Mr. Cathal Callan:

Going back to the added value issue, and Mr. Brennan has touched on it, all of those present here are actively looking for alternative finance from the Housing Finance Agency. The motivation behind this is to widen the portfolio of debt and where we get it from, but it is also because we realise there is a limit to how much we can borrow from the Housing Finance Agency in the long term. As I have said, our programme will require significant additional funding. This is why we welcome the potential to borrow from credit unions. When we looked at additional funding coming in to the sector we recognised the limitations within the commercial banks for long-term matched funding. We then looked at long-term investor funding, which is long-term commercial bank funding from outside Ireland. We would welcome the opportunity to have another source of funding that could match the time periods we need to borrow for, which are around 20 years, 25 years or 30 years.

The second question relates to the CSO. I have very serious concerns about the implications of any decision. I believe the implications within the United Kingdom were not as significant and were managed quite well. However, they pertained to the level of governance and not to the financial or economic aspects. I do not believe we would have a problem with governance as because the regulator is not on a statutory footing, there is not the same level of control in place. We will potentially have a problem around the funding streams that are coming through to us. I have been with Clúid for eight years. I came in when the capital loan subsidy scheme and capital assistance scheme funding stopped and it came as a juddering halt to the sector as to how we were going to move forward. It has taken a number of years for us to get to the point where we could borrow properly and where we knew what we were doing in relation to it. The regulator was put in place. My concern is that if there is a decision regarding the price and availability structure or the capital advance leasing facility, CALF, structure that has implications in respect of the CSO decision, it could have the same juddering effect on the sector as had that cessation in funding. This could present major problems for this proposal in the context of credit unions accessing funds.

There are also major problems about our long-term plan and delivery programme because it is all premised on accessing funding from the HFA or elsewhere. I am concerned about the decision, and it will not be reversed quickly. There may have to be changes and the changes that are put in place may cause problems for the funding stream. One is stepping somewhat into the unknown but I would estimate a two-year or three-year window to rectify it, if it is possible to do so.

The issue of tenant purchase was raised. There have been lots of discussions and Clúid has looked at running some form of tenant purchase. Our executive board has actively held discussions on whether we want to do it. Mr. Brennan spoke about retaining properties for social housing but there is another problem, which is that all our assets are encumbered and have a loan against them. Any tenant purchase system has to work on a significant discount basis and the discount for AHBs, for example, would have to be compensated somewhere. It is not that we will start crying because we are out of cash - we have a debt and have to repay that debt. Whether it is with the CLS or the debt finance units there is the same implication. Clúid would welcome a tenant purchase system if we understood the mechanisms behind it and how it would work. However, we also understand the risk and there are issues that need to be worked through.