Local Authority Operations: Motion.

Wednesday, 24 May 2006

Seanad Eireann Debate
Vol. 183 No. 50

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Mr. Dardis: Information on John Dardis  Zoom on John Dardis  I move:

—the role of management companies in new housing estates, and charges being imposed on residents;

—conflicts of interest which can arise when senior planning officials take up employment with development companies operating in the same local area;

—the imposition of large development levies, and special development levies by local authorities;

asks the Minister for the Environment, Heritage and Local Government to outline:

—the appropriate measures that might be taken to ensure local authorities take housing estates in charge where they should do so;

—the appropriate restrictions that can be applied to local authjorities to the prevent the attaching of planning conditions requiring management companies to be established in housing estates;

—the legal and constitutional restriction that might be applied to public and/or civil servants vis-à-vis new employment they may take up which holds a potential for conflict of interest; and

—how the imposition of development levies, and special development levies by local authorities might be monitored and controlled; and how full transparency and accountability can be ensured regarding the spending of these moneys.

I move the motion because of the ongoing public concern in these matters. It is the considered view of the Progressive Democrats that there is a level of anxiety among the public, particularly but not exclusively among home buyers, about certain practices in the planning and development process. The level of anxiety is such that my party feels it would be useful to debate these issues in the Seanad and to hear the views of Members and of the Minister.

[1562]A recent review of planning and development legislation refers to Ireland’s “almost uniquely open system” in respect of planning applications, and it is true that there is much to be positive about regarding our procedures. They have improved significantly in recent years with the most recent pieces of legislation. However, three specific areas of concern have arisen and these are referred to in the motion. First, there is public concern about the role of management companies in new housing estates, and charges being imposed on residents. It is accepted that in certain circumstances management companies are both appropriate and desired by the resident and the local authority. For example, there may be a relatively closed or private housing development where the residents require and are happy to have and pay for a management company to maintain infrastructure and look after the fabric of the estate. However, the Minister is no doubt aware that problems do arise elsewhere.

Traditionally, when a development was completed in accordance with the planning permission granted, the local authority took that estate “in charge”, meaning that the council took responsibility for public infrastructure such as roads, footpaths, sewers, water mains and public lighting in the housing estate. Developers should, of course, be required through the planning permission process to complete each estate to a standard acceptable to the authority for taking in charge. That in itself has created difficulties in the past. The local authority obtained a bond from the developer as a prompt to get estates completed as quickly and efficiently as possible.

The public concern has arisen from a real or perceived move away by local authorities from that traditional process. For example, that includes the obligation on some home buyers to become a member of a management company; the associated obligation on home buyers to pay large sums to these companies to carry out work which traditionally was the responsibility of the developer, or eventually, the local authority, when the estate was taken in charge; and the uncertainty among these home buyers about what level of control or influence they have, if any, over the management company to which they are paying fees.

Other problems include the linking by some local authorities of planning permission with the establishment of a management company in some developments, and the imposition of these conditions by some local authorities in a way that introduces uncertainty about what exact responsibility the developer has to complete the development and maintain and repair the infrastructure.

We all know that purchasing a home is one of the most significant decisions anyone can make in a lifetime, and is very stressful for many people, such as a couple or a family, for whom it can be a once in a lifetime experience. Given the expensive market in which house buyers must operate today, this has never been more the case. [1563]The complexity of this issue — the role of management companies and “taking in charge”— merely compounds the stress. Young families have enough stress without thinking about who, if anyone, is going to keep common areas well tended and infrastructure in good repair.

We would all be of the view that people in general are positive and active when it comes to keeping their own homes, gardens and surroundings of their estates in good order, and in the main, most families have no problem paying into their residents’ associations, which do a very good job to ensure green areas and verges are kept in shape. However, they do not need the stress of dealing with a poorly run management company, to which they pay a large sum, but over which they feel they have little control. They do not need the further stress of feeling caught in the middle of a difference of opinion between a developer and a local authority over who is responsible for infrastructure, for instance an unsafe footpath, unsafe unfinished wall or an unsafe absence of street lighting. They do not need the stress of wondering what will happen to the standard and condition of their apartment block because there is inadequate participation by certain neighbours in the management company, or the refusal of other apartment owners to pay the management company charge. They certainly can do without suspicions that their local authority may be using certain provisions of the planning laws to transfer or perhaps even abdicate responsibility for providing and maintaining public infrastructure.

