Dr. Michelle Norris:

I will respond to the Deputy's questions with some preliminary comments before passing to my colleagues for a more detailed response. In regard to the question of soliciting for loan business, the agency does not actively seek out lending. Rather, organisations come to us seeking loans. Our function is not to set policy, but we work with the Department of the Environment, Community and Local Government and the local authorities on an ongoing basis to ascertain their needs.

We give regular feedback. For instance, our work in trying to provide local authorities with more flexible borrowing options is to enable them to deal with problems related to their mortgage loan books and distressed borrowers and to refinance their loans in the same way as private banks are doing as part of the mortgage arrears resolution process. We actively work with them to monitor the level of arrears and come up with the most flexible funding model possible to meet their particular needs in the current economic climate and the needs of their clients.

On whether voluntary housing associations choose to use our loans to buy developments, we do not actively seek loan business - the voluntary housing sector approaches us. However, most of the voluntary housing sector developments the Housing Finance Agency has funded to date also have a small grant attached to them. This grant is provided by the Housing and Sustainable Communities Agency and the criteria used in making decisions on its allocation include whether social housing is necessary. Our assessment of applications from the voluntary housing sector considers primarily the corporate governance standards of the organisation in question and its capacity to repay the loan we issue.