Seanad debates

Thursday, 17 October 2013

Adjournment Matters

Pyrite Remediation Programme Implementation

1:45 pm

Photo of Paddy BurkePaddy Burke (Cathaoirleach of Seanad; Fine Gael)
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I welcome the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, to the House.

Photo of Averil PowerAveril Power (Fianna Fail)
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I welcome the Minister for the Environment, Community and Local Government, Deputy Hogan to the House. It is very unusual for three senior Ministers to take Adjournment matters in the House. I hope that it is an indication of things to come. It is very positive.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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Has this never happened before?

Photo of Averil PowerAveril Power (Fianna Fail)
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I do not think so. It has not happened on any day that I have been here that a Minister has come in to take his or her own matter.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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That did not happen when I was in the Seanad.

Photo of Averil PowerAveril Power (Fianna Fail)
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I welcome the announcement yesterday of an initial €10 million fund to kick-start the pyrite remediation scheme. It will come as a huge relief to people who have not been able to repair their homes and have waited a long time for a solution to be agreed at a national level. I am disappointed that the Government has not been able to secure a levy on the industry yet. I hope the issue will be revisited after the various court cases conclude. It is only right that the industry pays its fair share rather than the burden's falling on the taxpayer.

I commend the Government on moving to put the remediation scheme in place and acknowledge the work the Minister and the former Minister of State, the late Deputy Shane McEntee, did on this issue over the past couple of years to bring about a solution. I am, however, very concerned that the scheme will not provide any compensation for people who have had to repair their homes themselves before now. While some developers carried out pyrite remediation works on the properties that they built, others have refused to do so. Many families have had to pay for the work themselves. Some have spent over €30,000 or €40,000 on tests to identify the extent of the problem, on the physical repair works, on temporary accommodation and on storage while their homes were uninhabitable. That is a huge sum of money for any family to have to pay. As Sandra Lewis of the Pyrite Action Group pointed out yesterday, homeowners in their thirties could do this only by re-mortgaging or borrowing to pay for that work. Older couples had to dip into their life savings to fix their homes. It was not that these people could afford to pay for that work. In many cases it was that they simply could not afford not to do it because their homes would have been uninhabitable otherwise. It has taken many years, as the Minister knows, to bring about a solution.

I know that when the Minister was asked yesterday why these homes were not covered by the scheme he said people should take cases against developers to get the money back but for many that is not realistic because many developers have gone out of business and been declared bankrupt, and it would be futile for those families to chase somebody from whom they have no realistic opportunity of recovering money.

While I welcome the scheme I think it is unfair that those families have been excluded. The same families were denied an exemption from the local property tax. I communicated earlier this year with the Minister for Finance, Deputy Noonan, on behalf of several families who, because they had paid for the remediation work themselves before the property tax exemption came in had to pay the full property tax. They pointed out to me that other families who had the work done a couple of months later would not have to pay the property tax and will now have the works paid for too.

Will the Minister extend the scheme to provide compensation for people who really had no choice but to carry out the work themselves before now? Will there be enough money over the next couple of years to pay for this work? I understand that the Minister indicated yesterday that the €10 million is initial funding and that more is expected over the next two or three years but I did not see a figure for what exactly the Minister intends to be put in place, or indeed, if there is any agreement in the Department of Finance about funding for the following years. The Minister is aware that there are some indications that it could cost up to €50 million. The funding announced yesterday seems to be just for the 1,000 homes in the red category, those which are worst affected. It has been estimated that up to 12,500 homes could be affected by pyrite. Will there be enough money to cover everybody who has been affected? When will the necessary legislation to establish the Pyrite Resolution Board, PRB, be brought before the Oireachtas?

The Leader of the House indicated yesterday that he had spoken to the Minister and that the Minister had indicated that he might bring the Bill first to the Seanad. Can he indicate when that might occur because I understand that the board needs to be put on a statutory footing before it can start to make payments? Finally, have plans to levy the industry been shelved altogether or do the Minister and the Government intend to revisit the issue after the relevant court cases have concluded?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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If I had known that all those questions would be asked I would have been better prepared to answer them. I will try my best.

The Government has approved initial funding of €10 million for a pyrite remediation scheme, with additional funding to be allocated over the next two years from the capital stimulus programme which will be announced in early 2014. The initial phase of the remediation programme will deal with circa 1,000 houses which it is estimated are in need of immediate repair, and will be delivered under the auspices of the Pyrite Resolution Board. The legislation to put this into effect will be enacted before the end of the year and will commence in the Seanad. The post-2015 funding position will be dealt with having regard to the position at that time and developments in the meantime.

