Joan Collins (Dublin South Central, United Left)
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This is a proposition from the Irish League of Credit Unions that has been with the Minister, Deputy Kelly, since before the budget on 29 September. It proposes to invest in a State-owned financial vehicle which would on-lend to approved housing bodies to fund the development of social housing. The key benefit arising for the credit union movement from this proposition is that it would enable the movement to put a significant portion of the members' funds of €8.5 billion into social housing. If I were the Minister and I had heard that on 29 September, I would have been on to the Irish League of Credit Unions immediately to invite its members to my Department to discuss how we would do this. One billion euro would build nearly 7,000 homes. Seven billion euro would build 45,000 homes in a short period of time if that money were invested immediately. We are supposed to be in a housing crisis. The Minister has called it a humanitarian crisis, yet for over three weeks, and with no announcement in the budget, there has been the possibility that credit unions would fund or in some way assist the Government in regard to social housing.

The credit unions said they got an acknowledgement from the Minister, Deputy Kelly, on 2 October. They sent the proposition to the Minister of State present, Deputy Coffey, on 2 October, who said he would review it and would like to meet with them. It is phenomenal to think that this proposition from the credit union movement, which has the funds - particularly in view of the Minister's statement that this was part of his housing policy, when he said he would be looking for private funding, including from the credit unions - has been sitting on his desk for the past three and a half weeks, and that the credit unions have not even been contacted.

Thomas Pringle (Donegal South West, Independent)
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I thank the Ceann Comhairle for selecting this Topical Issue because it is very important. The credit unions have been established since the 1960s and there are more than 354 credit unions across the country. Fewer credit unions were baled out during the financial crisis than banks. Currently, the credit unions have €8.5 billion on deposit with the banks, which they are not allowed to lend out under Government policy. That is providing liquidity for the banks but giving a very low return to the credit unions and their members.

When the housing strategy was launched, the Minister, Deputy Kelly, stated that the funding of the housing programme would require the development of innovative funding mechanisms that do not increase the general Government debt. On his desk is an innovative funding mechanism from the credit union movement representing millions of people across the country with funds that they are ready, willing and able to invest in order to achieve a return for their members.

The credit unions have said they could invest up to €2 billion in a special purpose vehicle that could lend money on to local authorities or approved housing bodies, whichever the State would require. That would go a long way towards helping to solve the housing crisis. It would also provide the credit unions and their members with a better return on their investments, and would ultimately assist people who are already members of credit unions and ordinary citizens across the country. That would lead to an easing of the crisis, which I believe has developed through a lack of Government policy. It is a deliberate crisis rather than a crisis that happened because of something over which we have no control.

This proposition is part of the solution. It is a matter that should be addressed urgently in the Department. I urge the Minister to get back in contact with the Irish League of Credit Unions, engage in that dialogue and make this happen very quickly.

Paudie Coffey (Waterford, Fine Gael)
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I welcome the opportunity to discuss this important matter in the Dáil, and I thank both Deputies for raising it. I am happy to make a statement to the Dáil. I agree that we need to look at how the credit union movement can be facilitated in providing financial investment into social housing. I particularly acknowledge the willingness and eagerness of credit unions to do so. As we all know, credit unions play a vital role in the social and economic infrastructure of this State. The credit union movement has 2.89 million members and over €13 billion in assets.

The Deputies are right. Recently, I received a detailed proposal from the Irish League of Credit Unions setting out a means by which funding could be provided to approved housing bodies by credit unions for the development of social housing. The proposal is comprehensive and contains some progressive and imaginative ideas. It is currently being examined in my Department, and I look forward to further engagement with the Irish League of Credit Unions on the issues addressed in its submission.

When the Government launched the Social Housing Strategy 2020 less than a year ago, we made clear that the State should have a central and significant role in the provision of social housing. We also made clear that we need to look at new ways of funding social housing. While we are currently witnessing significantly increased levels of State investment in social housing, the scale of the challenge we face is also substantial.

As the strategy acknowledges, the Government is committed to putting in place mechanisms that are capable of raising additional finance in a sustainable manner and which can be used to drive, plan and co-ordinate the provision of new social housing projects. The strategy includes a commitment to commence work on a financial vehicle to be known as the strategic housing fund whose purpose is to raise funding for the social housing sector. Work on the development of this new funding model is under way in my Department. This work is being progressed under the oversight of a group known as the finance work stream. This comprises of a range of key stakeholders, including the Housing Finance Agency, the National Development Finance Agency and the Departments of Finance and Public Expenditure and Reform. The aim of this work is to deliver a new funding source for social housing. The intention is that this new source of funding will enable approved housing bodies to deliver more housing from scarce Exchequer resources. In simple terms we are looking to facilitate investment in social housing that does not impact on the general Government balance.

