Gerry Adams (Louth, Sinn Fein)
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Tá mé fíorbhuíoch seans a bheith agam labhairt ar an ábhar tábhachtach seo inniu. I am sure the Minister of State would agree that one of the biggest factors leading to the economic crash was the role played by developers and planners as well as bankers and corrupt politicians. Houses were sold at inflated prices. The hundreds of empty housing estates across the State are all evidence of the importance of Government agencies being scrupulous in how they manage housing. Each year, county councils spend substantial amounts of taxpayers' money on the purchase of properties for social housing so it is vital that there is transparency and certainty about the processes involved.

It has emerged that in 2010 Louth County Council bought two houses belonging to senior members of the council’s housing department. Moreover, a senior executive in Louth County Council’s housing department acted for the council in the purchase of his own home. When my colleague, Councillor Tomás Sharkey, and others raised this issue, they were told by the council that at all times proper processes and procedures were followed to ensure full compliance with all the relevant control mechanisms that govern housing acquisitions. They were also told that staff are not excluded from the housing acquisitions programme. Could the Minister of State tell us if proper processes were followed in this instance? Does she believe that proper processes were followed if the person selling the house to the council was also the person buying the house on behalf of the council? Will she urgently review the situation and if necessary clarify for local authorities the regulations surrounding the sale and purchase of housing by councils from staff?

Dessie Ellis (Dublin North West, Sinn Fein)
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Over the years we have had many issues with planners and planning. Inquiries and investigations have been carried out and hundreds of millions spent on tribunals with little or no return or convictions. Of course I do not for a moment suggest that the issues I raise are in the same category but, nonetheless, they are serious.

This issue has been brought to my attention and that of others, including the local media. The Dundalk Democrat and Councillor Tomás Sharkey have done much to expose it. The purchase of private homes by local authorities has been an integral part of how we deliver social housing and meet mounting housing need in this State. At the height of the boom, Louth County Council bought 18 homes of which two were from their own staff. That is an obvious conflict of interest.

While it might not always be negative, the potential for corruption is too great to allow it to happen.

The two homes in question belonged to senior executive officers in the council. Each recommended the other's for purchase. This, in itself, is an obvious problem but it goes further. One of the properties has serious questions over its suitability. A three-bed bungalow in Tullagee, Knockbridge, purchased for €137,500, had no building energy rating, BER, when signed off for purchase. When a BER analysis was carried out, it received an E1, which is very low. Thus, the house is not suitable for a council to be purchasing.

When a tenant was moved in, they were unhappy with the insulation and requested to be moved as it was too cold. The council then applied for and used significant funding from the SEAI to upgrade the home to make it suitable for occupation. That is further taxpayers' money to upgrade a home that should not have been purchased in the first instance given its condition.

There are further questions over rumoured inspections that yielded negative reports on the home before and after purchase which are now missing or unavailable. The owner of the property, in his capacity as an executive officer, wrote to solicitors confirming the property had been inspected by a clerk of works and that the "structure is in order". A response from the council stated:

The house was inspected by the Clerk of Works on December 1, 2010 and a detailed inspection form completed. This outlined various defects and areas in need of upgrading, including insulation, but attested to the structural integrity of the property.

After it was occupied for a time by a local authority tenant, additional works were carried out to address heat loss from this property.

Jan O'Sullivan (Limerick City, Labour)
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I thank Deputies Adams and Ellis for raising this important matter. I share the concern expressed by both Deputies that where allegations are made with regard to a conflict of interest by public servants in discharging their official duties, this has the capacity to undermine public confidence in the service and the way public money is spent and accounted for. There are robust legislative procedures in place under the Local Government Act 2001 and the Ethics in Public Office Act 1995 which set out the requirements on declarable interests and the conduct of public servants in exercising their functions. There are no exceptions to these requirements. I can certainly provide them in response to Deputy Adams's request.

