Catherine Murphy (Kildare North, Independent)
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Question 65: To ask the Minister for the Environment, Heritage and Local Government the measures he will introduce to amend the system of insurance bonds which are required by local authorities in advance of a development commencing. [5617/11]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Sections 34(4)(g) and 180(2)(b) of the Planning and Development Act 2000 provide respectively that a planning authority may attach conditions to a planning permission requiring the giving of adequate security for the satisfactory completion of a proposed development and, if a development is not subsequently completed satisfactorily, may apply a security, given under section 34, for the satisfactory completion of that development.

My Department has consistently advised planning authorities that it is essential that planning permissions for residential developments are subject to conditions under which an acceptable security is provided by way of bond, cash deposit or otherwise so as to secure the satisfactory completion of those developments. Planning conditions must require the giving of sufficient security prior to commencement of development and planning authorities should ensure that they are in a position to draw down the security in cases where a developer fails satisfactorily to complete a residential development, or phase of a development, within the specified period.

It is a matter for the planning authority to determine both the level of the security, the duration and the type of security (e.g. the lodgment of a bond from a financial institution such as a bank, insurance company or building society, a cash lodgment or a letter of guarantee from the Construction Industry Federation) that will be required for each residential development. The amount of the security, the duration and the terms on which it is required to be given, must enable the planning authority, without cost to itself, to complete the necessary services (including roads, footpaths, water mains, sewers, lighting and open space) to a satisfactory standard in the event of default by the developer. Similarly, the enforcement of planning conditions, including conditions in relation to bonds, is a matter for the relevant planning authority. The Interim Report of the Advisory Group on Unfinished Housing Developments published on 16 February 2010 found that practical experience in the operation of bonds by local authorities indicates that they can be problematic and time consuming to liquidate. The Advisory Group considers that the issue of securities and bonds merits further examination, including the use of more liquid securities such as cash deposits coupled to careful phasing of developments in a sequential manner to minimise the working capital impact. It is likely that that there will be specific recommendations in the Group's Final Report which is due to be submitted to my colleague, Minister Penrose, shortly. Arising from this analysis, I anticipate that my Department will consider the recommendations and assess what further policy advice and action are necessary in this regard.