Larry Butler (Fianna Fail)

I welcome the Minister of State to the House and welcome the new legislation which is long overdue and will reform how local authorities operate.

I am glad the 2008 programme remains intact. However, as Senator Coffey stated, we do not know what might occur after 3.30 p.m. today. I welcome the Minister of State's announcement in respect of the €74 million for affordable housing; €51 million for rental accommodation, which is vitally important; €40 million for Traveller accommodation which will assist people at the lower end of the market; €290 million for voluntary and co-operative housing with 100% grants and, the €1 billion for local authorities in respect of social housing provision. I worry about the capacity of local authorities to deliver this type of development. The Minister of State should consider their capacity to do what is required.

I welcome the €199 million for regeneration in places such as Sligo, Cork and Limerick under the public private partnership schemes. With the downturn in the economy it is essential funding is spent sensibly and efficiently. The Minister of State said we must ensure more efficiency in the provision of services, which is vitally important, and that we must ensure there is better management of county council housing stock. He also stated that such funding may not be spent to compensate for poor local management. I know that previously my council had to return unspent funding and I do not believe this is acceptable any more. It is right and proper that we introduce new measures for regulation of local authorities.

Currently, when a house which has been upgraded is returned to a council, the council is required to return that house to its original state. That is a waste of money. It is no longer acceptable. There are in excess of 3,000 houses vacant in the Dublin City Council area and 5,300 houses vacant countrywide. While some of these units may be vacant as a result of regeneration schemes, this and future governments will be required to invest a couple of billion euro in the housing sector. We cannot continue in this way. The Minister of State should consider carrying out an audit in this regard.

We need to adjust to the new situation and to ensure we do better; to retain the skills currently available to us in the construction industry and to recommence community employment schemes and the housing refurbishment scheme. Also, county councils must ensure efficiency. I mentioned previously that much of the work undertaken is being duplicated. We must improve the turnaround time in respect of the provision of council houses. The current surplus in construction capacity provides us with an opportunity to utilise excess labour in the renovation of these houses.

We must fast forward the national development plan and move construction industry resources from speculative development to social and affordable development. The current situation in the construction industry provides us with the manpower to do this. Provision is made for local authorities to engage contractors in respect of waste and water management and in designing and maintaining major projects. They could be permitted to do likewise in respect of housing provision. This would ensure more efficiency in this area. Often, a full year has passed before planning permission is agreed by a county council. It takes a further six to eight months for contracts to be agreed. This means it is often two years before a development commences. One cannot deliver a housing programme with inefficiencies like this.

Access to credit plays an important part in the construction industry. Access and low interest rates were the key drivers of the sustained boom we witnessed in recent years. There is an opportunity in crises. For example, one bed apartments which cost €310,000 are now being advertised for sale at €245,000. This provides young people with an opportunity to get on the housing ladder, despite the tighter controls in respect of access to credit.

It is important people do not find themselves in the position of not being able to pay their mortgages. It is important we put in place incentives to encourage house buyers, who are currently sitting on the fence, to get back into the market. Some 700 to 800 house sales are being held up as a result of poor conveyancing. This issue should be examined. The council should look to the local solicitor if it cannot complete the conveyancing work itself. There is also an opportunity for an increase in the availability of credit through the Housing Finance Agency. We should allow the agency to play a key role in terms of credit.

At a time when extra labour is coming on stream, more than 90% of Irish houses do not meet energy standards. According to an EU directive, we must tackle this. We should make use of spare construction capacity and encourage people to bring their homes up to the required energy standards. Other countries, such as Canada and Germany, have already done this. We should target the lower paid and people who would not otherwise be able to do this work with special grants which will prevent their becoming energy-poor. We should also allow private occupiers an income tax advantage for employing registered construction firms to upgrade their homes. This will represent a definite return on investment for the Government and could be a neutral expenditure if carbon taxes are introduced and the resulting funds reinvested into this green collar sector. This sector will play an important role in job creation. The Commission on Taxation is currently investigating the possibility of carbon taxes. This was promised under the Programme for Government and I hope the commission will examine my suggestion as soon as possible.

It is expected that in the future, green collar workers will outnumber workers in many other areas of employment. FÁS, the CIF, Enterprise Ireland and all other partners must come together and create awareness of this new job creation opportunity. I support the introduction of grants for home owners to invest in improving the energy rating of their homes by installing energy-saving solutions. The VAT return to the Exchequer would support any investment in the future.

The Government's greener homes scheme, operated by Sustainable Energy Ireland and costing €27 million over five years from March 2006, saw 20,500 people apply for grants to install wood, solar and thermal heating. So far, 12,300 installations, including 4,300 wood pellet boilers, 4,700 solar thermal units and 3,300 heat pumps, have been approved. Thus, there is considerable opportunity within the present market. I am glad the Minister has ensured that the 2008 programme is in place and that we can ensure we deliver social and affordable housing to the people who require it.