Dáil Éireann Debate, Wednesday - 10 April 2024
7. Deputy Pearse Doherty asked the Minister for Finance for an update regarding the issue of mortgageability as it relates to homeowners affected by defective concrete blocks, including his Department's engagement with the Department of Finance and the proposal of bridging finance products by the banking sector under the enhanced defective concrete block scheme; and if he will make a statement on the matter. [15231/24]
Amharc ar fhreagraI raise again the serious, pressing and critical issue of homeowners affected by the defective concrete block crisis in my own county and elsewhere. The Minister and his Department are centrally involved with this and have responsibility for key issues, including the issue of future mortgageability of remediated homes. I ask the Minister again to update the Dáil on his engagement with the banking sector, with his Department and with the Department of housing on this critical issue. I attended a meeting where 1,300 people came out to voice their anger that this scheme is not working. They are very annoyed because it seems that the Department of housing and the Minister's colleague, the Minister for housing, are stopping this proposal from the banks.
I thank Deputy Doherty for raising this issue again.
As the Deputy will be aware, the overall Government response on the problems associated with defective concrete blocks is being led by my colleague, the Minister for housing. His Department is engaging with impacted householders and relevant stakeholders and has put in place a scheme of financial support to help affected homeowners.
On the issue of bridging finance products, I understand that some homeowners have identified a potential challenge with funding the commencement of remediation works in circumstances where it is necessary to make a payment to professionals engaged on a remediation project prior to receipt of the first grant payment. Banking and Payments Federation Ireland, BPFI, submitted an interim funding proposal to the Department of housing to address this timing mismatch. BPFI proposes that funding would be provided upfront from a BPFI member to a homeowner on the commencement of remediation works. It is proposed that this funding would subsequently be repaid to the BPFI member on the release of the approved grant payment, subject to the remediation work meeting all of the requirements of the scheme.
Last year, I asked my officials to engage with BPFI and with officials in the Department of housing to support that Department in exploring the funding mechanism proposal. There has been ongoing engagement since that time, which has also involved discussion with BPFI on the potential operation of the scheme, including the level of State guarantee required by BPFI members and whether alternative approaches may be feasible.
In order to implement the proposed funding mechanism, BPFI has advised that a State guarantee would be required. To support the Department of housing in its consideration of the BPFI funding proposal, officials from my Department examined the implications of such a guarantee from both a State balance sheet and legislative perspective confirming that, under public financial procedures, all State guarantees must have a statutory basis. My officials continue to engage with the Department of housing and with BPFI to respond to any matters relating to the funding proposal. I will respond further in a moment.
This is only one part of the problem. As I said, this scheme was introduced and announced by the Government in November 2021. It is now 2024 and there are 1,300 people coming up to Inishowen to say it is not working for them. We had people telling us that they were demolishing their homes and it would cost them €100,000 out of their own pocket to rebuild them because the scheme is not fit for purpose. Many others in the room could not even do that because they did not have the ability to borrow that level of money. Five hundred people turned up in Mayo at the meeting.
It is over six months since BPFI put a proposal together to help only a number of these families in terms of bridging loan. Zero per cent bridging finance is the proposal to the Department of housing. Six months later, we still have not been able to get over this hurdle. It is ridiculous.
In the middle of all of this - I am conscious I am talking about proposals and the Minister will get up to say that the Department will need to do this and that and all the rest, and all these checks and balances have to be done - the people I was talking to in Inishowen are people who have got mental health problems. People are no longer with us today because they took their own lives as a result of issues regarding defective blocks. This is not only about crumbling homes; this is about crumbling families and mental health crumbling right before our eyes. It is shameful that there has not been a result in relation to this proposal, one way or another.
There is no reason banks today cannot step in and provide bridging finance to the homeowners concerned.
The Ministers, Deputies McConalogue and Darragh O'Brien, and I have discussed this issue again in recent days. As Deputy Doherty knows, the issue with a State guarantee is that it will require legislation and there are potential state-aid issues so I want to find a faster way of getting this resolved. There is no barrier preventing banks from stepping in and providing bridging finance to the homeowners concerned, other than their own commercial decisions. The State has legislated. We have put a scheme in place. The scheme is open. The funding is available. We want it to be drawn down. My officials will continue to work with the Department of Housing, Local Government and Heritage. I am entitled to make the point that there is no inhibition to prevent lending decisions being made to provide bridging finance today. The State is good for its money. The State is going to provide the remediation funding to the households and therefore the banks will be repaid on that basis.
To be clear, what the banks are proposing here is 0% loans to those with affected homes. They are going to provide this to non-bank customers - people who do not have accounts, borrowings or mortgages with them. This is for everybody. The easiest way for this to happen is actually for the Department itself to do it. Instead of having to go through the bank, the Department should provide this money upfront. The Minister's officials suggested that to the Department of Housing, Local Government and Heritage. When the Department of Finance received these documents, the Minister's officials wrote back and asked why the Department does not just up the money at the start instead of having to go through a middle person in terms of the finance. The point I make is that it is six months on and all the families are still left in limbo. We have papers moving from the Minister for Finance to the Minister for Housing, Local Government and Heritage, from one Department to the other and on to the BPFI and in the middle of all of this we have families in distress, who are crushed. Even if we get over this hurdle, the person I talked about who had to put their hand in their pocket and find €100,000 will still have to do this. This is just a tiny issue that will help a few people-----
I thank the Deputy.
-----and we cannot even get over that hurdle.
I thank the Deputy.
I will finish on this point.
No, the Deputy is over time. He should please respect the time.
Months ago I pleaded with the Minister and asked him to inject momentum into this issue. Unfortunately, I do not see that from him.
I want to find a way of getting progress for the homeowners as quickly as possible. I know the Minister, Deputy Darragh O'Brien, and the Department of Housing, Local Government and Heritage are examining the very issue Deputy Doherty raises about the nature of the payments and the early payments, the speed of them and so on. We could go down the road of a State guarantee and all that comes with that - legislation, potential state aid issues and examination. Like Deputy Doherty, I want speed of execution. I want to help the homeowners to draw down the money and begin to rebuild their lives as well as their homes.
Deputy Doherty is far closer to this than I because of geography and he represents these families. I can only imagine the trauma they are going through. I assure him that discussions are actively ongoing with a view to finding the best way of addressing this issue. For me, speed is one of the criteria that should decide what we do.