This is not a compensation scheme; it is a scheme to remediate homes which have significant pyritic damage and where the homeowner has no other viable means of redress and can establish this to the satisfaction of the Pyrite Resolution Board. The terms of the scheme require prior approval and the scope of the scheme is limited to dwellings which have significant pyritic damage as defined in the Irish Standard 398-1:2013 Reactive pyrite in sub-floor hard-core material. As it is a targeted scheme and requires prior approval, it follows that the terms of the scheme cannot be retrospectively applied and this is in line with how schemes generally operate. There is always a cut-off point for new schemes.

While I have stated on many occasions that the State is neither culpable nor liable for the pyrite problem, nonetheless the Government has, in the public interest, decided that solutions should be provided for that group of homeowners whose homes have been significantly damaged by pyritic heave and who have been left with no viable means of redress. The terms of the pyrite remediation scheme, already published in outline by the PRB, will not be affected by the new funding arrangements which will have other advantages and enable the PRB to have the programme implemented in a more direct and efficient manner, now that the taxpayer is funding it directly.

I am acutely aware of the long delay that many affected homeowners have had to endure waiting for solutions to the pyrite problems in their homes. The purchase of a home is likely to be the largest single investment most people will make in their lifetime and they have a justifiable expectation that their home will be a place of enjoyment for themselves and their families for many years. I am reforming the building control regime which has left a Celtic tiger scar on many people with problems in their homes, not least in Priory Hall but also with pyrite and in unfinished estates. However, for homeowners affected by pyrite, living in their homes has not turned out to be the enjoyable experience they had hoped for.

I understand how these situations have developed and I will pursue, once the court cases are finished opportunities and solutions to see how we can extract some financial assistance and redress from the builders and developers who caused this problem. Much remediation of homes has already happened because people had insurance or the developers and builders who were involved in the scheme and raised the possibility of assistance with them personally have dealt directly with certain homeowners in order to reduce the impact. Hundreds of homes have been remediated in this fashion. The new pyrite remediation scheme will help 1,000 householders over the next two years. I am implementing a scheme where my predecessors looked on and did nothing.

Photo of Averil PowerAveril Power (Fianna Fail)
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The Minister is right that some of the homes that were fixed by the developers were covered by insurance but as he knows well many were not. Some families that have been in touch with me told me how the insurance covered the building works but would not cover the testing which costs €3,000 and they were left to pay that bill. Nobody suggests that the State should reimburse people for work that has already been covered by a builder or insurance policy.

The problem is that there are families who are in extra debt because they had to do the work, not because they could afford to do it or because it was easy for them. They had to remortgage their home or take out other loans to pay for it. It is unfair that such families will not be covered by the scheme. I urge the Minister to revisit the issue in advance of the legislation being drawn up. I will make the point, as will colleagues on all sides, when the legislation comes before the House.

I welcome the Minister's commitment to revisit the levy when court cases are concluded. That is important. If there is any way of recovering some of the money for the taxpayer it should be done. The other issues I raised are all questions that have been asked publicly in the past 24 hours since the scheme was announced. If the Minister is not in a position to answer them now he might correspond with me in writing.

1:55 pm

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I answered the questions about the legislation coming before the House and the possibility of levying the construction sector and developers after the court cases are finished. To what other questions does the Senator refer?

Photo of Averil PowerAveril Power (Fianna Fail)
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The Minister did not indicate when the legislation would come before the House.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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This session.

Photo of Averil PowerAveril Power (Fianna Fail)
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Does the Minister mean this winter session or this year?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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The legislation must be enacted between now and the end of the year.

Photo of Averil PowerAveril Power (Fianna Fail)
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Does the Bill have to be enacted between now and the end of 2013?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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Yes.

Photo of Averil PowerAveril Power (Fianna Fail)
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I appreciate that. The Leader indicated yesterday that the Bill would come before the House early next year but it will be before the end of December. That is helpful. I thank the Minister.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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It is worth indicating to Senator Power that I am implementing a scheme which her party ignored for so long.

Photo of Averil PowerAveril Power (Fianna Fail)
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The Minister made the point previously.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I wish to make it again because it often falls on deaf ears. It is one of the scars of the Celtic tiger that I must address.

The Seanad adjourned at 2.10 p.m. until 2.30 p.m. on Tuesday, 22 October 2013.