets.
