Brian Stanley (Laois-Offaly, Sinn Fein) | Oireachtas source

I welcome the Bill, which will increase the power of local councillors. Sinn Féin wants stronger local government and seeks the transfer of decision making powers to local councils that are adequately funded through progressive taxation and rates. We want the maximum devolution of power and functions to local government. The Putting People First document is light on detail on the devolution of new roles and functions to local authorities. While it makes some suggestions in this regard, I hope it will result in fundamental powers being transferred from Government Departments to local councils because elected representatives should have maximum control at local level.

Ultimately, they will be obliged to go back to the public and, therefore, they must interact with the public. This will shift a certain amount of power from city and county managers to elected councillors, which is good. In obtaining power to set rents and have an input thereto, councillors will need to tread wisely. They must not impose rents that are too high, particularly on those who are struggling to pay bills and put food on the table. Any rent schemes that are introduced must be fair and equitable.

I cannot find in the Putting People First document a strategy relating to real and substantive reform of local government. However, I look forward to the debate on the matter in the hope that we might extend the parameters to some degree. It appears that the Government is proceeding in a piecemeal fashion and this Bill is evidence of that, particularly as it has been introduced in the absence of a proper strategy. While I accept it is a move in the right direction, it does not go far enough. The Bill has been brought forward against the backdrop of the housing crisis and the introduction of the hated family home tax, otherwise known as the property tax. Local authority tenants will not be exempt from its provisions. It is strange that no information has been forthcoming with regard to how this is going to be dealt with by local authorities. The City and County Managers Association has not indicated how it proposes to proceed in respect of what is envisaged. The Department and the Minister, Deputy Hogan, have also failed to provide any indication of how it is intended to proceed. Local authority houses are going to be valued at up to €100,000. Tenants are concerned that the tax will simply be imposed on them by local authorities through increases in rent. That would be unacceptable. Sinn Féin continues to table motions on this matter at council meetings in an attempt to stop that from happening.

The question which arises is whether local authorities will pay the property-home tax relating to the houses they own. They may be able to do so during the current year because the period of payment is only six months. This means that they will only be obliged to pay €45 per house. The local authority in County Laois, which is small enough, is still going to be obliged to find €180,000 to pay the tax on approximately 2,000 council houses. The council may absorb that cost this year but its members have not been informed as to whether this will be the case. That is extremely interesting because the councillors were not informed about the position with regard to the tax when they set their budget last November or December. If they cannot come up with the €180,000 I mentioned, they will be obliged to find a crock of gold somewhere. Next year, the amount the council will be obliged to pay will be €360,000. I do not believe it will be able to carry this cost unless it manages to perform some kind of Houdini act. The group which controls the council will not want or will be reluctant to impose a charge on tenants in light for the impending local elections and the advent of water charges. All of these charges are beginning to pile up. Local authorities will not be able to absorb the cost of the tax next year. It will be interesting to see what is going to happen. I have heard nothing from the Minister of State, the Minister, Deputy Hogan, the Department or the City and County Managers Association on this matter. The word "property" assumes ownership but local authority tenants do not own even one of the bricks used to build their homes. For this reason, the local property tax is wrong and it should be scrapped.

Everyone recognises that there is a housing crisis at present. Huge numbers of people are on waiting lists, with over 100,000 applicants awaiting housing. This crisis is compounded by the fact that there are over 30,000 empty houses in unfinished estates. Many of these properties are lying dormant. There are 65 unfinished estates in my county. I accept that this is not the current Government's fault. It is the legacy of the light tough regulation that obtained under the previous Administration, the strings of which were pulled by developers and bankers who knew it all. Anybody who opposed these people was damned for doing so. In County Laois there are 1,700 individuals who can only live in hope of being housed at some point in the future. This is at a time when many houses are lying empty. It is unacceptable that the Government is continuing to bail out the banks while the housing list is in its current state. Where is the bailout or the social dividend for the people? The situation in which we find ourselves is absolutely ridiculous.

The Government must do two things. First, it must seek to put those families who are waiting to be housed into houses. NAMA has identified 3,200 apartments and houses which are ready for habitation. It is somewhat shocking, therefore, that according to the most recent figures I have seen only 110 contracts have been signed. That was confirmed on Question Time yesterday. The Department is assessing a further 500 houses on unfinished estates to discover whether they are suitable to be used as social and voluntary housing. Even if these are all approved, it will mean that only 500 out of 30,000 applicants will be housed. That is a disgrace and by any standard it represents a failure on the part of the Government to tackle this issue. With respect, the Department of the Environment, Community and Local Government is moving at a snail's pace on this matter. The Minister of State indicated yesterday that there is a special purpose vehicle within NAMA which was set up to fast-track the response to this issue. I welcome that fact. However, the vehicle in question is not even in first gear yet. It is extremely frustrating that large numbers of houses on unfinished estates are lying idle when there are so many people on waiting lists. Some of the houses in question are near completion and finishing construction on them would provide work for some individuals.

