Mr. Sean O'Connor:

We use CALF and CREL funding extensively. There have been some very useful changes, especially to the cost rental regime. There has been the introduction of grants to dampen associations' gearing as we borrow. There is a model now to dampen gearing for social housing by introducing grants on that. That was a main criticism from the sector. Every scheme we were doing we went from 100% grant funding to 100% debt funding through a combination of private finance and soft loans from the Department, but there is no such thing as a soft loan for an auditor. You either owe the value or you do not, right? We owe the money in the books and that was driving up gearing, but there are mechanisms in place now that should keep borrowing down. The gearing is just a little bit academic because the main lender to the sector - and again Professor Norris had the connection there, being on the board - is the Housing Finance Agency. Effectively it is a monopoly. It has very competitive rates compared with the pillar banks and other lending authorities and that is something that needs to be tackled. There needs to be a bit of competitive tension brought into the borrowing and that would be helpful. The gearing thing is important but something is being done about that.