Wednesday, 21 March 2012
Topical Issue Debate
National Asset Management Agency
I thank the Ceann Comhairle for affording me time to discuss this important matter which is of topical interest to many - the need for the Minister for Finance to ensure the scales are balanced in favour of communities, as opposed to developers, under NAMA legislation, giving local authorities or groups priority in the purchase of enterprise sensitive sites and properties to enable and enhance the economic renewal of such areas which have been decimated by the actions of banks and developers. While NAMA has cash reserves of over €4 billion, the country, as we all know only too well, is bankrupt. Strangely, NAMA plays dumb when asked to account for its increasing cash pile.
Prior to the general election the Taoiseach described NAMA as a secret society. Throughout history we have witnessed the destructive power of such societies and this one seems to be able to operate with impunity. Unless there are some checks and balances, NAMA stands to lose sight of its duty to the people. I am delighted that its officials have been called before the Joint Committee on Finance, Public Expenditure and Reform to account for its stockpiling of money at a time when providing an economic stimulus should be an essential part of its remit.
NAMA's success must mean success for the country in the short term. I speak on behalf of small enterprises throughout Ireland, particularly in my constituency of Longford-Westmeath, which could become local success stories and the driving force behind the economic recovery of their communities which have borne the brunt of the economic downturn, to the detriment of every man, woman and child in them. The fall-out will be felt in towns and villages for generations to come. I am aware that in my constituency there is a groundswell of opinion that NAMA must give local authorities and groups priority in the purchase of enterprise sensitive sites and properties, the retention of which is essential for the renewal of local economies. NAMA must be seen to be supporting the shop-and-work-local principle to aid economic recovery.
While developers rode on the crest of a wave, economies were decimated and businesses went to the wall. Now the balance must swing firmly in the direction of local enterprise, with properties being sold at realistic prices to local businesses and educational and cultural entities. As small and medium concerns are the lifeblood of local economies, developers must not be given priority in the purchase of key local sites. It is strange that NAMA was set up to recover money from developers, yet, from what I hear, they are still actively buying key properties from under the noses of local groups and individuals. Recovering money for the taxpayer is commendable; however, there must be a drip to allow some of the money which has been stockpiled to feed or filter back into the economy through the provision of stimulus packages. However, NAMA seems reluctant to do this. I seek a positive response from the Minister of State.
I thank the Deputy for bringing this issue to the floor of the Dáil.
NAMA has a commercial remit under the National Asset Management Agency Act 2009 and must dispose of assets in a commercial manner in order to repay the loans it has incurred in the acquisition of such assets. However, within the legal and fiscal boundaries in which it must operate and notwithstanding its commercial remit, it plays a role in creating balanced and desirable places to live, with obvious benefits for sustainable social values. It is developing strategies to achieve its objectives, taking account of the need to contribute to the social and economic development of the State in the broader context of the National Asset Management Agency Act 2009. In doing so, it seeks to balance commercial requirements with providing for better social advances in so far as this is possible.
Within the context of its commercial remit, NAMA is at all times open to proposals and actively contributes to public policy processes, aimed at supporting the achievement of wider social and economic objectives. NAMA advises that there are wide-ranging examples of this, including through the agency's engagement with the Department of the Environment, Community and Local Government and local authorities regarding unfinished housing estates and the broader issue of social housing provision.
For example, following release of the report of the advisory committee on unfinished housing developments last June, the Minister of State with responsibility for housing established a national co-ordination committee to oversee action on unfinished estates and to monitor and drive progress. NAMA has two representatives on this committee, which meets regularly with the County and City Managers' Association.
The committee has focused its initial attention on the 243 estates categorised by local authorities as the most problematic from a public safety perspective - category 4. It is often assumed that the vast majority of unfinished estates are under the agency's control. However, only 29 - 12% - of category 4 estates are controlled by NAMA debtors or receivers. NAMA is funding, through its debtors and receivers, the cost of urgent remedial work on these 29 category 4 estates, which is estimated at €3 million, and very good progress has been made.
