Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I congratulate the Chairman on her appointment. I hope and think it will be a very busy committee. We have made no secret of the fact that housing is a major priority if not the biggest priority for Government and we want to work with everyone on the committee to solve the multilayered and complex problems around housing. A number of members of this committee were also members of the Committee on Housing and Homelessness which was established to prepare a report and make recommendations on an all-party consensus around the approach we should take to housing. We will be producing, in a few weeks, our own Government response to the report and to the housing challenges we face. I look forward to coming back to tease through the detail of that. It may also be an opportunity to talk about the all-party committee's report.

I am conscious of the fact that the annual Estimates process is an opportunity not only to talk through the figures but also some of the policy behind them. Essentially, however, this is about financial decisions which were taken six months ago. There are some revisions because of changes in the structures of the Department and some issues around water, which I want to go through in some detail. Obviously, we can go through the Estimate section by section and I will try to be as open as I can in terms of the answers. I welcome my colleague, Deputy Damien English, who is working with me on all areas in the Department and who is also here to answer questions. We also have all of the key experts in the Department with us from the Secretary General down. If people have technical questions to which I do not have the answers, we will get input from those experts.

I would like to get an opportunity at some point in today's proceedings to raise the issue of the water legislation we need to pass. We are, in effect, suspending water charges from tomorrow and the legislation to address that must be facilitated through the system as quickly as possible. It is a short Bill. I will introduce two fairly straightforward amendments on Committee Stage, the detail of which I have already signalled and the purpose of which is to provide more clarity. We have been in contact with the committee with a view to scheduling Committee Stage next week. I appeal to the members to facilitate that earlier if possible. It is not going to be a long Committee Stage, although that will be up to the members. People will want time to put amendments together, but this is a Bill that was drafted in exceptional circumstances and, as such, I would appreciate other parties and the committee facilitating the debate on it as early as possible next week.

I welcome the opportunity to discuss my Department's Revised Estimate for 2016, which is based on the Estimate published last December. It sets out my Department’s budget as a gross total of €1.425 billion. This represents a gross reduction of €67.219 million on the Estimates published last December and reflects the transfer of rural development functions from my Department to the restructured Department of Arts, Heritage and the Gaeltacht. The latter, which is to be renamed the Department of Rural Development, Rural Affairs, Arts and the Gaeltacht, has been assigned responsibility for the Leader programme, an expanded town and village renewal scheme, the Tidy Towns scheme, the Western Development Commission, the implementation of the report of the Commission on the Economic Development of Rural Areas, the Dormant Accounts Fund and social enterprise. Members will be aware that responsibility for the environment, including climate change, will also transfer to the Department of Communications, Energy and Natural Resources which, again, will be renamed to reflect the transfer of functions. The transfer of these functions has not formally been completed and, therefore, the environment programmes continue to be reflected in my Department's Estimate, which will change in the next month.

The amended Estimate also reflects a reclassification of the water conservation grant. This amendment is a result of the proposed suspension of water charges. An amount of €110 million was originally provided in 2016 for the purposes of meeting demand under the water conservation grant. With the proposed suspension of water charges and the discontinuance of the grant it is proposed to realign the funding and apply €109.7 million to supplement the subhead D3 payment to the local government fund. This will enable the fund to meet a portion of the loss of revenue to Irish Water as a result of the decision to suspend water charges and cover the costs of readjustment to the financial supports for the group water sector. A sum of €300,000 is being retained in the water conservation grant subhead to cover nominal administration costs that will arise in 2016.

As I have previously stated, housing is an absolute priority for this Government and that is clearly evidenced by the range of commitments which are set out in the programme for a partnership Government. As the Minister with specific responsibility for housing, planning and local government, I intend to focus intensively on the challenge of tackling the housing crisis. I take this opportunity to express my appreciation to the Oireachtas Committee on Housing and Homelessness which worked diligently over the past weeks and months. I commend the work of the committee and welcome the report which was published on 17 June last.

