Jack Wall (Kildare South, Labour)
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I raise this issue in the knowledge that practically on a daily basis, Members on all sides of the House raise matters from their own constituencies in respect of housing loans. Usually, the banking sector receives the brunt of the complaints in this regard, to the effect that it is not dealing with those who are unfortunate enough to be in such a position. However, it has recently come to my attention that in addition to such problems, local authorities also have particular problems regarding housing loans they allocated to people in their communities. In this regard, I asked the Oireachtas Library to carry out a survey on shared ownerships by local authorities to ascertain the position in respect of payments being in arrears. Amazingly, 43% of the loans nationwide were in severe financial difficulty. For example, 42.8% of the loans in the Minister of State's own constituency of Dún Laoghaire were in arrears, while 36% of the loans in my constituency in County Kildare are in arrears. I raised this matter with Kildare County Council's housing section and the main problem identified by the officials there, who are ever-helpful to those who are unfortunate enough to be in such difficulties, was that it was not within their remit to do anything regarding the arrangements with which the person concerned drew down the loan. When I questioned the official further in this regard, she replied that she had investigated the matter and had found that section 34 of the Housing (Miscellaneous Provisions) 2009 had not had a ministerial order applied to it. This section bears reading and should be read into the record of the House. Section 34(2) states:

Where there are moneys due and owing by a household to a housing authority under any of the provisions to which this section applies and the housing authority is satisfied that the household would otherwise suffer undue hardship, the housing authority may enter into arrangements with the household for the payment of those moneys (together with any interest that may have accrued under section 33(2)) by such instalments and at such times as the housing authority considers reasonable in all the circumstances in addition to any rent, charges, fees or loan repayments that the household is paying to the authority.

Although both Government and Opposition Members criticise the banks, the Government itself probably is a greater problem to many people in this respect, in that it has failed to implement its own legislation. The Government has not enabled local authorities to deal with those who are unfortunate enough to be in financial difficulties. Having spoken to my local authority, this is what it wishes to do. The person at the desk of the local authority does not wish to state consistently to those concerned that the council has no means available to it to deal in any way with a person's case, other than to demand that all the payments be made that are required by legislation or under the guidelines regarding the loan and that the authority is obliged to adopt such strict criteria.

The Minister for the Environment, Heritage and Local Government talks the world over about all the wonderful things he is doing. However, when it comes to the basic function of protecting the family homes of these people, he will not apply this provision. While he applied section 35 in respect of antisocial behaviour, he has refused to implement the necessary provision to protect the family home. This is a joke. As I noted, the percentage of loans in arrears in Dún Laoghaire is 42%. In the Minister's own region of Dublin city, out of 1,652 loans, 719, or 43%, are in trouble. He has the capacity to do something about which Members argue daily in respect of what the banks are not doing but he will not do so. This is a disgrace and given the numbers I have provided to him in respect of his own constituency, I ask the Minister of State to bring this matter to the attention of the relevant Minister, be it Deputy Gormley or the Minister of State, Deputy Finneran. They should ensure the application of a ministerial order as soon as possible to allow the officials of local authorities to deal humanely with those who are in financial difficulties with regard to housing loans they have obtained from the local authorities.

Barry Andrews (Dún Laoghaire, Fianna Fail)
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I thank Deputy Wall for raising this important matter. First, it is important to put on record once more that the Government is extremely conscious of the high value Irish people place on home ownership. The Government has brought forward a range of measures to support and protect families having difficulties with their home mortgage payments. The single most important advice for any borrower facing difficulties in meeting repayments, whether his or her mortgage is with a local authority or otherwise, is to engage early, proactively and constructively with his or her lender to seek to achieve an agreed solution. To date there is no evidence to suggest that wider economic circumstances are creating problems specifically for local authority borrowers in meeting mortgage repayments. The local authority service indicators for 2008, published in June 2009, show local authority mortgage arrears levels running at 11.7%, a marginal increase on the level in 2007, which stood at 11.6%.

Jack Wall (Kildare South, Labour)
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In that case, the Oireachtas Library must be telling lies.

Deputies:

The Deputy knows he is not allowed to use that word.

Jack Wall (Kildare South, Labour)
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The Minister of State should check the Oireachtas Library.

Barry Andrews (Dún Laoghaire, Fianna Fail)
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Similarly, despite worsening economic conditions generally, repossession remains extremely rare for local authority borrowers, with only three repossessions carried out by local authorities last year.

Local authority borrowers have received considerable protection from the worst effects of the downturn in terms of their borrowing costs. The effective rate for borrowers has come down by 3% since October 2008 and now stands at just 2.25%. These rates represent exceptional value by comparison to rates charged by commercial lenders and at present, the local authority rate is more than 0.9% lower than the average market variable rate.

Section 34 of the Housing (Miscellaneous Provisions) Act 2009 enables a housing authority to enter into an arrangement with a household for the rescheduling of payments of accumulated arrears, including interest, due to it in respect of specified rents, equity charges and loans, where the authority is satisfied that the household would otherwise suffer undue hardship. While work is continuing on the preparation of the regulations, directions and guidance necessary to enable the remaining provisions of the 2009 Act to be commenced over the coming months, this section has not yet been commenced. However, even without the provisions of section 34, local authorities have extensive powers under legislation already in place to deal flexibly with borrowers facing difficulty in meeting mortgage repayments.

Provisions on lending by local authorities for the purposes of house purchases are set out in section 11 of the Housing (Miscellaneous Provisions) Act 1992. Where a loan stands in default, section 11(10) provides that a local authority may make such monetary arrangements with a borrower as it considers equitable to take account of the particular circumstances of the borrower. Local authorities can and do exercise the powers available to them under this section and endeavour to engage proactively and constructively with a distressed borrower with the aim of enabling a household to remain in that home. The available data strongly bear this out and suggest that repossession, where it does occur, is always a last resort.

Nevertheless, the Minister of State with responsibility for housing and local services, Deputy Finneran, is committed to supporting consistency of approach and ensuring best practice across all local authority areas. He is developing guidance based on the regulator's code of conduct to ensure that cases of local authority mortgage arrears are handled in a manner that is sympathetic to the needs of the particular household, while also protecting the position of the local authority concerned. He intends to issue this guidance in the coming weeks.