Tuesday, 14 December 2004
Dáil Eireann Debate
Mr. Morgan: I thank the Minister of State for coming to the House to deal with this issue which was brought to my attention by Wexford Sinn Féin county councillor, Mr. John Dwyer, who discovered that New Ross Town Council had not, when calculating the discount to be applied to the gross property price in the sale of local authority houses, applied the additional €3,809 as per circular HRT 6/95 from the Department of the Environment, Heritage and Local Government. The suspicion is that the failure was ongoing over approximately ten years and amounts to a considerable sum of money. The Minister of State needs to tell the house how long this situation has been ongoing and when it was brought to his attention.
The effect of the overcharging on those purchasing local authority housing in New Ross by €3,809 should not be underestimated. Tenants of local authorities tend to be on the lower end of the income scale and the extra €3,809 may, in some cases, have prevented some people from proceeding with plans to buy local authority houses. How much money must New Ross Town Council now pay to those who did not receive the appropriate discounts when buying their house? From where will this money come? Will it be paid by the Department in recognition of its failure to conduct adequate audits?
I acknowledge that, following the raising of this issue by Councillor Dwyer, New Ross Town Council has begun to apply the discount. There are serious concerns that the practice of not applying the €3,809 discount in all cases has been in place in all five local authorities throughout Wexford. As Wexford County Council is the loans authority for the county all valuation certificates for local authority houses sold under the tenant purchase scheme pass through that office. If New Ross Town Council was alone among the Wexford local authorities in not applying the discount, this matter would have been spotted and rectified.
The question that the Minister must answer is whether there has been full compliance by all local authorities with the terms of the tenant purchase scheme at all times during the past ten years and, if there had been any deviation from those terms, whether the money due to purchasers of local authority homes has been returned to them. Has the Minister investigated the compliance of other authorities with the terms set out by his Department? The Minister of State needs to outline what procedural checks his Department has in place to prevent deviation by local authorities from the terms of the tenant purchase scheme? If these procedural checks are in place, how did this go undetected? Does the local government auditor routinely check purchase-sale details of local authority housing?
The Minister was recently involved in a rather childish blame game with local authorities where he sought to put the entire blame for poor delivery in terms of the construction of new social housing units on local authorities. The Minister for the Environment, Heritage and Local Government must stop abdicating his responsibility for local government and housing.
Combined with the Minister’s attempts to bury his head in the sand on local government and housing issues, the Government has been responsible for taking powers away from local authority members and increasing the powers of unelected county and city managers. Consequently, the problem of lack of accountability within local authorities has been aggravated. This lack of accountability is intimately connected to the occurrence of problems such as the failure of New Ross Town Council to comply with terms of circular HRT 6/95. I hope the Minister will fully answer all the questions I have raised.
We recently witnessed the systematic ripping-off of customers by banks and others. I will not go so far as to claim that local authorities have joined them. Generally, local authorities are staffed by honourable officials who perform an excellent public service, and long may that continue.
Mr. N. Ahern: The allowance of a discount of €3,809 for tenants purchasing houses under the current tenant purchase scheme is provided for under article 6 of the Housing (Sale of Purchase) Regulations 1995. The regulations apply to all houses purchased under the scheme, of which the application of the discount is an integral part.
My Department has been in contact with New Ross Town Council and I understand that the matter of the discount has been brought to its attention. The council accepts that a mistake was made and, again, I understand that letters have issued to a number of house purchasers informing them that the amount due will be refunded immediately.
Under the Housing Acts the operation of a tenant purchase scheme is a matter for a housing authority subject to compliance with regulations and directions from the Minister for the Environment, Heritage and Local Government. Prior to this case, my Department was not aware of problems in terms of the interpretation of the regulations regarding the discount. The scheme has been in operation for ten years and the discount has applied throughout this time.
As indicated, this is not a question of deviation from the terms of the scheme but rather a simple mistake by the local authority concerned. Fortunately, in this case, the matter, having been brought to the attention of the authority, is being dealt with and the mistake is being rectified. The Deputy suggested there may be other housing authorities which do not apply the discount. To allay fears in this regard I have asked that my Department write to all housing authorities immediately to remind them of the position relating to the discount. I find it hard to understand how this happened. The Deputy claims it may have gone on for ten years but so has the scheme. It is possible that the local authority in question believed the abolition of the first-time buyer’s grant applied to this extra discount. The discount amounted to €3,089, the equivalent of £3,000, which was also the figure for the first-time buyer’s grant. It was never specified as such in the regulations. Only a dozen cases are involved but someone presumed this was the first-time buyer’s grant. It is possible that some other local authorities have done the same but it is most unlikely. However, the possibility exists that when the first-time buyer’s grant was abolished, the New Ross local authority believed the extra discount, which was the equivalent figure, was also abolished.
Mr. N. Ahern: I will check on that in case there has been a similar misunderstanding elsewhere. This would surprise me as all Members are dealing with such cases in their constituency clinics. I appreciate the Sinn Féin Party’s councillor spotted this. When one is going through figures such as this, I am surprised it was not copped onto earlier. However, I am informed that fewer than a dozen cases are involved. I thank the Deputy for raising the matter and I will ask other local authorities to check if the same misinterpretation has occurred.
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