Mr. Robert Nicholson:

When we were developing this work on the cost rental model, we worked off National Economic and Social Council, NESC, and other reports about the most appropriate model to deliver at scale because what is needed in cost rental is to deliver at scale in a countercyclical way and to try to harness the potential of private sector investments, such as international pension funds that look for modest long-term returns. In the first instance, most of these developments would be explicitly on balance sheet and in some way subvented by the State. That, obviously, has a particular limitation in terms of the amount of funds that might be made available. What we want to do over the longer term is get proof of concept as to how the model works and then introduce, and make it attractive, to the likes of international pension schemes. At the same time, we want to put a limit on what those returns might be in order to prevent the resulting impact on rents and the required level of cost rents. Typically, internationally, there would be an allowance for a level of return and pension funds might look for 3% or 4% return on their level of investment. What we are trying to do in the legislation is to provide for the Minister, in the future, to put a cap or regulation on what that level of return might be to expand beyond purely the State sector into private finance such as international pension funds to deliver much greater numbers at scale.