Dr. Donal McManus:

This is not a classification issue for countries in Europe. When we go to meetings they do not speak about this. In fact, they do not want to get involved because they do not want to get dragged into this Irish problem. They are keeping their heads down and stating the Irish are up to something but they do not want to get involved in it. There are various traditions in the history of social housing throughout the European Union. Many of them have focused on rent type structures, such as cost rent or economic rent, that allows the provision of State support but also means income is received from tenants and there is a HAP-type support for tenants who cannot meet the rent level.

By and large, this is not an issue. I am not aware of a campaign by EUROSTAT throughout the European Union to target social housing to put it on-balance-sheet. We were annoyed when it happened. We thought we were unfairly picked out as a sector for this classification. This has not been a widespread issue throughout the European Union. Social housing provision in Ireland has become narrow. It used to be wider with council housing back in the 1950s and 1960s when income groups were housed.

The rules at European level are a big issue. There is exemption from the notification of state aid if there is a targeted social housing definition. This should be re-examined and widened for Ireland and for other countries as there are real affordability problems in other major urban centres. There is momentum throughout Europe to look at the service of general interest, which are the rules by which a country can allocate state funding to social housing.

Aligned to the classification issue, which is what we are focusing on today, is seeing whether there could be a re-examination of the definition of the services of general economic interest rules in the current European climate, where housing affordability is a major problem, to allow more targeted social housing and to allow for a new income group. We must appreciate that affordable housing is a slippery term. Sometimes it is 35% of income and there is a question of who qualifies. Where the European Union rules come into play is where the market has failed and it is incumbent on a member state to be able to provide state aid, whether through subsidies or land. This issue could be grappled at the same time as the classification issue. It is a wider issue, as Deputy Boyd Barrett mentioned, but it is one that could be looked at here and at European level where there is common interest.

We provide a lot of capital funding for social housing, unlike the UK which moved into the private financing of social housing 30 or 40 years ago. We will shift from 100% capital to 30% capital in between five and seven years. This is a record change for any sector in Europe. In one sense we are working our way through it. We are not experts but we have made a fair stab at it to get to this stage, working with local authorities. There are a few things we could look at, including the European rules on services of general economic interest. They could certainly be explored so we can have a discussion and speak to people about them at European and national level. Conversations on classification and the services of general economic interest rules could certainly be had in the current housing environment.