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

I welcome the opportunity to discuss with the committee progress to date in 2016 on expenditure and outputs relating to my Department's programmes. The plan was that I was to be accompanied by the Ministers of State, Deputies English and Catherine Byrne, but I am sure they are on call if we need them.

The Revised Estimate for 2016 for my Department was initially published in December. The Estimate was subsequently revised to take account of the transfer of functions from my Department to the newly configured Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs and was discussed by the select committee on 30 June. A further transfer of functions from my Department to the Department of Communications, Climate Action and Environment took place in July. On foot of this, the gross budget for my Department in 2016 stands at €1.383 billion. That represents a gross reduction of €109 million on the Estimate published in December. The Revised Estimate published in June also reflects a reclassification of the water conservation grant as a result of the suspension of water charges.

Following my recent engagements with the committee, members will be aware of the absolute priority I attach to meeting the housing challenge. In 2016, the overall Exchequer provision for housing has increased by €145 million. The combined capital and current housing allocation for 2016 will result in an Exchequer investment of some €821 million to support the delivery of housing programmes. In addition, certain local authorities are funding a range of housing services from surplus local property tax, LPT, receipts to the value of over €112 million, bringing the total housing provision in 2016 to €933 million. Some €121 million of Exchequer funding has been spent on capital housing programmes to date in 2016, with a further €65 million being spent by local authorities from LPT receipts, the bulk of which has been used to support the construction and acquisition of social housing units. Expenditure on capital programmes typically ramps up towards the end of the year and I expect that to be the case this year in the capital housing programmes. Some €210 million has been spent to date by my Department under the current expenditure housing programmes and this has been supplemented by spending totalling €22 million by local authorities from LPT receipts.

The funding available under the housing programme in 2016 will see the housing needs of 17,140 households being met under a range of social housing initiatives. The year-to-date position shows that very good progress is being made, with over 10,400 households already supported in 2016. I am strongly committed to meeting the overall target this year and my Department will continue to monitor progress closely so that any issues affecting progress in certain areas can be compensated for through accelerated progress in other areas.

The publication in July of Rebuilding Ireland: An Action Plan for Housing and Homelessness reflects the priority being afforded to housing. The plan provides for €5.35 billion funding over the period of the plan to support the delivery of 47,000 units of social housing by the end of 2021, through build, refurbishment, acquisitions and leasing. In addition, €200 million is being provided for the local infrastructure housing activation fund to boost supply through investment in key enabling infrastructure. Implementation of the actions set out in Rebuilding Ireland: An Action Plan for Housing and Homelessness will be a key priority for the Department in budget 2017.

Turning to my Department's water programme, the bulk of the spend relates to the rural water programme. Some €17.5 million is allocated to that programme this year. The priority under the programme is the need to address water quality problems in group water schemes with funding also provided for group sewage schemes.

An amount of €110 million was originally provided in 2016 for the purposes of meeting demand under the water conservation grant. With the suspension of water charges and the grant, this funding has instead been paid to the local government fund to be used to meet a portion of the revenue shortfall 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. Some €300,000 was retained in the water conservation grant subhead to cover some nominal administration costs that will arise in 2016.

The money in the local government fund comes principally from motor taxation and local property tax, which is collected by the Revenue Commissioners. Local property tax continues to provide a sustainable, stable and alternative source of funding for the local government sector. The 2016 allocations of local property tax to local authorities are based on the same mechanism and principles that were agreed by Government in the previous year, namely, 80% local retention to fund the delivery of public services and the remaining 20% being redistributed to provide top-up funding to 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 for 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. Some 11 local authorities voted to reduce the LPT rates for 2016, compared to 14 in 2015 and, hopefully, we are moving in the right direction there.

The income sources to the local government fund this year are estimated to be motor tax of €1.075 billion, LPT 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. Apart from support for water, the main payments from the fund are LPT payments to local authorities of €453 million and payment of €348 million to the Department of Transport, Tourism and Sport for the maintenance of non-national roads and public transport.

The Department's Vote also provides funding for the social inclusion and community activation programme, SICAP.

The programme is managed and overseen through the new local community development committees as the new governance model for local and community programmes in each local authority area. The 2016 allocation of over €42 million will allow further good progress to be made in this vital area of front-line support provision. Some €36 million has been spent to date in 2016. A total of 5,119 of the 15,986 individuals who had received employment support payments by the end of June 2016 had participated in labour market training, 925 had progressed into full-time and part-time employment, while 2,996 had progressed into self-employment.

I look forward to hearing members' thoughts and contributions on the mid-year review. I have made some briefing material available to the committee to assist it in its deliberations. With my officials who are the experts in this area, I am available to respond to questions or queries members may have. Obviously, the Minister of State, Deputy Damien English, also plays a part in putting these numbers together.