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 Header Item Social and Affordable Housing (Continued)
 Header Item Local Authority Rates

Wednesday, 11 December 2019

Dáil Éireann Debate
Vol. 991 No. 2

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(Speaker Continuing)

[Deputy Darragh O'Brien: Information on Darragh O'Brien Zoom on Darragh O'Brien] It does not make any sense to me that the Department wants to have absolute control over anything above that. One of the concerns raised in some information we got from the Department is based on the belief that it would lose control of approximately 44% of the housing budget. I do not think that is the case. It is not a question of letting local authorities just go off and do it and that there would be no oversight. We need to find a mechanism to deliver building of social houses quicker. This was agreed in the discussions on the recent budget and the one prior to that, yet the Minister has told me this morning that the recommendation is that there would be no change. Is that a Government decision or is it a recommendation?

Deputy Eoghan Murphy: Information on Eoghan Murphy Zoom on Eoghan Murphy I thank the Deputy for his follow-up question. To be clear, in the meetings the Minister for Finance, Deputy Donohoe, and I attended, our understanding was that there was an agreement to look at reviewing the public spending code to see if we could. The review has been completed and it was discussed by the Government yesterday.

Deputy Darragh O'Brien: Information on Darragh O'Brien Zoom on Darragh O'Brien I was just checking.

Deputy Eoghan Murphy: Information on Eoghan Murphy Zoom on Eoghan Murphy That is a coincidence, but it is helpful that it was concluded yesterday so I can answer him today in this way. The Minister, Deputy Donohoe, will make an address on this matter later this morning. It is pertinent to the next question tabled by Deputy O'Brien as well in terms of the cost-evaluation programmes.

Local authorities do not want this and the proof is in the fact that 280 projects could have gone through the first stage of the approvals process but only 45 did. They prefer the four-stage process. We have streamlined the four-stage process down to 59 weeks but now local authorities such as Wicklow County Council are getting it down to 44 weeks. We will continue to streamline the process and to improve and reform it. Among the things that we have done is an internal specification for local authority housing that can be taken off the shelf by local authorities, but also an internal specification not for the facade or front of the home but for the actual layout. If one is going to build 30 homes or 20 homes plus step-down facilities or elderly housing, there are now external layout specifications that can be taken off the shelf by local authorities to help them drive things more quickly. We are moving the housing delivery office into the County and City Management Association, CCMA, which is another important reform that will put the delivery of social housing at the centre of local government again.

Deputy Darragh O'Brien: Information on Darragh O'Brien Zoom on Darragh O'Brien I thank the Minister for his response. The reason we have been pushing for this is to try to deliver projects quicker. I welcome the streamlining in the process which is something we have called for as well in relation to design. When all of that is pulled together it would be worth bringing it to the Joint Committee on Housing, Planning and Local Government, potentially tomorrow. I do not know whether the Minister is ready to provide an update on Rebuilding Ireland.

It is not true to say that local authorities do not want this; there is a particular reason for that. It is because of the liabilities that may be foisted upon them. The only reason is the financial stick that is hanging over them. I believe many local authorities would be in a position to deliver projects quicker if they were allowed to do it themselves with oversight from the Department. The sum of €6 million was a mid-point. We would go further, namely, to €10 million, in particular in local authorities' that have large housing waiting lists. We are looking at more than 130,000 people currently. If we keep building at the current rate, we are not going to keep up with the demand and we will not start eating into those lists. I am talking about building social houses, not buying existing built stock. We must get back into building and building quicker and delivering quicker.

Deputy Eoghan Murphy: Information on Eoghan Murphy Zoom on Eoghan Murphy We are getting back to building social housing. Next year we will build more homes for social housing than were built in any of the past 20 years, including any of the boom years. That is very important. We can do that because of the work that we did in the initial stages of Rebuilding Ireland and it is because of the reforms that we continue to make to the approval process that we can do that more quickly.

If Deputy O'Brien were to put himself in my shoes and look at a recent project such as the children's hospital, which his party and others criticised in terms of cost overruns, he would not then, on reflection, want to lose even more oversight of cost controls in his Department by doing something that would seem to be both risky in terms of capital delivery but also might even lead to further delays if projects came forward that he could not stand over in terms of value for money. For example, one local authority could come forward with plans to build apartments at a unit cost of at least €500,000 if not €600,000. We would only see more of that if we increased the thresholds. Again, the four-stage process has been streamlined down to 59 weeks and it is down to 44 weeks in some local authorities. The person who has driven that in Wicklow is the chair of the housing committee in the CCMA. We are now putting the housing delivery office into the CCMA so we are going to see those improvements in other local authorities. I will see if I can provide the documents to the Oireachtas joint committee this afternoon.

Deputy Darragh O'Brien: Information on Darragh O'Brien Zoom on Darragh O'Brien Or if not, then the following one.

