Wednesday, 11 February 2004
Seanad Eireann Debate
Mr. Bannon: This is the third time I have submitted this matter. I hope the Minister of State will react positively to it. While the time limit for applications under the urban renewal tax incentive scheme was extended from 31 December 2004 to 31 December 2006, which is very welcome, I am puzzled as to the reason the Minister of State has not made provision for those towns which did not qualify under the original scheme to participate now. This time extension for the urban renewal scheme which is operating in 100 small towns will allow developers and local authorities the opportunity to extend the take-up under the scheme.
The relief available afforded a unique opportunity to individuals and groups to undertake this development and will contribute to important objectives of population retention and growth in those selected towns. The scheme will also support industrial, commercial and rental residential development. It affords owner-occupiers of new or refurbished dwellings an opportunity to qualify for personal income tax relief on the cost of construction or renovation of such buildings.
The urban renewal scheme provides tax incentives for certain towns outside the urban renewal scheme area with populations between 500 and 6,000 people. One hundred towns have qualified. The towns which have qualified to date are thriving and this is recognised by local authorities, developers and the public.
In October 2002, the Minister of State admitted that the take-up of the scheme had been very slow, yet to date there are towns which have not qualified under the original scheme. It appears the scheme is under-subscribed. I ask the Minister of State to shed some light on this anomaly and clarify the reason these towns are being excluded. I have received many representations from chambers of commerce and other development associations in County Longford and in other counties on the western seaboard who feel they were hard done by last time. I ask the Minister of State to give some consideration to all villages and towns in the BMW region.
Mr. N. Ahern: Following the good results achieved under successive urban renewal schemes, which currently benefit the five cities and 38 large towns, the tax incentive-based town renewal scheme 2000 was aimed at the physical renewal of smaller towns, that is, those in the population range of 500 to 6,000 people. The scheme is intended to promote sustainable development patterns, counteract population movement from towns to the surrounding countryside, combat dereliction and revitalise designated towns as commercial and social centres.
It was considered essential to utilise tax incentives in a judicious and balanced fashion to ensure that those towns with the greatest need and potential in each county were targeted. Accordingly, designations under the scheme were based on dedicated town renewal plans. County councils were asked to prepare these plans under comprehensive guidelines from my Department, to identify targeted sites for tax designation and to justify the proposed designations by reference to the plans objectives.
In considering a candidate town, councils considered its attractiveness as a place to live, the scope for residential development in the town centre, its potential as a commercial and social centre, the adequacy of its infrastructure and its current heritage status. Following examination of town renewal plans by an independent expert panel, 100 towns were approved under the scheme. Generally, between three and seven locations were designated in each county, depending on county population.
The most recent projections are that overall investment under the scheme will amount to approximately €350 million. In order to optimise take-up and achieve maximum benefits under the scheme, the Minister for Finance has decided to extend its termination date from the end of 2004 to 31 July 2006. That is the extension of the existing scheme and not the creation of a new one. It is not proposed to re-open the matter. For a number of reasons I do not consider that it would be especially practical or useful to seek now to extend the current scheme to encompass further towns.
By any yardstick, the current scheme is a success and I consider this is largely attributable to the targeted and focused approach adopted. Access on too wide a basis would tend to dissipate available resources and defeat the purpose of attracting investment and settlement to designated town centres with the greatest potential. In any event, it would be wrong to assume that towns outside the current scheme do not benefit from tax relief and other support measures. Various support schemes are operated by a number of Departments. The rural renewal scheme plays a significant role in sustaining rural areas not benefiting from the urban-town renewal schemes.
Under the aegis of my Department, the EU-Exchequer funded urban and village renewal programme continues to make good progress, with investment in some 135 urban and rural locations nationally during 2003. Total public investment under this programme will be almost €160 million. Funding is also available under the EU programme for peace and reconciliation towards community development measures in the Border counties.
Overall, I am not convinced of the desirability or feasibility of designating additional towns under the town renewal scheme and there are no proposals to amend it. While an extension was given this year, that is supposed to be the end of it and these tax incentives will not be allowed by the EU from the end of 2006. There are other schemes which are benefiting other parts of the country. It is a requirement that the various tax incentive renewal schemes are mutually exclusive and any given area can only benefit under one scheme, whichever is most appropriate to that area.
Longford town was already included in the 1999 urban renewal scheme. Most if not all of County Longford was included in the 1998 rural renewal scheme which is targeted at regenerating parts of the upper Shannon region. These schemes are targeted at different counties and if an area is benefiting under one, it cannot benefit under another. While an extension by up to two years has been given for work in progress or for projects that had been given planning permission, as of now that era is over because the EU has a problem with the continuation of those schemes. It is not intended to re-open it because that is a very long-winded process and it takes much time to get in projects. We are continuing with the scheme as it exists at present.
Mr. Bannon: Part of the BMW region does not qualify for peace 2 funding and neither is it in the CLÁR area and it feels hard done by. There is plenty of funding in the BMW region. The mid-term review of the BMW region showed that the funding was not drawn down. Will the Minister of State consider some type of programme for those towns and areas?
Mr. Bannon: That is the rural renewal scheme; it is not the urban renewal scheme. A number of villages in County Longford, County Roscommon and other parts of the west do not have the urban renewal scheme.
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