I am not sure whether the Government actually appreciates the depth of this crisis. Priority must be given to investing the resources necessary to assess houses owned by NAMA and on unfinished estates and allocate them to those awaiting housing. I urge the Government, if necessary, to introduce legislation to allow local authorities to purchases these houses at knock-down prices. At present, they are being leased from landlords on a long-term basis. I can discuss the economic madness of this with the Minister of State at another time or I can do so now if she wishes. The Government should, if it proves necessary, use compulsory purchase orders to buy the properties in question at knock-down prices and put them to use as social and affordable homes. There is a precedent for this. In the past, and under Fianna Fáil and Fine Gael Governments, the Land Commission purchased unused and under-used land at knock-down rates and leased it to small farmers who did not have enough land of their own.

The second action which the Government must take is to put in place the type of local authority building programme which my party has been seeking for some time. Before, during and after the boom, our repeated request has been for public investment. If the State - in partnership with local authorities - does not take the initiative, then the private sector completely controls the market. That is not healthy. Social housing is something of which we should be proud. This State can certainly be proud of its record in respect of such housing, which gives rise to multiple benefits for the economy, local authorities and communities. Social housing helps to stabilise the market and it provides housing for those who need it but cannot afford it. In addition, it provides badly needed jobs. Far from being a drain on the resources of Laois County Council, local authority housing in the county has given rise to rental income of €3.5 million this year. Rents in Laois are very low. I have seen examples of rents in other counties which are far higher. Less than €700,000 of this €3.5 million is spent on housing and repairs. This frees up approximately €2.8 million in funding. I understand that it costs money to build houses but this can be paid off the capital sum. I am merely pointing the economics of this matter. When these houses are sold - most of them will be - in ten or 20 years' time, the council will obtain a nice little point of money which it can spend on other capital works. What I am suggesting makes economic sense.

The difficulty with what the Government is doing is that it has bought, hook, line and sinker, into what Michael Finneran left behind him. I am extremely disappointed with the Minister of State, Deputy Jan O'Sullivan, and her predecessor, Deputy Penrose, in this regard. It has been stated that we are in a recession. However, during the major recessions which occurred in the 1930s, when Fianna Fáil was in power, and the 1950s, when Labour, Clann na Poblachta and Fine Gael, were in power, massive house-building programmes were put in place. What the current Government is doing is leasing houses from landlords. If one takes it that the annual rent on one such property is €8,000, this means that the Government will pay €80,000 over ten years. The property must then be returned to the landlord in pristine condition. As a result, there will be a huge mountain to be climbed at the end of the process because it is going to cost a fortune to return these houses, in pristine condition, to those who own them.

Some €70,000 or €80,000 will also have been spent on rent. Councils could build or purchase houses. In my area, a three-bedroom house in perfect condition could be bought for €50,000, €60,000 or €70,000. These could be rented, accruing up to €5,000 per year in revenue. After ten years, a council would have collected between €30,000 and €50,000 in rent and still have houses to sell, assuming that is its wish. Alternatively, it could rent them until Thy kingdom come.

I understand that money is scarce, but this Bill is bad planning. The European Investment Bank, EIB, has told Sinn Féin that it would be interested if the Government approached it with a proposal like Deputy Ellis's. I am trying to shift the Minister of State away from the idea of social renting. It is economic lunacy. The permanent government in the Department will steer her in that direction, as its officials will not listen to any other doctrine. However, the Minister of State is a so-called super junior Minister and has her hands on the levers of power. She understands what I am proposing, as she sees the situation on the ground every day, just as I do. She and I are starting from the same point. I am not having a go at her. Instead, I am trying to impress upon her the importance of this issue. I will give Fianna Fáil credit for what it did in government in the 1930s, but not for what it did during its last term. I will also give Fine Gael and Labour credit for a good measure they undertook in the early 1950s. Consider all of the Merrion Avenues in the country. They were completed in 1954. Every town in the midlands has one. If large housing schemes could be built then, they can be built now.

Social leasing is an economic time-bomb, as whoever is sitting in the Minister of State's seat in ten years' time will not be able to pay the bill to return the houses in question to pristine condition. In the meantime, all of the money will have been spent on rent.

See this speech in context