Deputy Eoghan Murphy: Information on Eoghan Murphy Zoom on Eoghan Murphy Yes, perhaps the following one. That would be helpful. I thank Deputy O'Brien.

Local Authority Rates

 37. Deputy Eoin Ó Broin Information on Eoin Ó Broin Zoom on Eoin Ó Broin asked the Minister for Housing, Planning and Local Government Information on Eoghan Murphy Zoom on Eoghan Murphy the engagement he has had with the eight local authorities that have seen a combined loss of revenue of €20.9 million arising from the revaluation of commercial rates to Irish Water; and if additional funding will be provided from within his Department to mitigate the loss of the revenue to the councils. [52148/19]

Deputy Eoin Ó Broin: Information on Eoin Ó Broin Zoom on Eoin Ó Broin As the Minister is aware, the recalculation of the Irish Water rates compensation for local authorities has resulted in eight local authorities losing a significant amount of revenue for this year. Among others, Dublin City Council has lost almost €9 million, my own local authority area of South Dublin County Council has lost more than €4 million and Waterford City and County Council has lost €3.5 million. Could the Minister outline the rationale behind the revaluation and reassessment of the compensation but also tell us what contact he has had with the local authorities in question to try to address this issue so that the cuts do not result in a loss of services?

Minister of State at the Department of Housing, Planning and Local Government (Deputy John Paul Phelan): Information on John Paul Phelan Zoom on John Paul Phelan I thank Deputy Ó Broin for his very pertinent question. In the past four years, since 2015, the revenue of local authorities has increased by 25%, from €4 billion to €5 billion. I suspect it is a much bigger figure than is widely known. This mainly comprises income from goods and services, commercial rates, Government grants and local property tax.

Between 2015 and 2019, Irish Water was not liable for commercial rates and approximately €47 million per annum was paid to local authorities to compensate them for the water services-related rates income they would have previously received. The local government sector itself, through the CCMA, then sought to have Irish Water globally valued and that process finished recently. Having regard to a recommendation from that sector that the exemption be removed, commercial rates will be imposed instead of the compensation that existed since 2015. Irish Water will pay commercial rates directly to individual local authorities, following the global valuation process undertaken by the Commissioner of Valuation, in a similar arrangement as applies to other utilities. The majority of local authorities will see an increase in their rates income arising from this process.

Of course, this is just one of a number of variables that feed into local authority budgets. For example, there have also been revaluations of other utilities and all of the local authorities likely to lose rates income from the Irish Water valuation would be likely to see their rates income increase from the ESB revaluation. In addition, funding is made available from the Local Government Fund, LGF, and Exchequer funding of €156 million, which is being made available through the LGF on a like-for-like basis, will see local authorities receive €23 million more in Exchequer funding in 2020 when compared to 2019.

The Department has kept the anticipated financial impact of the changed approach to the rating of Irish Water under review. Senior officials have liaised directly with sectoral representatives, including in the most impacted authorities, some of which the Deputy has referred to. Taking account of other expected changes in incomes and the financial positions, Waterford City and County Council and Wicklow County Council were identified as facing significant challenges and did not have other sources of income to offset the loss. For that reason the Minister, Deputy Eoghan Murphy and I agreed to a once-off compensatory payment in both of those cases.

Deputy Eoin Ó Broin: Information on Eoin Ó Broin Zoom on Eoin Ó Broin I thank the Minister of State for his response and the clarification. I accept that the valuation process is fully independent and the consequences for the local authorities arise from that. What contacts have there been between the Minister of State and all of the eight local authorities that are going to experience a significant loss of revenue arising from the revaluation?

Could the Minister of State provide more information in terms of the once-off compensatory payment for the two local authorities? To put this in context, if one looks at Dublin City Council, for example, it has lost almost half of what would have been the compensation fund of €14 million previously only to get €5 million now. South Dublin County Council is losing two thirds of what it had received. It is losing €4 million and it will only get €2 million of what was previously €6 million. The neighbouring local authority of the Minister of State, Waterford City and County Council, is losing €3.5 million, which is a significant loss of revenue for a relatively small local authority with a low rates base and income source. Could the Minister of State provide more detail in terms of his contacts with all eight local authorities and more information about the once-off compensatory payments to the two local authorities he mentioned?

Deputy John Paul Phelan: Information on John Paul Phelan Zoom on John Paul Phelan Most of the contact was with Waterford City and County Council. In fact, there was even a delegation from the councils last week on which Deputy Ó Broin's party and mine were represented. The other councils did have contact with the Department. In light of recent decisions by Dublin City Council to back a white-water rafting initiative on the quays, it was felt that the authority and some of the other Dublin local authorities had the financial wherewithal to be able to cope with the changes. The reality of the global revaluation of Irish Water is that there is a strong argument to be made that the compensatory system was over compensating the four Dublin local authorities, Waterford City and County Council, Wicklow County Council and Kildare County Council prior to the new valuations base.

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