Arising from the opportunity offered by the strategy, a range of developers, investors, financiers and others expressed interest in being involved in the provision of social housing. A protocol was put in place in March of this year under the auspices of the finance work stream to facilitate individuals and entities seeking to engage with the State to provide investment for the delivery of social housing. A single point of contact for submitting proposals was established. The social housing proposals clearing house group operates through my Department under the oversight of the finance work stream. To date, 24 different proposals have been received and 20 of the proposers have presented their ideas to the group. The clearing house group is in the process of concluding its work and bringing forward further recommendations.

The submission from the Irish League of Credit Unions is in addition to these other proposals. It is a timely intervention that sets out how the Irish credit union movement could create a dedicated funding vehicle to provide finance for social housing in line with the aims set out in the social housing strategy. Two possible models are proposed. The first would provide for investment to be made in a State-owned financial vehicle which would then lend to approved housing bodies to fund the development of social housing. The second model sets out a scheme whereby credit unions would invest and then lend directly to the approved housing bodies. It is envisaged that the investment provided in this way would not impact on the general Government balance. This point needs to be tested and examined in greater detail, a process currently being led by my Department.

From the Government's point of view, the fact the credit union movement is willing actively to seek a role in financing the delivery of social housing is welcome. We need to use every available resource and funding mechanism to provide housing in areas that require it most and we need to do so as quickly as possible. I therefore welcome the opportunity to debate the matter publicly and I look forward to further engagement with the Irish League of Credit Unions on its submission.

Joan Collins (Dublin South Central, United Left)
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I thank the Minister State for his reply. This is the first time we have seen these proposals and strategies and reference to the clearing house group. We are open to a real and genuine discussion rather than simply eight minutes during Topical Issue matters today. I would welcome it if the Minister of State brought all these proposals to the Dáil and contacted the Irish League of Credit Unions quickly. Changes will have to be made in respect of registering, and the credit union guidance notes would have to be amended to allow this to happen. We need to move quickly on the matter.

I meet one or two families every week who face eviction through no fault of their own and subsequently find themselves homeless. If they thought we were sitting on money like this rather than urgently using it to build social housing, we would have to be ashamed of ourselves and those in the Government would have to be ashamed of themselves too. I would welcome a proper debate on all the proposals the Minister of State has put forward. That should include exactly how much social housing we can build and how quickly we can build the units in all the areas where they are needed.

Thomas Pringle (Donegal South West, Independent)
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On first reading, the response of the Minister of State looks rather promising in respect of the proposal from the credit unions. When we examine it a little more closely, however, it is somewhat concerning, in particular in the use of language. The social housing clearing house group smacks to me of the banks and the clearing house work that banks undertake. There is a concerning sentence in the reply of the Minister of State, " The clearing house group is in the process of concluding its work and bringing forward further recommendations." The Minister of State goes on to say that the credit union proposals are outside any of the proposals that have gone to the clearing house group. To me, that does not augur well for the future of the proposals. Will the credit unions get to present to the clearing house group before the group concludes its work? Will their proposals be given serious consideration?

Paudie Coffey (Waterford, Fine Gael)
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Deputies need not be so cynical. I assure the Deputies that the Government is treating this as a matter of major priority in terms of finding all the resources and finance we can make available to invest in social housing. We have put on the public record our strong commitment. We have underpinned it by budgetary commitments and the rolling out of an ambitious social housing strategy. In fact, local authorities and approved housing bodies are struggling to keep up with it, such is the demand that exists and such are the resources being provided. We have provided more than 300 staff for local authorities to assist in the provision. The challenge lies in the delivery of social housing. The finance, ambition, strategy and objectives are very clear.

The clearing house group has nothing to do with the banks. It is made up of officials in the Department of the Environment, Community and Local Government supported by officials from the Housing Finance Agency as well as the Department of Public Expenditure and Reform and other Departments. Its function is to stress test the proposals to ensure the taxpayer gets the best value for money in respect of the submissions. Some of these submissions will not fly at all, as it were. They will not represent good value for money for the taxpayer, but others possibly will. The job of the clearing house group is to analyse and stress test them, after which the proposals with potential will be progressed as soon as possible.

I note some of the specific points raised by the Deputies. The Irish League of Credit Unions in its submission has made a specific request for regulatory change . It has requested that the Central Bank amend its 2006 guidance note for investments to allow credit unions to loan money to approved housing bodies for property schemes. I am mindful of the independence of the Central Bank and Deputies should be as well. Officials in my Department are in contact with their colleagues in the Department of Finance to consider the potential regulatory and legislation changes that are needed as well as the implications. This is not something that can be done overnight.

Joan Collins (Dublin South Central, United Left)
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It can be.

Paudie Coffey (Waterford, Fine Gael)
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However, it is something we are willing to engage with to try to progress as soon as possible.

I welcome that the Irish League of Credit Unions recently made a substantial proposal to my Department. We will work with the league to try to advance this as soon as possible. For the sake of the taxpayer, however, any proposals must be correctly analysed, stress tested and proofed to ensure good and practical delivery in respect of what they set out to do.