Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

I thank the witnesses for their presentations. I have a few questions and a comment that will put the questions in context. One thing to which many members of this committee are trying to find a solution is that while we have a huge and growing housing need for families at the lower end of the income spectrum in particular, at the same time local authorities have been starved of resources, be it capital or the ability to borrow, to provide these houses. The private sector has stated it either cannot or will not build for a variety of reasons, but at the same time, it is cheaper to build and to buy and private finance is cheaper for whoever is borrowing. Members are trying to find ways to get the finance that is available to the organisations that are best placed to build those houses, which in the view of many members are local authorities and, to a certain extent, approved housing bodies, to provide the units on a scale far in excess of what has been discussed up to now by the Government. This is one discussion members have had and I will ask my questions with that in mind.

The questions are for both the Department and the National Treasury Management Agency, NTMA, and the first pertains to general issues regarding borrowing restrictions. I state this noting clearly the witnesses' caution regarding additional borrowing and I am ascertaining whether there is a way to answer this question in that context. On the one hand, our debt-to-GDP ratio is declining as a result of growth in the economy although the absolute level of debt clearly is very high. Within the fiscal rules and in particular within the debt reduction rules that are required, is there a kind of debt space, to coin a phrase, between the reduction as a percentage of GDP and what is required under the fiscal rules that gives the Government some additional borrowing room it could take up while still remaining within the fiscal rules? Clearly the witnesses would advise the Government not to take it up because of the absolute level of debt, but if there is such a debt space, the witnesses should map that out for a couple of years on the basis of the Government's projections. This may be more of a question to Mr. Dorgan but I do not understand fully the interaction between the debt reduction requirement under the fiscal treaty and the EU regulations and the expenditure benchmark. Even if there were some additional borrowing room within the EU fiscal rules, how would that then affect the expenditure benchmark as it is set out? Mr. Dorgan should try to explain this because some members of the committee seek to ascertain whether there is additional room, either in borrowing or spending, that could be directed either on or off-balance sheet for the provision of social housing by local authorities. That is the first question.

Second, does the NTMA know why it is being suggested that commencement of the public private partnerships, PPPs, under the National Development Finance Agency, NDFA, will be in 2019 or 2020? If so, can Mr. O'Kelly explain this because I thought it would be earlier. As for the off-balance sheet stuff, are the witnesses referring to an expanded role for National Asset Residential Property Services Limited, NARPS, or to another vehicle? If they are referring to NARPS, my understanding regarding the properties the approved housing bodies currently are leasing through NARPS is that at the end of the lease term, they will not be the property of the approved housing bodies but will be the property of either NARPS or the original owner. The witnesses should clarify this and tell me whether it would be possible to use that vehicle and to have a lease-to-buy option whereby at the end of a 25-year lease, the assets would transfer over to the local authority or the approved housing body.

I have two final questions. The first concerns the Irish League of Credit Unions whose representatives came here to discuss their proposals in the context of the Government's social housing strategy 2020, NARPS and the possibility of additional loan finance. Although they were very diplomatic, they seemed to indicate that there was a triangle of interest between themselves, the Department of the Environment, Community and Local Government and the Department of Finance and Central Bank. Does the Department of Finance think that is another viable potential option for lower interest financing, whether for approved housing bodies or local authorities?

People keep talking about off-balance sheet, but EUROSTAT has already ruled unfavourably on the first significant off-balance sheet attempt by Government, which is Irish Water. It is not just on water charges because there were governance and other issues in that EUROSTAT judgment. On 4 March 2016, EUROSTAT issued a clarification with a new note on PPPs. It talked about retrospectively ruling out certain bodies that may currently be off-balance sheet, but may be put on if they change their operations. In terms of the conversations around NARPS in the programme for Government, will we encounter greater difficulties in keeping such a vehicle off-balance sheet if it starts to provide greater levels of essentially circuitous funding for social housing off-balance sheet?