Written Answers Nos. 110-119
110. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the concept of the use of Government development bonds will be utilised to fund vital infrastructural projects such as drainage and flood alleviation or a public housing programme to ensure that such costs do not appear on the Government's balance sheet; and if he will make a statement on the matter. [1810/16]
Amharc ar fhreagraUnless provided for by specific legislation, all revenues including the proceeds of Government borrowing are paid into the Exchequer's Central Fund. Revenues are not linked to specific projects but rather are used to fund Government expenditure generally, including capital and infrastructural expenditure.
The National Treasury Management Agency (NTMA) has advised that Government bonds issued by the State which are linked to specific projects may be of limited interest to investors due to concerns about a relative lack of liquidity. Reflecting this lack of liquidity, investors would likely require higher yields than standard Government bonds.
However in the case of a Public Private Partnership (PPP), where the State selects a private consortium to Design, Build, Finance & Operate State infrastructure, that private consortium can issue project-specific bonds. Such bond issuance may be deemed to be outside of General Government provided that the necessary risks are contractually transferred to the private sector in line with Eurostat rules. These latter type of bonds are considered by investors to carry significantly more risk than standard Government issued bonds and consequently require higher yields to reflect the risk profile. The National Development Finance Agency (NDFA) has advised that there is currently a strong supply of funders for PPP projects.
I can confirm that the Government remains committed to exploring alternative means of financing capital projects. The NDFA is charged with advising on the optimal means of financing the costs of all public investment projects over €20 million in order to achieve value for money, including the €2.25 billion stimulus package announced by the Government in July 2012. NDFA continues to facilitate securing funding for both PPPs and non-PPP capital projects from a wide range of sources including domestic and international banks, institutional investors and supranational organisations such as the European Investment Bank and the Council of Europe Development Bank.
111. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which credit remains readily available to the small business sector. [1811/16]
Amharc ar fhreagraAs the Deputy is aware, the Government recognises that small businesses play a central role in the sustainable recovery of the Irish economy. To facilitate this, Government policy since 2011 has been focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. Officials from my Department regularly meet representatives from the Small Firms Association, Irish Small and Medium Enterprises Association and Chambers Ireland to discuss issues around access to finance. AIB and Bank of Ireland are concentrating on growing their balance sheets. In this context, both banks recognise the need to increase business lending and have put on record their commitment to the SME sector. The recent Department of Finance SME credit demand survey covering the period April-September 2015 shows that 85% of SME credit applications were approved, excluding pending applications. Further results from the survey can be found at www.finance.gov.ie.
My Department has been involved in a range of initiatives to encourage access to credit for small and medium sized businesses. The SME State Bodies Group provides a forum for the development and implementation of policy measures to enhance SMEs' access to a stable and appropriate supply of finance.
Some of the main policies introduced by this Government to encourage access to credit for small and medium businesses include:
- The Supporting SMEs Online Tool, a cross-government initiative, was launched in May 2014. On answering 8 simple questions, the small business will receive a list of available Government supports. The Supporting SMEs Online Tool is available at www.supportingsmes.ie.
- The Strategic Banking Corporation of Ireland has been established as a means of ensuring that SMEs are provided with sufficient finance for growth. The Strategic Banking Corporation of Ireland (SBCI) is an initiative designed to increase the availability of funding to SMEs at a lower cost and on more flexible terms then have recently been available on the Irish Market in recent times. The SBCI does not lend directly to SMEs. It uses a network of lending partners known as 'on lenders' to make its funds available to SMEs. More information on the SBCI can be found on www.sbci.gov.ie.
- The Credit Guarantee Scheme encourages additional lending to small businesses by offering a partial Government guarantee to banks against losses on qualifying loans to eligible SMEs. My colleague, the Minister for Jobs, Enterprise and Innovation, has recently brought legislation to the Oireachtas which will enable the development of a more flexible Credit Guarantee Scheme with longer duration and more products and providers included.
- The Microenterprise Loan Fund, administered by Microfinance Ireland, provides support in the form of loans for up to €25,000, available to start-up, newly established, or growing micro enterprises employing less than 10 people, with viable business propositions. Microfinance Ireland works in partnership with the Local Enterprise Offices nationally to administer this fund (www.microfinanceireland.ie).