Some of these problems are specific to apartment blocks, and I accept that apartment living has multiplied in this country in recent years, with more than 100,000 apartments being built in the past ten years alone. However, I do not accept this as an explanation or an excuse for the aggravation that is being visited on home buyers today. Nor does a circular letter to city and county managers reminding them of their obligations and asking them how well they are meeting them represents substantial action.

I will move on to the second area of public concern addressed by the motion, namely, the conflict of interest that might arise when senior planning officials take up employment with development companies operating in the same local area. Without naming names, which the Cathaoirleach would rightly disallow, as people should be able to defend themselves, the House will be aware that for example, no less than a former county manager of a local authority has taken up a senior position with a development company. The company in question had previously been granted planning permission for a large and controversial development. The ultimate deciding officer at the time when the permission was granted, three months later took up a senior and highly paid position with the developer in question. The perception of the person [1564]having been in a conflict of interest regarding the development is compelling, and is only one example.

Reference may be made to the Local Government Act 2001, Part 15 in particular; new provisions in the Civil Service code, standards in the Civil Service code; and Standards in Public Office Commission recommendations and review. However, as I understand it, the issue of senior local government officials accepting outside appointments or consultancies, following resignation or retirement, is not adequately covered by codes at present. We have a duty to address the concerns of the public regarding conflicts of interest, and subject to the Constitution and relevant legislation, investigate the feasibility of a moratorium on the take-up of certain types of employment by senior local authority personnel. This is a time of great concern among many citizens about the planning process and their capacity to influence it. It is also a time of massive development. This makes matters all the more pressing.

There is sufficient concern to warrant action, namely steps to control whether consultancies or other areas of the private sector can get access to information gained by an individual previously and recently employed in a senior position by a local authority. I have sought legal opinion on the matter and have been told by counsel that if the restrictions are proportionate and reasonable — we could argue about what they might be, but counsel indicates a period of a year or so — there would be no legal difficulties about implementing these measures. I would be interested to hear how the Minister proposes to deal with this matter, if there are such proposals.

At this point I turn to the third element of public concern outlined in the motion, the imposition of large development levies and special development levies by local authorities. Development contributions are attached as a condition of planning permissions and are paid by the developer in advance of construction starting, to provide a mechanism by which developers can contribute to the cost of providing public infrastructure and facilities that benefit development in the area. I have already outlined the public concern about local authorities in some way diluting or confusing their responsibility for maintaining public infrastructure and this is a compounding factor.

I understand the Department of the Environment, Heritage and Local Government contacted planning authorities in 2003 to advise them that while it was expected that developers should make an appropriate contribution towards the costs of public infrastructure and facilities, care should be taken to avoid development contributions that are excessively high. However, the level of the contributions is adopted by the members of the planning authorities and it is a matter for each local authority to make a judgment on what is appropriate in its area. That [1565]was done in County Kildare and there was considerable controversy about it. Furthermore, special development contributions or levies can be imposed on a development where exceptional costs are incurred by the local authority. I understand, and am open to correction, that such special development levies do not have to be adopted by a council.

The Minister has stated the view that “development contributions continue to be attached as a condition of planning permission, and are therefore paid by the person carrying out the development in advance of construction starting. They are not paid by individual house purchasers”. That was in a reply to a parliamentary question on 29 November 2002. With in excess of €500 million being collected by local authorities in 2005, the Progressive Democrats are concerned that an inordinate cost is being introduced into the home buyers’ market. Let us be clear about this. We believe that developers should make an appropriate contribution towards the costs of public infrastructure and facilities. That is not in dispute. However, we must also be confident that the pressure on home buyers is not excessive.

We must look at concerns recently expressed in the media that levies, meant to be paid by developers, are being passed on directly to home buyers, adding up to 6% to the price of the average new home, and that a typical €350,000 home includes a €20,000 levy, according to the Irish Home Builders Association which represents the majority of builders. Consider my constituency of Kildare, where €250,000 was collected in development levies in 1996. In 2000, the figure was €5.5 million. Last year it was €18 million. In the neighbouring local authority area of south Dublin the figures for 1996, 2000 and last year are €6 million, €10 million and €33.5 million, respectively. Will the Minister outline how the imposition of development levies and special development levies by local authorities might be monitored and controlled in the future?

