VOTE 34 - REVISED ESTIMATE 2017
1 March 2017
Introduction
Chairman and Members,
I welcome the opportunity to discuss with the Select Committee my Department’s Revised Estimate for 2017. I am accompanied by Minister of State Damien English and Minister of State Catherine Byrne.
To assist in the work today, we provided briefing last week on the Department’s funding for 2017, which sets out details of the Vote and the Local Government Fund, as well as other key information.
DHPCLG Vote 2017
The Revised Estimate before you today sets out my Department’s budget for 2017. Gross expenditure of €1.779 billion is budgeted for my Department this year. This represents an increase of almost €400m or 29% on the provision in 2016. Such a significant increase in resources for my Department clearly indicates the priority that the Government attaches to my Department’s programmes and, in particular, the importance and urgency that we have assigned to supporting the initiatives set out in Rebuilding Ireland. The gross provision for 2017 is made up of over €1 billion in current spending and over €700m in capital spending. In addition, my Department’s programmes will benefit in 2017 from resources available from the Local Government Fund.
Housing
Turning to some specific areas, 2017 will see a very significant level of new investment in housing. As I have previously stated, housing is an absolute priority for this Government and this is clearly evidenced by the level of resources that have been allocated to support my Department’s Housing programmes this year. The Revised Estimates show that €1.2 billion is being made available for housing programmes in 2017. In addition, local authorities will fund a range of housing services to the value of €92 million from surplus Local Property Tax receipts, bringing the total housing provision to almost €1.3 billion. This investment will see the housing needs of 21,050 households being met in 2017. Through a provision of €732m for capital expenditure – made up of €655m Exchequer funding and €77m self-funded by local authorities from LPT receipts - local authorities and Approved Housing Bodies will be in a position to deliver 4,450 units through a combination of construction, acquisitions, rapid build, Part V and returning vacant units to productive use. The provision of €566m in current expenditure – made up of €551m Exchequer funding and €15m self-funding by Local Authorities from LPT receipts - will mean that 16,600 additional households can be supported in 2017 under the Housing Assistance Payment, the Rental Accommodation Scheme and through direct leased units. The Housing Agency will be provided with capital funding of €70 million with the specific focus of engaging with banks and investment companies to acquire properties for social housing nationally, thereby increasing social housing delivery. It is estimated that this mechanism will delivery some 1,600 units over the period to 2020. A new Vacant Repair and Leasing Initiative will allow local authorities to provide financial assistance to property owners to bring vacant properties up to standard which can then be leased for social housing. The scheme is being rolled out nationally with total available investment of €32m, which will support up to 800 vacant properties to be brought back into use as new homes for families on local authority waiting lists.
A new “Buy and Renew” initiative will support local authorities and approved housing bodies to purchase private housing units in need of remediation, renew them and make them available for social housing use. An initial capital provision of €25 million will be available for this initiative in 2017.
The Government has also established a €200 million Local Infrastructure Housing Activation Fund supported by an allocation of €50 million in 2017. The Fund will provide enabling infrastructure on key sites to open up lands for early development and has the potential to release the delivery of at least 15,000 to 20,000 new homes by 2019. The exchequer funding being provided for housing authority managed homeless services is up by almost €28m or 40% on the 2016 Budget provision and totals almost €98m. This will ensure that the increased demand for emergency homeless services is effectively addressed and will assist in supporting homeless households access long term and sustainable housing solutions. In 2017, some 3,000 exits from emergency accommodation are expected to be achieved through normal social housing tenancies, provision of rapid build housing and the Housing Assistance Payment. As part of the Government’s response to tackling housing supply issues An Bord Pleanála has been entrusted with administering new temporary fast-track planning procedures for proposed residential developments of 100 or more units and large-scale student accommodation projects, known as Strategic Housing Developments. Under the new procedures, the Board will be required to complete pre-planning application consultations regarding proposed developments with the concerned developers and the relevant local authority within 9 weeks of receipt of request, and subsequently will be required to make a final determination in respect of planning applications for concerned developments within 16 weeks of receipt of the planning application. This will potentially result in planning decisions in respect of such large-scale residential developments being made within 25 weeks of the commencement of formal pre-application consultations with the Board as against the current 2-stage planning application process which can in certain circumstances take up to 2 years from initial design concept stage to securing ultimate approval.
Water
Turning to water services Members will be aware that Irish Water took on responsibility for the delivery of water services from 1 January 2014. The Programme for Government commits to a capital investment programme, which includes the €5.5 billion in capital set out in the Irish Water Business Plan to 2021, to continue to upgrade the dilapidated national water infrastructure.
The projected level of subvention and equity to be provided by Government to Irish Water assumed in its Business Plan to 2021 averaged €475m in subvention and €270m in equity contributions for both 2017 and 2018. Additional funding is being provided in 2017 to address the shortfall arising from the suspension of domestic water services charges. The Government remains committed to supporting the Group Water sector as an important element of the water industry in Ireland. This is reflected in the provision of €17.8 million in 2017 for my Department’s Rural Water Programme, under which funding is provided for group water schemes. A multi-annual approach was introduced in 2016 in respect of the Rural Water Programme. The new multi-annual approach provides enhanced funding certainty for priority investment needs in order to support the implementation of proper planning and sustainable development in rural areas, to meet the requirements of the Drinking Water Directive in relation to rural water supplies and to support the delivery of measures identified in River Basin Management Plans to meet the objectives of the Water Framework Directive.
Local Government
Chairman, the Local Government Fund is funded principally by motor taxation and Local Property Tax (LPT), which is collected by the Revenue Commissioners. In addition a payment is made to the Fund from my Department’s Vote.
Local Property Tax continues to provide a sustainable, stable, alternative source of funding for the local government sector. Save for an administrative change to the treatment of pension related deductions, the 2017 allocations of Local Property Tax to local authorities are broadly based on the same mechanism and principles as were agreed by Government in previous years, with 80% local retention to fund the delivery of public services and the remaining 20% being re-distributed to provide top-up funding to local authorities that have lower property tax bases due to variances in property values and density across the State. These measures are necessary to ensure a balanced system of funding local authorities. The Government has devolved more powers to local authorities by giving elected members discretion to vary the rates of LPT by up to 15%. This allows for greater transparency and accountability at a local level. The income sources to the Local Government Fund this year are estimated to be Motor Tax of just over €1 billion, LPT of €460 million and a payment from the Exchequer of €365 million. My Department will make payments estimated at €1.837 billion from the Fund in 2017, including LPT payments to local authorities of €500 million, payment of €333 million to the Department of Transport, Tourism and Sport for the maintenance of non-national roads and for public transport, payment of €639m to Irish Water and a payment to the Exchequer of up to €230 million.
Community
The Department’s 2017 Vote also provides funding for a range of Community Programmes. The bulk of the funding, over €42m, is provided for the Social Inclusion and Community Activation Programme or SICAP as it is known. SICAP, which was rolled out on 1 April 2015, as the successor programme to the Local and Community Development Programme, takes account of the new alignment structures in its delivery and objectives. The Programme is managed and implemented through the Local Community Development Committees, as the new governance model for local and community programmes in each Local Authority area. The aim of SICAP is to reduce poverty, promote social inclusion and equality through local, regional and national engagement and collaboration. I am confident the allocation of over €42 million for 2017 will allow for the continuation of important supports for people in disadvantaged communities and will allow for the key, essential, front-line services delivered through the programme to be maintained.
Conclusion
Chairman, Members, I have kept my remarks as brief as possible in order to allow for a full discussion on the programmes and funding of my Department this year. Myself and the Ministers of State will be happy to deal with matters that members wish to raise.
Thank you.