Mr. Barry O'Leary:

We would advance it to the local authorities.

On the capacity of local authorities to build and lend, we have had conversations with them. We have been in contact with local authority heads of finance and the County and City Management Association, CCMA. They are interested and would love to be able to borrow. However, there are issues for them. They want to be sure that if they borrow, they will not be put into a position where, at some point in the future, they will be struggling for the capacity to repay it. They like the idea that it is a fixed rate and there is certainty about it. However, there are issues for them in interacting with the Department and ensuring there is a system in the style of the payment and availability agreement available for approved housing bodies. This would ensure they have certainty that their own financial situation is kept stable.

All our borrowings are on-balance sheet, meaning it is one of the challenges. It is our contention that there are many potential solutions that will contribute to this. There are off-balance-sheet vehicles, public private partnerships and activity with credit unions. All these options take time, however. An intervention where local authorities could get involved with a signal given to them to go ahead and build would, we feel, be quicker than all the other options. This does not preclude them being transferred later into some other option to get them off-balance sheet. We feel the primary consideration is to get the houses built.