There is also the matter of the use of the large sums of money accruing from development levies. This money is supposed to be used for the acquisition of land, the provision of open spaces, recreational facilities, roads, bus corridors and infrastructure to facilitate public transport. They are to be used in the area in which they are collected. They are not for water treatment schemes, which are already covered by a national programme, or to be used in another location, as my colleague will later outline.

Again, however, we have seen reports that development levies are in fact being used to pay benchmarking payments. As the motion states, the Minister might outline to the House how full transparency and accountability can be ensured regarding the spending of the money accrued from development and special development levies. Several of the members of Kildare County Council made strenuous efforts to find out from the council what the levies were, where they had [1566]been collected and how they were being used. Our efforts were met by what could be described as blockage and it took an enormous amount of time and energy to try to get that information.

To conclude, the Progressive Democrats’ motion is precipitated by genuine public concern about certain aspects of our generally laudable planning process. I am pleased the Minister, Deputy Roche, is present and will avail of this opportunity to outline his assessment of these issues and to set out how they might be addressed, whether by primary legislation or otherwise.

Mr. Brennan: Information on Michael Brennan  Zoom on Michael Brennan  I second the motion. As Senator Dardis has set out the issues mentioned in the motion at length, I intend to dedicate my time to the specific subject of large development levies and special development levies imposed by local authorities. I wish to make clear the Progressive Democrats’ view that planning authorities should ensure that developers make an appropriate contribution towards the costs of public infrastructure and facilities.

Our development contribution system was revised with cross-party support via the Planning and Development Act 2000. The objective was a new and more transparent system. Under section 48 of the Act, planning authorities must draw up a development contribution scheme in respect of public infrastructure and facilities provided by, or on behalf of, the local authority that benefit development in the area. I draw attention to the words “in the area” and will refer to this point later.

With regard to the issue of transparency, the new development charges scheme was intended to ensure that the long-standing practice of levying development contributions to fund local authority infrastructure and facilities — for example, community areas and recreation — is implemented in a more transparent and consistent way across the country. The Progressive Democrats put down today’s motion because of genuine concern that transparency and consistency are not absolute by any means.

It is worth noting the view of the then Minister in February 2004 that “it is not anticipated that the contributions levied will unduly affect the price of houses, new industrial and commercial development or new agricultural developments”. Again, there is concern that this anticipation has not been met. Development charges, as intended, are desirable and, indeed, necessary. The funds raised by local authorities through development contributions are substantial. In 2005, for example, they were €12 million in Limerick county, €18 million in Kildare, €30 million in Wexford, €38 million in Cork county and a massive €50 million in Fingal. In addition, city councils collected €89 million and town councils collected €54 million.

These substantial sums are intended to be part of a consistent, transparent and dedicated system. [1567]It is intended that the €500 million collected in 2005 would not, for example, be spent on schemes or works that already come under schemes funded from the Exchequer and would not be spent on schemes or works outside of the area in which it was collected. There are two main points, what the moneys are spent on and where they are spent.

For the purpose of illustration, I will use the example of the national water services investment programme. This programme consists of 900 projects and is funded to the value of €5.1 billion. It is a national scheme introduced by the Minister which we applaud and wish well. National taxation funds the national scheme, and rightly so. Why is it that local authorities receive approval for water schemes under this programme but moneys received under the development contribution system are used to part fund them? That is contrary to the intention.

Moneys received under the development contribution system are not intended to be spent on works prioritised by the local authority and subsequently approved by the Minister and the Department of the Environment, Heritage and Local Government under the national water services investment programme. The Minister and the Department cannot walk away from their specific responsibility to implement the national water services investment programme.

The new development contribution system introduced under the 2000 Act to provide consistency and transparency has, in fact, created a system of what may be described as “law unto itself”. Local authorities can decide when, how much of and how the gains are to be spent, regardless of the Minister’s intention. There must be an immediate and annual audit of the collection and spending of development and special development levies by each local authority. In the interests of transparency and value for money to the electorate and our communities, whom the scheme was intended to benefit in the provision of facilities, there must also be an immediate and annual audit of schemes approved under the water services investment programme.

