Tuesday, 6 December 2011
Local Authority Housing
It is not often I have the Chamber to myself and the Minister of State. The issue I wish to raise is one about which I have been concerned for a long time, namely, local authority tenants having difficulties with rents. Many of these tenants may be poor at financial management. Local authorities are stretched in regard to the need for cost efficiencies and managing resources. I am proposing and hoping that the Government will help local authorities and tenants in a very practical way. I am proposing that where there are issues in regard to the collection and payment of rents for social housing by tenants, a system of deducting rents at source be introduced. This would have great benefits in that it would assist those who are poor at budgeting and money management to ensure that at least their rent is paid on time. Second, such an arrangement would ensure that the finances of the various local authorities throughout the country are protected and that when somebody falls into arrears, there is a strategy that can be adopted. Third, it would ensure a reduction in man hours in terms of collecting rents. Fourth, while most people who fall into arrears are genuine, there is a cohort who simply do not want to pay rent. Such abuses of the system are taking place in Clare, as I am sure they are in Sligo, Kerry and everywhere else. The arrangement I have proposed would deal with this problem. The Clare county manager told me recently that some tenants have put it to him that they will continue not to pay their rent safe in the knowledge that the council's only recourse is to put them out on the side of the road and thus create further social difficulties. These people know their local authority will not do that.
The most practical and sensible solution to this problem is a system whereby people experiencing difficulties in meeting their rent payments, whether as a consequence of poor money management, limited resources or whatever, will have their rent deducted at source. Paying rent is part of one's responsibility as a local authority tenant. Even in these tough times we should bear in mind that local authority rents are assessed as a proportion of income, usually at something like 27%. There are bad apples in the system and others who get into difficulty through no fault of their own. It is incumbent on us to assist those who have difficulties with money management in order to ensure they at least have a roof over their head.
I thank the Senator for raising this important issue. Since 2005 rent supplement expenditure has increased from €369 million to €516 million in 2010. The number of persons claiming the allowance increased from almost 60,200 in 2005 to more than 96,100 as at mid-November 2011, a 60% increase.
The household budget facility operated by An Post on behalf of the Department of Social Protection already allows certain customers to pay regular amounts towards various household bills, including local authority differential rents, by direct deduction from their social welfare payments. This will be a vital facility for local authorities when they take over responsibility for providing for the housing needs of long-term rent supplement recipients.
On 16 June 2011 the Minister for the Environment, Community and Local Government and the Minister of State with responsibility for housing published a new housing policy framework statement. This statement, which reflects the content of the programme for Government, sets out the principles to underpin the development of housing policy into the medium term. Specifically, it provides for the transfer of responsibility in providing housing needs for long-term rent supplement recipients to housing authorities on a phased basis.
A multi-agency steering group has been established to develop proposals to give effect to this transfer. The group consists of representatives from: the Departments of the Environment, Community and Local Government, Social Protection, and Public Expenditure and Reform; the County and City Managers Association; and the Housing Finance Agency. Its remit is to finalise proposals and operational protocols for the transfer of responsibility from the Department of Social Protection to housing authorities for persons who have long-term housing requirements, that is, those in receipt of rent supplement for more than 18 months. This will help to achieve the key Government commitment of removing barriers to employment while at the same time returning rent supplement to its original purpose as a short-term income support payment for those temporarily unemployed.
An issue being considered by the steering group is the current arrangements in regard to the deduction of the local authority differential rent from a person's social welfare payment. At present this arrangement can be terminated by the tenant without either the agreement of, or prior notice to, the local authority. This creates a degree of financial uncertainty for local authorities which must be resolved.
I am sure the issue raised by the Senator will be a matter for serious consideration by the steering group. His proposal makes sense and, as such, I am certain it will be given due consideration by the Government in the context of its review of the steering group's recommendations.
I thank the Minister of State for his response. I understand this issue is not within his remit. I would have liked the Minister to come to the House in order to indicate a clear timeframe for this. We need a common sense approach to these matters. In fairness to the Minister of State, Deputy Perry, he shows that all the time in the work he does. In this case, the common sense approach is that when people are experiencing difficulties in making their rent payments, those payments should be deducted at source. I would go so far as to say that people in receipt of social welfare who are in local authority housing should have their rent deducted from their welfare payment. Such an approach has the benefit of an administrative saving by removing the need for the collection of rent. It makes sense to do so in this time of information technology and advanced communications. Nor is it a case of the State taking something from people to which it is not entitled. As we seek to ensure a general provision of high-quality local authority accommodation, we should also be moving towards a paperless system where rents are collected by electronic means.
My greatest concern is that by the time the programme for Government comes to its conclusion in four and a half years, we will still be in the same situation. Will the Minister of State send a note to the Minister for Social Protection alerting her to the need for a timeframe for action in this area?
I will raise this matter directly with the Minister. It is a vital issue in terms of streamlining local government and making it more efficient. The information technology and software capacity is already there in many instances. A mandatory deduction would be helpful in terms of safeguarding the income streams of local authority housing sections and would facilitate greater efficiencies in terms of the management of finances locally. I am sure the Minister for the Environment, Community and Local Government, Deputy Hogan, and the Minister for Social Protection, Deputy Burton, will not put this issue on the long finger. I will convey the Senator's concerns to the Ministers and ask them to respond directly to him with regard to a timeframe for implementation. I am sure the county managers would be very much in favour of this.
As the Senator said, there are some people who cannot pay and others who do not want to pay. It is a matter of ensuring the correct balance. This is a timely proposal and I assure the Senator I will convey his concerns to the Ministers concerned. From an efficiency and corporate governance perspective, it is a win-win situation.