- The Credit Review Office helps SME or Farm borrowers who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. They also examine cases where borrowers feel that the terms and conditions of their existing loan, or a new loan offer, are unfairly onerous or have been unreasonably changed to their detriment. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Reviewer John Trethowan and his team have overturned 55% of the refusals that have been appealed to the Office. Further details are available at www.creditreview.ie.
My Department and the Credit Review Office, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit on both a macro and sectoral basis in order to ensure that sufficient access to finance is available to facilitate participants in the SME sector to reach their full potential in terms of growth and employment generation.
112. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which bank charges are in line with charges in other jurisdictions; and if he will make a statement on the matter. [1813/16]
Amharc ar fhreagraAll credit institutions in Ireland are independent commercial entities and I have no statutory role in relation to the charges applied by credit institutions. Section 149 of the Consumer Credit Act 1995 requires that credit institutions, prescribed credit institutions and bureaux de change must make a submission to the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges in respect of certain services. Section 149 does not cover interest rates rather it applies to fees and commissions only. The Central Bank may direct the institution not to impose the new or increased charge or it may approve the charge, or approve it at a lower level than requested by the institution. Once approved, the bank is entitled to impose the charge.
Relevant charges are assessed by the Central Bank in accordance with the assessment criteria laid down in the legislation as follows:
- the promotion of fair competition between credit institutions;
- the commercial justification submitted in respect of the proposal;
- the impact new charges or increases in existing charges will have on customers; and
- passing on costs to customers.
Credit institutions are legally bound to comply with Letters of Direction, which set out the maximum amount the credit institution is allowed to charge for the relevant service. Credit institutions are free to impose any pricing differentials for the service up to the permitted maximum and are free to waive fees at their discretion.
My Department published a report on the review of the regulation of bank fees and charges in December 2013. This contains a detailed description of the process by which the Central Bank makes decisions on whether or not to approve proposed charges. It is available on my Department's website at www.finance.gov.ie. Among the key findings of the review was that while fee and commission income has become a more important source of income to the banks in recent years, net fee and commission income in Irish banks was well below the average of their European peers.
The European Communities (Payment Services) Regulations 2009 (the Payment Services Regulations) include requirements for banks and other payment institutions to provide information to the consumer about charges, interest and exchange rates on the accounts and these are reflected in the Central Bank's Consumer Protection Code 2012, which contains requirements in relation to the provision of information on charges to consumers. The revised Payment Services Directive (known as PSD2) was published in the Official Journal on 23 December 2015. Member States will be required to transpose the Directive by January 2018. Among its other objectives, PSD2 is expected to promote competition, meaning increased choice and better conditions for consumers and businesses.
Irish financial institutions have varying models for charges and have different regimes and conditions under which they are willing to grant transaction free banking. Individuals' use of their bank account will be specific to each individual and I would strongly encourage people to shop around for the best deal for them. In this regard, the CCPC website, www.consumerhelp.ie is a valuable resource.
113. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the interest rates charged to borrowers are in line with interest rates charged in other jurisdictions throughout the European Union; and if he will make a statement on the matter. [1814/16]
Amharc ar fhreagraFirstly, I assume that the Deputy is referring to mortgage interest rates which I will discuss below. However, for all loans I would encourage prospective borrowers to shop around for the best deal available. In this regard the Competition and Consumer Protection (CCPC) website, www.consumerhelp.ie has very useful information for borrowers.
With regard to mortgage interest rates, I would like to confirm to the Deputy that the lending institutions in Ireland - including those in which the State has a shareholding - are independent commercial entities. I, as Minister for Finance, have no statutory role in relation to regulated financial institutions passing on the European Central Bank interest rate change or in relation to the mortgage interest rates charged.
The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. This interest rate is determined taking into account a broad range of factors including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution's overall funding.