The Minister or Department cannot simply say that this is a national scheme. Local authorities are using funds from the development contribution system for water treatment works. Meanwhile, a person who pays into the development contribution system finds the infrastructure and facilities their money was to be used for are lacking.

The list of projects this money is intended for is quite explicit. The money is to be spent on the provision of open spaces, recreational facilities, community facilities, bus corridors and infrastructure to facilitate public transport and so forth in the area in which it is collected. It is not for water schemes that are already covered by a national programme and are located miles away. Under Part 3, section 28(7) of the Planning and [1568]Development Act 2000, local authorities setting their development contribution schemes shall have regard to any recommendations made by the Minister. Subsection (8) states that “following the consideration of the manager’s report, and having had regard to any recommendations made by the Minister, the planning authority shall make the scheme”. The Progressive Democrats’ call for an audit of development contribution schemes is to improve the system in how moneys are collected, spent and co-ordinated to improve the facilities and services delivered to communities. It is not a blame-game.

The new development charges scheme intended to ensure the long-standing practice of levying development contributions to fund local authority infrastructure, was implemented in a more transparent and consistent way. It is well-publicised that the levying of development charges is inconsistent. Business groups in particular have raised concerns about development contribution schemes differing considerably across local authority areas. Despite the desire for consistency, it is not the Department that sets the level of contributions on how local authorities calculate the charges. Each local authority decides itself.

As a result, consistency and uniformity is lost. Consider the charge for a 200 sq.m. development. According to one source, in Dublin city the charge in 2005 was €23,000, €16,000 in south Dublin, and €1,300 in Galway city. While this is a serious issue for businesses they have active interest groups to put their case. Our motion is more concerned with the concerns of the public. For example, the choice and location of services for consumers is likely to be affected by this variation. It is bound to influence where businesses locate, where services are provided to the public and where jobs are located.

What are the Minister’s views on this issue? Is he satisfied that the intended level of transparency and consistency is being delivered by the development contributions scheme, as implemented by local authorities. I thank the Minister for coming to the House to outline his views on these three significant issues — management companies, potential conflict of interest and development levies. I have focused on the development charge element of the motion. Senator Morrissey will speak further regarding management companies. As Senator Dardis stated, the motion is being moved in response to genuine concern among the public about these issues. We owe it to the public to outline what steps are being taken to address that concern.

Mr. Bannon: Information on James Bannon  Zoom on James Bannon  I am surprised by a Government party tabling this motion. Housing has been one of its greatest failures as typified by the unwelcome appearance of many management companies leaping on the back of human need. The Fianna Fáil-Progressive Democrats Government’s attitude to the housing market has [1569]resulted in large increases in house prices and a scarcity of social and affordable housing, despite repeated promises. Young people now find it almost impossible to get onto the property ladder without mortgaging themselves to the hilt, if they can get a mortgage. Parents who could expect to be off the hook with regard to housing, are being asked to stump up deposits for their adult children. Those lucky enough to get a house must move further away from our towns and cities.

The motion offers the House an opportunity to look at one aspect of the housing crisis, namely, the imposition of management fees that affects home owners and apartment dwellers. I hope it will be the beginning of a debate on how local government is financed and not over-burdened. The motion also plays into the hands of the Opposition which is more used to having to highlight the inadequacies of the Government parties with regard to housing issues. This time they are doing it themselves. It is also the reason we have not tabled an amendment to the motion.

Apartment living has become a way of life for people in recent years. As the Celtic tiger roared into life and demographic changes put pressure on the existing housing stock, high-density apartment blocks allowed for cheaper, high-quality housing that allowed many young people onto the property ladder. Census 2002 shows that 110,458 households, approximately 9% of the total, live in apartments. This translates as 210,056 people, highlighting the fact that it is often single people and couples without children who reside in such housing. Since then, evidence suggests this trend is continuing. From 2002 to 2004, over 42,500 fiats and apartments were completed, comprising a fifth of new housing.

