Seanad debates

Wednesday, 27 March 2019

Nithe i dtosach suíonna - Commencement Matters

Home Loan Scheme

10:30 am

Photo of Victor BoyhanVictor Boyhan (Independent)
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I welcome the Minister of State, Deputy Cannon, to the House. I will be brief. This matter relates to the Rebuilding Ireland home loans scheme, of which the Minister of State will be fully aware. He will also be fully aware of the controversy around it.There is an element of misunderstanding or misinformation out there. It is important, therefore, that clarification is provided on the current status of the Rebuilding Ireland home loan, which is a very effective and important scheme. It is one of the many initiatives we need to address the issue of providing housing, including affordable and social housing. There is a broad spectrum of routes that must be pursued. There is no one-size-fits-all solution but this is a particularly good scheme that I welcome.

I hope the Minister of State will be able to clarify some issues related to the status of the initiative. An internal document released by the Department of Public Expenditure and Reform to "Morning Ireland" under freedom of information legislation revealed that the scheme had been put on hold because it had run out of funding. That was subsequently denied but I have seen documentation that confirms that is the case, so I do not think that is in dispute. In the Dáil recently, the Minister indicated that he was seeking a second tranche of funding to address these issues, which I welcome. The Taoiseach confirmed in the Dáil that 575 people had availed of the scheme. A further 1,000 applications had been approved but funding had not been drawn down. There may or may not be issues with some of the 1,000 applicants concerned. I have been in touch with a number of local authorities, five of which have confirmed that they have run out of money. That is not to say that the scheme has ended. However, the capacity of local authorities to grant further funding is on hold until there is clarification. That is somewhat different from saying the scheme is closed, which is encouraging.

I ask the Minister of State to set out how the negotiations with the Department of Public Expenditure and Reform are proceeding and how it is intended to bring this scheme back into line. When that information is crystallised and clear, can a new public awareness and information campaign be launched to provide clarity, encourage people and ease their fears? This is an important initiative because it offers some people the only chance they will get of acquiring a home. I know the Taoiseach is conscious of people getting up early in the morning, putting their shoulder to the wheel and doing a day's work. These are people who want to purchase a home. They want to provide a home for themselves and their families. We should pursue this scheme but it would be helpful to get clarification about its future funding.

Photo of Ciarán CannonCiarán Cannon (Galway East, Fine Gael)
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I thank Senator Boyhan for raising this issue and quite rightly seeking to bring additional clarity in an area that might need more clarity. When the Rebuilding Ireland home loan was initially being developed, it was estimated that the drawdown of loans under the scheme would be approximately €200 million over three years. However, thankfully, the scheme has proven to be far more successful than originally anticipated. Officials from the Department of Housing, Planning and Local Government have kept the Minister informed regarding the progress of the Rebuilding Ireland home loan on a regular basis and have been engaging with officials from the Department of Public Expenditure and Reform regarding the scheme since October 2018 when it became clear that the rate at which loans were being approved was higher than was originally anticipated, thus highlighting the success of the scheme. The Minister had made a commitment on launching the scheme that he would seek further funding for it at an early stage, if necessary, given his belief in its potential. By the end of January, €106 million had been drawn down, which accounted for some 53% of the available funding, at which point €66 million would have been more consistent with the expectation of funds being drawn down over a three-year period.

The Minister informed the Dáil on 29 January 2019 that the scheme had proven to be more successful than initially anticipated and would require a further tranche of funds. He further indicated that his Department was in discussions with the Departments of Public Expenditure and Reform and Finance with regard to an extension of the scheme. A meeting with the Minister for Finance and Public Expenditure and Reform was scheduled for 4 February 2019. However, this had to be rescheduled and took place on 5 March 2019. At no time was the first tranche of funding depleted and following the meeting on 5 March 2019, the Minister informed the Joint Oireachtas Committee on Housing, Planning and Local Government that local authorities could continue to accept applications as discussions had commenced on further funding. As of the end of January 2019, €106 million had been lent supporting 575 individuals and families to buy their first home. The Minister is in discussions with the Minister for Finance and Public Expenditure and Reform regarding further funding for the scheme. The Central Bank is also being consulted. Specific allocations to local authorities for 2019 will be finalised when those discussions have concluded. However, in the meantime, the scheme remains open and all local authorities should continue to receive and process applications up to and including drawdown of funding, as appropriate.

Photo of Victor BoyhanVictor Boyhan (Independent)
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I thank the Minister of State for his helpful reply. I am a member of the Joint Committee on Housing, Planning and Local Government. I am aware that at least five local authorities do not have any money to hand out under the scheme. While it makes sense to put in applications and prepare, we must be fair to people because this might be their only hope of funding the purchase of a home. The sooner we see the specific allocations for the local authorities in 2019, the better. Next week, we are into April, which is the fourth month of 2019, so there is a certain urgency here. I am not suggesting the Minister or Government is not treating this matter with urgency but it would be helpful given the importance of this issue and the fact that it will be raised on the doors by many people in local election campaigns. It would be very helpful if the details of the scheme could be released as soon as possible. I thank the Minister of State for his very helpful information.

Photo of Ciarán CannonCiarán Cannon (Galway East, Fine Gael)
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I thank Senator Boyhan again for raising this issue and shining light on it. Thankfully, it has been a very successful scheme. I have been fortunate to be able to assist a number of constituents in making applications, which have been successful. It is an indication of the ambition of our people to build or acquire their own home. This is a very important tool in the arsenal of opportunities we offer in securing permanent housing for the future. The message I would like to see go out loud and clear from this discussion is that it is not a case of whether local authorities will receive funding. It is a case of when they will receive funding and what the scale of it will be. I would tell anybody contemplating making an application that the scheme remains open, all local authorities have been instructed to continue to receive and process applications and people should not have any doubt as to the Government's commitment to sustaining the scheme in the future.