Last May, I requested a report from the Central Bank on the topic which was subsequently published. The Report on the Influences of Standard Variable Rate Mortgage Pricing is available here: https://www.centralbank.ie/press-area/press-releases/Documents/Influences%20on%20SVR%20Pricing%20in%20Ireland%20(5).pdf. It stated that the spread between official ECB interest rates and the standard variable mortgage rate is relatively high in Ireland, both by historical standards and compared to European peers. However, three factors are important determinants of this margin, namely increased credit risk resulting from high levels of non-performing loans and lengthy and uncertain processes of collateral recovery, weak competition, and the constraints on bank profitability arising from legacy issues of the financial crisis, such as an increased regulatory requirement for capital.
Nonetheless, I have taken steps to ensure that the banks provide options for mortgage holders to reduce their monthly repayments. I met with the six main mortgage lenders in May and outlined my view that the standard variable rate being charged to Irish customers was too high. The banks agreed to review their rates and products and, by the beginning of July, to have simple options to reduce monthly mortgage payments for SVR customers.
In September I concluded a series of follow up meetings with these banks and the reality is that the majority have put options in place to allow many borrowers reduce their repayments. These options range from lower variable rates to new suites of variable rates based on loan-to-value and reductions in fixed rates. I therefore encourage borrowers to contact their bank to see what is available to them in their circumstances or consider moving to another bank, where possible, if the offer is not satisfactory. In this regard, the Competition and Consumer Protection Commission (CCPC) website www.consumerhelp.ie which I referred to earlier is a valuable source of information on the rates charged by various financial institutions. In addition, the CCPC are currently running a mortgage switching campaign and have a mortgage switching tool on their website which should allow borrowers compare rates charged across institutions. I also note that some lenders offer repayment of legal fees or cash incentives to borrowers switching mortgage provider.
I asked the banks to provide options by which borrowers could reduce their monthly repayments and I believe options have been put in place. Furthermore, I am pleased to see that new initiatives and reductions continue to take place. As recently as last week one bank introduced a 0.5% reduction on managed variable rates for new or switcher mortgages with a loan to value of 80% or less. Another bank reduced its SVR in December. These initiatives illustrate the increasing competitive dynamics in the market.
I note that the Central Bank's statistical release of 11th December 2015 stated that mortgage interest rates generally declined during the third quarter of 2015. Variable Principal Dwelling House (PDH) rates declined by 17 basis points over the second quarter with corresponding Buy-to-Let (BTL) rates falling by 14 basis points during the same period.
The most recent statistics are available here: http://www.centralbank.ie/polstats/stats/cmab/Documents/2015m10_ie_retail_interest_rate_statistics.pdf.
114. Deputy Michael McGrath asked the Minister for Finance the number of staff at the National Treasury Management Agency, excluding the National Asset Management Agency, who received pay in 2015, including retention payments and other benefits, of €100,000 to €150,000, €150,001 to €200,00, €200,001 to €250,000, €250,001 to €300,000, €300,001 to €350,000, €350,001 to €400,000 and in excess of €400,000; the number employed by the National Treasury Management Agency at the end of 2014 and at the end of 2015; and if he will make a statement on the matter. [1820/16]
Amharc ar fhreagraThe table below shows the number of NTMA staff (excluding those assigned to NAMA) by relevant band. The table shows the number of staff falling within the bands on the basis of their base salary and/or their total remuneration. The figures are inclusive of staff who left the NTMA during 2015.
NTMA excluding NAMA
|
Relevant Band |
Salary |
Remuneration 1 |
|
€100,001 - €150,000 |
60 |
72 |
|
€150,001 - €200,000 |
30 |
27 |
|
€200,001 - €250,000 |
3 |
6 |
|
€250,001 - €300,000 |
5 |
4 |
|
€300,001 - €350,000 |
3 |
6 |
|
€350,001 - €400,000 |
0 |
1 |
|
In excess of €400,000 |
1 |
1 |
|
Total |
102 |
117 |
1. Note: Remuneration is salary and any taxable benefits (including retention payments) if any. The inclusion of taxable benefits may move individuals into the next relevant band.