New social housing supply is delivered through a range of measures under my Department's social housing investment programme, SHIP, including the construction and acquisition of social housing units directly by local authorities and by approved housing bodies, the social housing leasing initiative, the capital advance leasing facility and the rental accommodation scheme.

Louth County Council acquired 18 housing units within its administrative area during 2010 as part of the work programme financed under my Department's SHIP. I now understand that two of these were in the ownership of council employees, as indicated by the Deputies.

In 2010, when the units in question were acquired, local authorities had delegated sanction to acquire housing units. This delegated sanction applied where both the numbers of units and funding available for the acquisition programme had been agreed with my Department. My Department does not have a role in the selection of particular properties for acquisition by a local authority and would not, at any time, be aware of the identity of the vendor.

When identifying acquisitions, housing authorities are required to ensure that all the relevant issues are considered, including tenure mix and estate composition, specific local needs and that the acquisitions are appropriate for the purpose of social housing and the authority's management of its stock in so far as identified housing needs in its area are concerned. Housing authorities are also required to achieve best value for money in the acquisition of properties. It is an absolute requirement that the local authority obtains an independent valuation of each property by a suitable qualified person. I understand this requirement was adhered to in both these cases. If there is information to the contrary, I will be happy to receive it.

The matter of the alleged conflict of interest was brought to the attention of my Department in September. Following this, my Department was in touch with senior management in Louth County Council and requested a report on the alleged conflict of interest by council officials in the procedures leading to the acquisition of two properties. The county manager subsequently commissioned an independent firm of auditors and risk-assessment managers to undertake a comprehensive review of the council's social housing investment programme in 2010, including the acquisition of 18 properties and, in particular, the procedures that applied in the case of the purchase of the two houses owned by local authority employees. I understand that the review process is almost complete and that the independent consultants will report to the county manager very shortly. In fairness to all concerned, I do not propose to make any further comment on the issue until such time as I have considered the findings of the report and the views of the county manager.

Gerry Adams (Louth, Sinn Fein)
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I thank the Minister of State for her answer. I appreciate entirely and accept her point that she does not propose to make any further comment until the report and views of the County manager have been supplied to her and she has had the opportunity to consider the findings. That is only fair to those involved. I just want to make a broad point, that is, that the code of conduct for staff contained in the Local Government Act 2001 states employees should not negotiate or arbitrate in any matter affecting a contract with a local authority or the purchase from, or the sale of goods to, a local authority where, in their private capacity, they are involved in the company or body concerned. This is one of the criteria according to which we need to judge the report when it comes forward.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank the Minister of State for her response. We all await the views of the county manager in respect of the audit. I fear that we have seen more of this activity in other councils. The matter in Louth has been brought to our attention. I am not saying for one minute that what was done was wrong to the extent that there was very serious intent but I fear there could be other cases in smaller local authorities. There should be an independent way of assessing staff. There may be only three or four in an office, and they should not be making judgments, especially if their property comes up for consideration.

We should be examining further the suitability of the properties. Rules are laid down but I wonder whether Louth county council examined the matter properly. It gave one of the houses a low rating but still purchased it, costing the State an awful lot of money. We should be taking photographs of the properties, internally and externally. That would give us a better idea as to their condition. This is not done, although it has been done in respect of planning. If it were done at the time of purchase, it might represent a way forward in the determination of suitability at a later date. The clerk of works has a big role.

Jan O'Sullivan (Limerick City, Labour)
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It is essential that the public have confidence in how public officials carry out their duties and that that their activities are in accordance with the law. Deputy Ellis is concerned about practices in other local authorities. With regard to my responsibility, my Department will issue a letter to reach director of housing requesting full compliance with all the requirements where a potential conflict of interest might arise in any area where public money is spent. This is especially important in the awarding of contracts and the leasing or purchase of properties by the local authority. The issue as to whether the BER was essential in 2010 is one of the issues that would now have to be raised. The rules should be pointed out clearly to the local authorities. If the review made available to the county manager makes recommendations, I will certainly consider them and act appropriately.