Alan Kelly (Tipperary North, Labour) | Oireachtas source

I thank the Chairman and sub-committee members. I welcome the opportunity to discuss with the sub-committee my Department’s Revised Estimate for 2015. I am accompanied by the Ministers of State, Deputy Ann Phelan and Deputy Paudie Coffey. To assist in the work today, we have prepared briefing on the Department’s Vote for 2015 which sets out details of the Vote and related funds as well as other key information.

Budget 2015 marks the end of an era of budgetary austerity. That the Government is in a position to increase expenditure in 2015 reasonably indicates the progress we have made following expenditure reductions over the past six years to address the perilous financial situation we inherited on coming into office. As a Government, we have never believed in austerity for austerity’s sake. What was done was done because we were left with very little choice. I am very pleased, therefore, that the hard-won flexibility we have to meet emerging demands and invest in our public services following the greatest economic crisis in our history has very immediate and positive impacts on the Vote before the sub-committee. The provision of €1.3 billion being made available to the Department for 2015 is firm evidence of the Government’s commitment to the sector. It is made up of more than €800 million in current spending and almost €500 million in capital investment and represents an increase of €460 million on the 2014 Estimate. Department programmes will also benefit in 2015 from resources available from both the local government and environment funds.

The year 2015 will see a very significant level of new investment in housing across a range of measures which will increase the supply of homes to be made available. The overall provision for housing has increased by €230 million, with capital funding increased significantly by €180 million. This will result in an investment of €800 million across a range of programmes. This investment will allow for significant expansion in social housing provision, with more than 7,400 new homes to be provided under a range of social housing initiatives in 2015. Combined with a target of more than 8,000 transfers from rent supplement to housing assistance payment, HAP, almost 16,000 housing units will be delivered this year.

Social housing is a top priority for the Government and this is evidenced by the additional €2.2 billion in funding announced for social housing in budget 2015 to support the implementation of the Social Housing Strategy 2020. The Government is committed to dealing comprehensively with the housing list through a wide range of measures, including a comprehensive return to mainstream local authority builds. The total targeted provision of more than 110,000 social housing units, through the delivery of 35,000 new social housing units and meeting the housing needs of 75,000 households through HAP and the rental accommodation scheme, will address in full the needs of the 90,000 households on the waiting list, with flexibility to meet potential future demand. In committing to provide these 35,000 new social housing units, at a projected cost of €3.8 billion, the strategy marks a fresh start for social housing that was badly needed.

The local government fund has undergone significant change in recent years. While motor tax continues to be paid into the fund, local property tax, LPT, collected by the Revenue Commissioners is now also coming into the fund. This year sees the ending of the general purpose grant payments and the introduction of LPT being paid to local authorities through the fund. A total of 80% of LPT will be retained locally to fund vital public services. The remaining 20% will be redistributed to provide top-up funding to local authorities that have lower property tax bases due to the variance in property values throughout the State. These measures are necessary to create a balanced system of funding across local authorities. The Government has devolved more powers to local authorities by giving elected members discretion to vary the rates of LPT by up to 15%. This allows for greater transparency and accountability at a local level. Fourteen local authorities lowered their basic LPT rate for 2015. The income sources available to the local government fund this year are estimated to be motor tax of €1.167 billion, LPT of €440 million and a payment from the Exchequer of €233 million. My Department will make payments estimated at €1.839 billion from the fund in 2015, including LPT payments to local authorities of €459 million, payment of €364 million for the maintenance of non-national roads to the Department of Transport, Tourism and Sport, and a payment to the Exchequer of up to €484 million.

The transfer of water services responsibilities from local authorities to Irish Water took place on 1 January 2014. This major reform will drive improvements in water services in the coming years and decades. Irish Water published its capital investment plan for 2014 to 2016 last May. A total of €222 million has been provided by the Government to Irish Water in respect of its capital expenditure in 2015. This will fund progress on projects set out in the plan, including key water and waste water infrastructural projects. In addition, €399 million from the local government fund will be provided to Irish Water in 2015 in respect of operational subvention. This will fund the allowance of 21,000 litres of free water that is being provided to all children in the State along with the cost of capping domestic water charges at the levels set out in the Water Services Act 2014.

The 2015 Estimate for my Department also contains an allocation of €130 million for the new water conservation grant which I announced last November. To promote sustainable use of water and to enhance water conservation in households, the Department of Social Protection will administer, on behalf of my Department, a €100 water conservation grant in respect of principal private residences. The allocation of €130 million is based on an estimate of up to 1.3 million households applying for the grant. This estimated level of demand for 2015 takes account of the number of primary residences recorded in the 2011 census as well as experiences with other similar demand-led schemes.

My Department, in consultation with the Department of Social Protection, is finalising the modalities of the water conservation grant. Following this, I will make regulations which will provide for the terms and conditions attaching to the grant, including the date by which households will need to have responded to the Irish Water campaign if they are to be eligible for the grant. All households registered with Irish Water under its application campaign will be contacted directly by the Department of Social Protection in due course.

The Government remains committed to supporting the group water sector as an important element of the water industry in Ireland. This is reflected in the provision of €17.5 million in 2015 for my Department’s rural water programme, under which funding is provided for group water schemes.

In environment and waste management, the programme provides for expenditure of €35 million, largely to meet the cost of the important work of the Environmental Protection Agency, including the work of the former Radiological Protection Institute of Ireland which was merged successfully with the agency in 2014. The environment fund, financed from the landfill and plastic bag levies, will provide a further estimated €45 million to be directed to key priority areas such as environmental enforcement, waste prevention and recycling.

In community and rural development, the Leader elements of the rural development programmes provide for voted expenditure of €45 million in 2015. A total of €30 million of this is to meet the outstanding commitments under the 2007-2013 programme, which has been very successful, with more than 9,000 projects receiving funding. Indeed, financial support has been provided to more than 8,000 enterprises and more than 4,000 full time jobs have been created. In addition, €15 million has been provided for the new 2014-2020 Leader programme which I expect to be operational this year.

This programme will build on the previous programme’s success in creating new and innovative opportunities for rural businesses and communities.

The Vote also provides funding for the local and community development programme, LCDP, which will conclude later this month and for its successor, the social and community activation programme, SICAP, which will be rolled out from April. SICAP takes account of the new aligned structure in its delivery and objectives. In particular, SICAP will be managed and implemented through the new local community development committees, LCDC, as the new governance model for local and community programmes in each local authority area. The allocation of over €45 million for 2015, to cover the funding requirements of both programmes, LCDP and SICAP, will allow further progress to be made in this vital area.

Chairman, members, 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 very significant resources we will deploy in support of them in 2015, will benefit communities and citizens throughout the country, make the maximum contribution to job creation and economic recovery, and help the less well-off in our society.

I look forward to hearing members' thoughts and contributions. The Ministers of State, Deputy Paudie Coffey and Deputy Ann Phelan, and I will be happy to deal with matters that members wish to raise.