The headcount of the National Treasury Management Agency (NTMA) excluding staff assigned to the National Asset Management Agency (NAMA) is set out in the table below.
|
Year |
Headcount as at year end |
|
2014 |
390 |
|
2015 |
440 |
115. Deputy Michael McGrath asked the Minister for Finance the number of staff at the National Asset Management Agency who received pay in 2015 of €100,000 to €150,000, €150,001 to €200,00, €200,001 to €250,000, €250,001 to €300,000, €300,001 to €350,000, €350,001 to €400,000, and in excess of €400,000; and the numbers employed by the agency at the end of 2014 and at the end of 2015; and if he will make a statement on the matter. [1821/16]
Amharc ar fhreagraAll staff in the National Asset Management Agency are employed by the NTMA, and assigned to NAMA under Section 42 of the NAMA Act 2009. The number of staff assigned to NAMA at the end of 2014 and 2015 are set out in the table below.
|
Year |
Headcount as at year end |
|
2014 |
369 |
|
2015 |
341 |
The table below shows the number of NAMA Officers by relevant band. The numbers include NAMA Officers who left the NAMA during 2015 in addition to those employed at the end of the year. Therefore the table shows the base salary and/or remuneration at year end and the base salary and/or remuneration upon leaving employment for all staff who received pay of €100,001 or more in 2015. Staff members who were approved for voluntary redundancy in late 2015 are included in the 2015 headcount.
NAMA
|
Relevant Bands |
Salary |
Remuneration 1 |
|
€100,001 - €150,000 |
98 |
97 |
|
€150,001 - €200,000 |
17 |
17 |
|
€200,001 - €250,000 |
3 |
4 |
|
€250,001 - €300,000 |
2 |
3 |
|
€300,001 - €350,000 |
0 |
0 |
|
€350,001 - €400,000 |
1 |
0 |
|
In excess of €400,000 |
0 |
1 |
|
Total |
121 |
122 |
Note:
Remuneration includes salary and taxable benefits if any. The inclusion of taxable benefits may move individuals into the next relevant band. The difference in total staff numbers in the table is due to one person who was on or below a salary of €100,000 earning over €100,001 in total remuneration when their taxable benefit was added.
116. Deputy Michael McGrath asked the Minister for Finance the number of staff at the National Asset Management Agency who took voluntary redundancy in 2015; the total amount paid to these staff in 2015; the five highest amounts paid to those who departed and the departments within the agency from which they exited; and if he will make a statement on the matter. [1822/16]
Amharc ar fhreagraI am advised that 50 members of staff assigned to NAMA were approved for voluntary redundancy in late 2015. No payments have yet been made but the redundancy and retention payments due to the departing staff aggregate to gross before tax of €2.1m, of which €1.3m comprises redundancy payments and €0.8m comprises retention payments.
I do not propose to provide a breakdown of payments by NAMA division or the five highest amounts paid as that would potentially identify the salaries and redundancy/retention amounts paid to particular individuals. However, I am advised that the individual redundancy/retention gross payments ranged from €12,751 to €95,791, with an average payment of c.€42,000, and that the average of the five highest redundancy/retention gross payments was €82,850.
As set out in response to Dáil Question 90 of 24 September 2015, the redundancy element is in keeping with established public sector norms; that is, two weeks statutory pay per year of service, capped at €600 per week, plus three additional weeks of base salary per year of service with an overall cap of two years base salary. NAMA have advised that the redundancy payments referenced above have been made in line with these public sector norms.
NAMA also have advised that the retention portion of the scheme is being implemented in line with the stipulated parameters which I agreed with the NAMA Chairman in March 2015 regarding the quantum of any payment under the scheme, the timing of any such payment, and employee eligibility under the scheme to ensure that it served the underlying objective of helping to safeguard NAMA's performance in line with an orderly wind-down plan.
117. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which he expects to define the appropriate response to the continued flooding since the beginning of the winter, whether by way of a comprehensive arterial drainage programme incorporating all forms of drainage, with particular reference to areas that have not received any such attention for many years or ever, in conjunction with flood defence measures, thereby maximising the economic benefit of the appropriate response; and if he will make a statement on the matter. [1807/16]
Amharc ar fhreagra118. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the overall approach to flood risk management here; how this is to be progressed, identifying the most appropriate flood alleviation methods for a particular area, such as river drainage, and ensuring that we, as a country, spend efficiently and get value for money in addressing specific concerns; and if he will make a statement on the matter. [1808/16]
Amharc ar fhreagraI propose to take Questions Nos. 117 and 118 together.