NAMA is also focusing attention on category 3 estates. Some 150 out of 1,500 estates in this category relate to NAMA debtors. Work is ongoing and at an advanced stage in regard to clarifying the status of each site and agreement of plans and timetables for optimum site resolution.
It is important to point out that NAMA's interest in the assets underlying its loan portfolio is that of a lender holding security rather than as an owner, except if a receiver has been appointed to a debtor or where a debtor has given express consent to NAMA. The agency is, therefore, bound by normal rules of banking confidentiality in most cases. This means NAMA, in general, will request debtors to engage directly with relevant groups in cases where a property that may be suitable for use by a public body is brought to the attention of the agency.
In exercising the commitment of the board to offer first option to public bodies, NAMA must be conscious of its overriding commercial remit, and the broader public interest also requires NAMA to maximise receipts for the taxpayer. Only a narrow sectional interest would be served by accepting a reduced price.
In December 2011, NAMA identified more than 2,000 properties as being available for social housing, representing, as the Minister for Environment, Community and Local Government described it at the time, potentially "one of the largest housing allocations made in the history of the State". NAMA is working systematically with local authorities and the Housing Agency to determine the demand and suitability for the identified properties. This work is well advanced and units will be coming on stream in the coming months.
In the context of the NAMA board's stated commitment to offer first option to public bodies on the purchase of properties which may be suitable for their purposes, the agency also advises of additional examples in terms of exploring potential synergies and delivering sites and buildings in respect of schools, health care facilities, including primary health care centres, community and recreational amenities and civil buildings. Towards this end, NAMA advises of ongoing and constructive engagement with the Departments of the Environment, Community and Local Government, Education and Skills, Health, and Arts, Heritage and the Gaeltacht, and with the universities and the HSE, with a view to identifying possible solutions for them. Examples include the provision of sites for the Department of Education and Science, UCD and UCC, and the development of a primary health care centre and ambulance station in Tallaght for the HSE. NAMA debtors are also facilitated in engaging with, inter alia, local voluntary and community organisations and sporting organisations on an ongoing basis in terms of identified land and property that may be suitable for their specific purposes.
It is clear that NAMA is making some progress in meeting the broad social and economic objectives set forth in the National Asset Management Agency Act of 2009 while continuing to seek a commercial return on the properties under its control.
I thank the Minister of State for her comprehensive reply. She referred to NAMA's commitment to offer first option to public bodies on the purchase of properties. It is important that community groups should be included where there is community involvement.
Regardless of whether we like it, NAMA is perceived as being an exercise in cronyism directed at shoring up bankers and property developers who in many cases were the cause of the current economic crisis. Perhaps the Minister of State can confirm or deny a rumour that is circulating, namely, that NAMA properties are being sold back to developers and that the very developers who were responsible for the economic downturn have a less than healthy involvement in the administration of NAMA.
It is the responsibility of every agency in the State to do what is needed to get Ireland back on the road to recovery. NAMA should be playing a greater role and it must explore ways by which it can provide finance for commercial entities and, in particular, small and medium-sized businesses as part of all our efforts to restart the economy and support jobs. It is a role NAMA should play but that is not how its actions are perceived by the public.
I particularly want to see community groups involved. The Minister of State said there was a commitment to offer first option to public bodies but community groups feel they are not getting a fair crack of the whip. In small villages and communities, the option may never arise again for them to avail of such properties if they are, in turn, off-loaded to a developer.
I again thank the Deputy for his contribution and for his constructive suggestions. I will happily pass on his comments on the inclusion of community groups to the Minister for Finance. With regard to his question on whether properties are being sold back to developers, as I said, the details of sales will not be published because of commercial sensitivities, but I am not aware of any such cases. If the Deputy has concerns, he should furnish the details to the Minister for Finance and the issue can be looked at in more detail.