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

I will make a detailed opening statement. We will, I hope, go through the different briefs one after the other and take questions members may have.

I welcome the opportunity to discuss with the select committee my Department's Revised Estimate for 2017. I am accompanied by the Minister of State, Deputy Damien English, and the Minister of State, Deputy Catherine Byrne. To assist in our work today we provided a briefing note last week on the Department's funding for 2017. It set out details of the Vote and the local government fund, as well as other key information.

The Revised Estimate sets out my Department's budget for 2017. Gross expenditure of €1.779 billion is budgeted for. This represents an increase of almost €400 million or 29% on the provision for 2016. Such a significant increase in resources clearly indicates the priority the Government attaches to my Department's programmes and, in particular, the importance and urgency we have assigned to supporting the initiatives set out in Rebuilding Ireland, the housing and homelessness strategy. The gross provision for 2017 is made up of over €1 billion in current spending and over €700 million in capital spending. In addition, my Department's programmes will benefit in 2017 from resources available from the local government fund.

In 2017 we will see a very significant level of new investment in housing. As I have previously stated, housing is an absolute priority for the Government. This is evidenced clearly by the level of resources allocated to support my Department's housing programmes this year. The Revised Estimate shows that €1.2 billion is being made available for housing programmes in 2017. In addition, local authorities will fund a range of housing services to the value of €92 million from surplus local property tax receipts, bringing the total housing provision to almost €1.3 billion. This investment will see the housing needs of over 21,000 households being met in 2017. Through a provision of €732 million for capital expenditure which is made up of €655 million of Exchequer funds and €77 million from LPT receipts, self-funded by local authorities, local authorities and approved housing bodies will be in a position to deliver 4,450 units through a combination of construction, acquisitions, rapid build, Part V and returning vacant units to productive use.

The provision of €566 million in current expenditure which is made up of €551 million of Exchequer funds and €15 million from LPT receipts, self-funded by local authorities, will mean that 16,600 additional households can be supported in 2017 under the housing assistance payment scheme and the rental accommodation scheme and through direct leased units.

The Housing Agency will be provided with capital funding of €70 million, with the specific focus of engaging with banks and investment companies to acquire properties for social housing nationally, thereby increasing social housing delivery. It is estimated that this mechanism will deliver 1,600 units in the period to 2020.

A new vacant repair and leasing initiative will allow local authorities to provide financial assistance for property owners to bring vacant properties up to standard in order that they can then be leased as social housing. The scheme will be rolled out nationally, with a total investment of €32 million, to enable up to 800 vacant properties to be brought back into use as new homes for families on local authority waiting lists.  A new buy and renew initiative will support local authorities and approved housing bodies to purchase private housing units in need of remediation, renew and make them available as social housing. An initial capital provision of €25 million will be available for this initiative in 2017.

The Government has also established a €200 million local infrastructure housing activation fund, LIHAF, supported by an allocation of €50 million in 2017. The fund will provide enabling infrastructure on key sites to open up lands for early development. The initiative has the potential to release the delivery of between 15,000 and 20,000 new homes by 2019. We hope to be in a position to announce the fund next month shortly after St. Patrick's Day.

The Exchequer funding being provided for housing authority managed homeless services is up by almost €28 million or 40% on the 2016 budget provision and totals almost €98 million. This will ensure the increased demand for emergency homeless services will be addressed effectively. It will assist in supporting homeless households to access long-term and sustainable housing solutions.

In 2017, some 3,000 exits from emergency accommodation are expected to be achieved through normal social housing tenancies, provision of rapid build housing and the housing assistance payment. Last year, the figure was 2,700 which was by some margin the highest ever in terms of housing solutions for homeless people.

As part of the Government’s response to tackling housing supply issues, An Bord Pleanála has been entrusted with administering new temporary fast-track planning procedures for proposed residential developments of 100 or more units and large-scale student accommodation projects, known as strategic housing developments. Under the new procedures the board will be required to complete pre-planning application consultations regarding proposed developments with the concerned developers and the relevant local authority within nine weeks of receipt of request.

The board will subsequently be required to make a final determination in respect of planning applications for concerned developments within 16 weeks of receipt of the planning application. This potentially will result in planning decisions in respect of such large-scale residential developments being made within 25 weeks of the commencement of formal pre-application consultations with the board, as against the current two stage planning application process which can, in certain circumstances, take up to two years from initial design concept stage to securing ultimate approval.

Turning to water services, which seems to be a topical issue today, committee members will be aware that Irish Water took on responsibility for the delivery of water services from 1 January 2014. The programme for Government commits to a capital investment programme, which includes the €5.5 billion in capital set out in the Irish Water business plan to 2021, to continue to upgrade the dilapidated national water infrastructure.

The projected level of subvention and equity to be provided by the Government to Irish Water assumed in its business plan to 2021 averaged €475 million in subvention and €270 million in equity contributions for both 2017 and 2018. Additional funding is being provided in 2017 to address the shortfall arising from the suspension of domestic water services charges.

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 €17.8 million in 2017 for my Department’s rural water programme, under which funding is provided for group water schemes. A multi-annual approach was introduced in 2016 in respect of the rural water programme.

The new multi-annual approach provides enhanced funding certainty for priority investment needs in order to support the implementation of proper planning and sustainable development in rural areas, to meet the requirements of the EU drinking water directive in relation to rural water supplies, and to support the delivery of measures identified in river basin management plans to meet the objectives of the water framework directive.

The local government fund is funded principally by motor taxation and the local property tax, LPT, which is collected by the Revenue Commissioners. In addition, a payment is made to the fund from my Department’s Vote. Local property tax continues to provide a sustainable, stable, alternative source of funding for the local government sector. Save for an administrative change to the treatment of pension-related deductions, which is positive news for local authorities, the 2017 allocations of local property tax to local authorities are broadly based on the same mechanism and principles as were agreed by Government in previous years, with 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 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. The income sources to the local government fund this year are estimated to be motor tax of just over €1 billion, LPT of €460 million, and a payment from the Exchequer of €365 million.

My Department will make payments estimated at €1.837 billion from the fund in 2017, including LPT payments to local authorities of €500 million, payment of €333 million to the Department of Transport, Tourism and Sport for the maintenance of non-national roads and for public transport, payment of €639 million to Irish Water, and a payment to the Exchequer of up to €230 million.

The Department’s 2017 Vote also provides funding for a range of community programmes. The bulk of the funding, over €42 million, is provided for the social inclusion and community activation programme, or SICAP as it is known. SICAP, which was rolled out on 1 April 2015 as the successor programme to the local and community development programme, takes account of the new alignment structures in its delivery and objectives. The programme is managed and implemented through the local community development committees, as the new governance model for local and community programmes in each local authority area. The aim of SICAP is to reduce poverty, promote social inclusion and equality through local, regional and national engagement and collaboration. I am confident the allocation of over €42 million for 2017 will allow for the continuation of important supports for people in disadvantaged communities and will allow for the key, essential, front-line services delivered through the programme to be maintained.

Even though my brief is wide-ranging, I have kept my remarks as brief as possible in order to allow for a full discussion on the programmes and funding of my Department this year. I hope my remarks provided a helpful introduction to what we need to get through today. I thank Deputy Casey, in particular, for taking the time to be here.