Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

I propose to take Questions Nos. 9 and 148 together.

The capital loan and subsidy scheme, CLSS, was introduced in 1992 for the purposes of providing long-term mortgage finance from the Housing Finance Agency, HFA, to facilitate the provision, by approved housing bodies, of standard rented accommodation for low-income families. The scheme is administered by the local authorities and repayments of principal and interest charges to the HFA are made at six-monthly intervals by the local authorities, provided the relevant housing body complies with the terms and conditions of the funding scheme. Local authorities are recouped the full amount of the loan charges by my Department. The CLSS was terminated in 2009 and no new voluntary housing projects can be approved at this time. Given that most CLSS loans are for a period of 30 years, loan charges will continue to apply for many years to come.

Under the terms of the CLSS, loan charges are payable by local authorities in two tranches each year on foot of invoices issued by the HFA for the periods January to June and July to December. Charges for the January to June period are payable by 31 July each year and charges for the July to December period must be paid by 31 January. In accordance with custom and practice over many years, details of the loan charges due issue in December, starting with those local authorities with the greatest level of borrowings. These generally are the Dublin authorities and some large rural authorities. On receipt of claims from these authorities, my Department processes and recoups the loan charges, subject to the availability of funding and, in turn, those authorities pay the charges to the HFA.

CLSS loan charges for 2014 are estimated to be approximately €64 million and the loan charges for the July to December period must be paid by 31 January. By synchronising the recoupment of loan charges and putting each local authority on the same footing, with each local authority recouping loan charges in early January, there will be a once-off saving of approximately €15 million in 2014. This is a straightforward accounting exercise with no implications for local authority finances. All local authorities are put into funds in the same calendar year and repayment of loan charges can be made in accordance with the HFA requirements. There is the advantage of a once-off easing of recoupments in a given year. Given the pressing need to maintain public services and support employment generation at this time, I believe it is opportune to streamline loan repayments in 2014 to support these objectives.

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