Ms Maria Graham:

I thank the Chair and members for offering the Department a further opportunity to discuss the general scheme of the Land Development Agency Bill 2019.

As the Chairman mentioned, I am joined by Mr. Frank Gallagher, principal officer, and Ms Mary Jones, assistant principal officer, who have responsibility within the Department for matters relating to the LDA.

We have followed the public discussions in the committee over the past few weeks. I propose, in my opening statement, to pick up on some of the key themes from our perspective and provide some further clarifications to assist the committee in its work. Of course, as part of the drafting of the Bill, there will be a thorough and detailed consideration of the committee's report on the general scheme.

As appropriate for a general scheme dealing with the establishment of a new body, the debate to date has focused on the role and functions of the LDA and its governance. These are matters that I might briefly address. Regarding the role and functions of the agency, it is important to recall that the national planning policy statement, which was published in 2015, recognised the importance of creating sustainable communities by ensuring that the right development takes place in the right locations and at the right time. Following on from this, Project Ireland 2040 through the national planning framework, NPF, and national development plan, NDP, provide for the alignment of spatial and investment policy to ensure future developments are plan-led rather than developer-led.

The LDA is being established in this context and responds to the need for more active land management by the State, which has been articulated in many policy documents over the years, including the 1973 Kenny report and various reports of the National Economic and Social Council, NESC. Indeed, in its latest report on this issue, report No.1451, NESC stated that Project Ireland 2040 provided the perfect moment to transition to a new system of urban development and land management. In this regard, the council strongly supported the concept of a national regeneration and development agency as proposed in the NPF, and now established under secondary legislation as the LDA.

The LDA's immediate focus is on managing the State's own lands to develop new homes and regenerate underutilised sites. In the longer-term, it will assemble strategic land banks from a mix of public and private lands making these available for housing in a controlled manner, bringing essential long-term stability to the housing market.

Allied to this, the LDA will also act as a national centre of expertise, supporting and complementing the ongoing work of local authorities, public bodies and other interests to harness public lands as catalysts to stimulate regeneration and wider investment, and to achieve compact, sustainable growth with a particular emphasis on complex regeneration projects and the provision of affordable housing. The general scheme seeks to ensure that the primary legislation provides for both the immediate and longer-term roles of the agency.

State intervention in this manner invariably gives rise to considerations regarding potential state aid. In developing the legislative approach, we are working both with the Office of the Attorney General and the LDA's legal team to ensure the evolving model is compliant with all aspects of EU law.

The advices to date have informed our approach to setting out the functions within the general scheme. In particular, head 9 draws a distinction between a range of non-economicfunctions, the LDA will carry out on behalf of the State in support of the NPF and management of public lands such as the proposed register of public lands and an advisory role to the Minister, and the core economic functions it is intended will be undertaken on a commercial basis without providing an advantage to either the LDA or other parties under State aid rules.

As the legislative process evolves, including having regard to proposals that may emerge from the committee, we will continue to examine the various legal dimensions, including matters of EU law such as state aid and will engage with the European Commission.

The Commission was informed about the LDA at the time of its establishment in August 2018. The next step will be a structured engagement with the Commission through its informal preliminary procedure. This will be based on information from the agency on its business model as well as the draft LDA Bill, outlining the nature and role and functions of the agency. This structured engagement is consistent with the approach taken in respect of other commercial state bodies and reflects the specific nature of the LDA.

An important function of the agency will be the delivery of affordable housing on public lands, both through activation of the lands transferred from Ministers to the agency and through the services it provides in partnership with local authorities in respect of the activation of local authority lands.

While the nature of the provision on local authority lands is as matter for the respective local authorities, in the case of public lands, the Government has decided that a minimum of 30% affordable housing should be provided in addition to the 10% social housing requirement under Part V of the Planning and Development Acts. This has been articulated to the LDA and other public bodies, as a matter of policy, but the Minister is open to exploring if this requirement should be placed on a statutory footing.

I turn now to the issues of governance and accountability of the LDA. Having regard to the proposed roles and functions of the agency, it is important that its legislative framework provides the appropriate balance between the commercial freedom to fulfil these functions and the accountability to the State as the owner of the agency. A key document in this regard is the code of practice for the governance of State bodies. This code was updated and revised in 2016. It is designed to ensure that both commercial and non-commercial State bodies meet the highest standards of corporate governance. The code is based on the underlying principles of good governance: accountability, transparency, probity and a focus on the sustainable success of the organisation over the longer term.

The LDA will have to comply with this code, and this will include the issuance by the relevant Ministers of a shareholder expectations letter, which will outline both policy, corporate governance and financial expectations. This letter will be developed with the support of NewERA.

In addition, key components of governance and accountability are reflected in the general scheme, based on the most recent legislative approaches for other similar bodies. Head 6 refers to the development of the constitution of the LDA, such documents are required under the Companies Acts, and were previously known as memorandum and articles of association, which will set out the powers of the agency consistent with its governing statute and the actions that will require ministerial consent. Head 10 deals with board of the agency, which will be appointed through the stateboards.ieprocess. Head 27 deals with borrowing by the agency, with the limit to be set in statute. Head 29 deals with the financial statement of the agency and provides that the Comptroller and Auditor General will audit the agency. Head 30 deals with accountability to the Committee of Public Accounts. Head 31 deals with reporting arrangement. Finally, head 36 specifically provides for a review of achievement of the agency's purposes by the Minister.

I am aware that, in the context of the governance of the LDA, the discussions have focused on the approach to both freedom of information and lobbying. The approach currently being adopted aligns with the general norms for commercial bodies as set out in legislation, which is generally a matter for the Minister for Public Expenditure and Reform. The Minister is open to proposing alternative approaches to Government where measures are identified that would enhance accountability without compromising on the LDA's capacity to execute its proposed statutory role. We will, therefore, consider any recommendations of the committee in this regard.

I thank the Chairman and members for offering us the opportunity to update them on the general scheme of the Bill and I hope I have clarified many of the issues raised in previous sessions. As always, the Department's team will be happy to clarify any further issues.