Local flooding issues are, in the first instance, a matter for each local authority to investigate and address. They may carry out flood alleviation works from their own resources or apply to the Office of Public Works (OPW) for funding under the Minor Flood Mitigation Works and Coastal Protection Scheme. This purpose of this scheme is to provide funding to local authorities to undertake minor flood mitigation works or studies to address localised flooding and coastal protection problems within their administrative areas. The scheme generally applies to relatively straightforward cases where a solution can be readily identified and achieved in a short time frame. Any application received will be considered in accordance with the scheme eligibility criteria, which comprise economic, social and environmental criteria including a requirement that any measures are cost beneficial, and having regard to the overall availability of resources for flood risk management.
The core strategy for addressing areas at potentially significant risk from flooding, is the OPW's Catchment Flood Risk Assessment and Management (CFRAM) Programme. The Programme is focussing on 300 Areas for Further Assessment (AFAs) including 90 coastal areas, mainly in urban locations nationwide, identified as being at potentially significant risk of flooding. It is the principal vehicle for implementing the EU Floods Directive and national flood policy.
The Programme, which is being undertaken by engineering consultants on behalf of the OPW working in partnership with the local authorities, involves the production of predictive flood mapping for each location, the development of preliminary flood risk management options and the production of flood risk management plans.
Good progress is being made on the CFRAM Programme, the draft mapping is now being finalised following completion of the national statutory public consultation on 23rd December, 2015. Work on the development of preliminary options to address flood risk is underway. Following finalisation of the mapping and the identification of flood risk management options, the final output from this important project will be integrated Flood Risk Management Plans containing specific measures to address in a comprehensive and sustainable way the significant flood risks identified. The Plans, which are scheduled for completion by the end of 2016, will include a prioritised list of measures, both structural and non-structural, to address flood risk in an environmentally sustainable and cost effective manner. Further information on the Programme is available on www.cfram.ie.
The Government recently announced increased levels of investment in the area of flood relief as part of the overall Capital Investment Plan 2016-2021 and this investment programme will allow for the implementation of the Flood Risk Management Plans.
119. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which the Morrell River drainage scheme remains a priority, with particular reference to the need arising from flooding over Christmas 2015; and if he will make a statement on the matter. [1812/16]
Amharc ar fhreagraKildare County Council (KCC), in consultation with the Office of Public Works (OPW), engaged consulting engineers to carry out a Full Feasibility Study, Cost Benefit Analysis (CBA), and Environmental Impact Statement (EIS) on the Lower Morrell River and the surrounding River Catchment in order to resolve the outstanding localised flooding issues in the Straffan area. A Steering Group which comprises representatives of KCC, OPW and the consultants, was set up to advance the project.
KCC and their consultants submitted a Draft Options Report/Feasibility Study to OPW outlining possible flood relief measures for the Lower Morrell River Catchment in 2014. Following consideration of the draft report by the OPW, it was agreed by the Steering Group that the consultants would carry out a more detailed review of the proposed scheme with further analysis of the various options considered to assess the benefits of the current works proposals as they have evolved. The review would also investigate if there are additional or alternative and more cost effective measures that can be put in place to alleviate flooding in the area. Any changes identified by the review process would need to be incorporated into the Cost Benefit Analysis and Environmental Impact Statement before the scheme can be advanced.
I am advised that the consultants have completed the review process and KCC has submitted their findings to the OPW for consideration. It is envisaged that OPW and KCC will meet later this month with a view to finalising the Feasibility Report. Once the Feasibility Report has been finalised, and provided the scheme is still economically and environmentally viable, KCC and the OPW will decide on how best to advance the proposed works. I can confirm that the Lower Morrell scheme remains a priority and the OPW has included provision for the cost of the proposed works in its financial profiles in the period up to 2018.
In relation to the most recent flood events of late December 2015 and early January 2016, I am advised that KCC is preparing a report on the impacts of these events on the Morrell River Catchment with particular emphasis on the effects of the flooding for property owners in the Killeenmore and Turnings area.