The first full year of implementation of the social housing strategy 2020 was 2015 when over €760 million was expended on the delivery of social housing which facilitated the delivery of over 13,000 social housing units. This represented an 86% increase in delivery on the figure for 2014. Building on this progress, the overall Exchequer provision for housing has increased by almost €145 million in 2016. The combined capital and current housing allocation for 2016 will result in an Exchequer investment of almost €821 million across a range of housing programmes. In addition, certain local authorities will fund a range of housing services from local property tax receipts to the value of over €112 million, bringing the total housing provision in 2016 to €933 million. This funding will see the household needs of over 17,000 households being met under a range of social housing initiatives. Under capital programmes, 1,500 units are targeted for delivery through construction and acquisition by local authorities and approved housing bodies. Local authorities will also return a further 1,500 voids back into productive use. Under the social housing current expenditure programme, 3,000 units are targeted for delivery through the acquisition, leasing or construction of houses and apartments by local authorities and approved housing bodies. In addition, 1,000 units will be delivered under the rental accommodation scheme, with 10,000 households being assisted under the housing assistance payment scheme, HAP.

I am committed to meeting the targets for 2016 and my ambition is to exceed them, if possible. In this regard, I have asked all local authority chief executives for their ideas and proposals to expedite delivery of social housing this year. I have recently been joined by Minister of State with responsibility for housing and urban renewal, Deputy Damien English, and, as Members are aware, we have been tasked with preparing an action plan for housing working with our Government colleagues and key stakeholders and drawing on the work of the Oireachtas Committee on Housing and Homelessness. The plan will be delivery focused and build on the considerable work already carried out or under way in my Department. It will include specific actions to expedite and boost supply of all types of housing, including social housing, in the immediate, medium and longer terms and focus particularly on households who have most difficulty in accessing the housing and rental market. It is recognised that a lot has been done in recent times to increase the resources available for housing and the focus now must clearly be on accelerating delivery. The action plan will be published in July and its implementation will already have begun at that stage.

The local government fund is funded principally by motor tax and local property tax receipts which are collected by the Revenue Commissioners. Local property tax continues to provide a sustainable, stable, alternative source of funding for the local government sector. The 2016 allocations of local property tax receipts to local authorities are based on the same mechanism and principles agreed by the Government in the previous year; 80% local retention to fund the delivery of public services, with the remaining 20% being redistributed to provide top-up funding for local authorities that have lower property tax bases due to variances in property values and density across the State. These measures are necessary to ensure a balanced system of funding local authorities. The Government has devolved more powers to local authorities by giving elected members discretion to vary the rates of local property tax by up to 15%. This allows for greater transparency and accountability at a local level. Some 11 local authorities voted to reduce local property tax rates for 2016, while 14 reduced their rates for 2015. We are seeing a slight reduction in the numbers making the decision to reduce.

The income sources to the local government fund this year are estimated to be motor tax receipts of €1.075 billion, local property tax receipts of €437 million and a payment from the Exchequer of €396 million. My Department will make payments estimated at €1.921 billion from the fund in 2016, including local property tax payments to local authorities of €453 million, payment of €348 million to the Department of Transport, Tourism and Sport for the maintenance of non-national roads and public transport and a payment from the Exchequer of up to €360 million. As highlighted, the water conservation grant which is being discontinued will be applied to enable the local government fund to meet a portion of the lost revenue to Irish Water as a result of the decision to suspend water charges and to cover the costs of readjustment to the financial supports for the group water sector. We have more or less agreed that with that sector and it seems to be happy with it.

The Vote also provides funding for the social inclusion and community activation programme, SICAP, which will be managed and implemented through the new local community development committees, as the new governance model for local and community programmes in each local authority area. The allocation of over €42 million for 2016 will allow further good progress to be made in this vital area.

I have kept my remarks as brief as possible. It will be useful to have a full discussion on the activities and funding of the restructured Department and I look forward to hearing members' thoughts and contributions. I have made some briefing material available to the committee which I hope it found useful. It is more detailed than what we provided in the past and it is a good basis for a good and transparent discussion on how money will be spent this year. I will happily take comments and questions at this stage.