Evidence suggests there are serious problems regarding apartment complexes which many residents feel powerless to address. These problems relate primarily to common areas and the failure of builders and managing agents to maintain them. Simultaneously they charge high management fees that increase each year, often with little or no provision for a sinking fund that is necessary to cover the high costs that occur every few years when major refurbishment is necessary. These fees can often be higher than two months’ mortgage payments. Residents are often at a total loss as to what they are paying for. Non-payment is not an option. Such a choice would lead to a debt being placed on the property that would have to be cleared before it can be sold. Residents have no State agency to which to complain. With an increasing number of non-resident investors in the apartment sector, it is often difficult to spur the necessary number of residents into action.

Politicians, both local and national, have no shortage of horror stories regarding apartment blocks. Unlandscaped gardens, unpainted walls, broken lifts, crumbling brickwork, unreliable refuse collection and broken fixtures and fittings are becoming common complaints. The Government failed to recognise the need for action during its first term. In 2002, the programme for Govern[1570]ment stated, “We will consider the introduction of legislation to regulate the establishment and operation of apartment complex management companies”.

In response to a parliamentary question in May 2003, the then Minister for the Environment, Heritage and Local Government stated the regulation of apartment complex management companies was still under consideration and that he had no immediate plans to set guidelines on fees. By December 2004, the issue had hardly moved on. Responding to another parliamentary question, the Minister stated a Law Reform Commission working group was examining the law on these types of developments and it was hoped it would respond early in 2006.

Earlier this year in the Dáil, the Fine Gael Party brought forward a Private Members’ Bill to legislate for apartment complex management companies, in the absence of any State regulation, despite a Government commitment to do so. Ten years of the current Government has done nothing for those seeking an equitable and fair deal. Despite a commitment in the programme for Government, apartment dwellers are still left without proper State protection against their management companies and agents. The Fine Gael Private Members’ Bill sought to amend the Residential Tenancies Act 2004 by widening the role of the Private Residential Tenancies Board. If passed, the PRTB would become the regulator in this area, imposing a pro-consumer code of practice on managing agents.

The code would protect residents in several ways. Developers would be obliged to set the same management fee for the first three years of a new complex at a level which ensured managing agents could meet the established minimum standards for that period. This way, there would be no sudden rise in management fees several years after an apartment has been purchased. The management fee would not be fully payable until managing agents were in place and the various services provided. Currently many builders demand payment of the first year management fee before the keys are handed over to the new owners. This is despite the fact that the new owners may be moving into what is essentially a building site and few of the services that the fee is paid for, such as cleaning, are provided. Owners should also be allowed to withhold a portion of the fee until all services are available.

Provision for an adequate sink fund should be made from day one. It has emerged that many managing agents set the annual fee without any provision for large-scale refurbishments that must be carried out every few years. This leaves residents with a shortfall and a choice of paying several thousand euro at once or else living within a decaying physical environment. Neither scenario is tolerable.

There are other areas in the apartment sector that need urgent attention. Fees should be set for the first three years of a new complex at a level which ensures managing agents can meet the established minimum standards for that period. The management fee should not be fully payable [1571]until managing agents are in place and the various services can be provided. At present, many builders demand payment of the first year’s management fee before the keys are handed over to the new owners. This is despite the fact that the new owners may be moving into a building site.

As a start, the Government should publish a Green Paper on this issue that we could all debate in the future.

Mr. Brady: Information on Cyprian Brady  Zoom on Cyprian Brady  I welcome the Minister to the House and I fully support the motion. Vast development has taken place in Dublin in the last ten years. There were 99,000 planning applications last year alone, with 81,000 completions nationally. Those figures have increased consistently every year.

Inconsistency is the problem with apartment complexes. Some complexes are working perfectly and residents in them are happy with the maintenance and landscaping. In other complexes, however, because of the nature of the management companies involved, there are problems. Consistency in the regulation of such companies as part of planning is an issue that should be debated. In suburban housing estates, there were issues with water treatment but the vast majority of local authorities do not impose regulations on planning permissions related to the appointment of management companies.

I had the dubious honour of receiving a strident letter from a management company after I had canvassed an apartment complex. The issue related to whether it was public or private property and if I should have got permission to canvass in the complex. This is an issue across the city — the question of the land the apartments are built on being public or private arises. This will require legislation and I welcome the fact that the Law Reform Commission working group is looking at the area. Hopefully it will come up with recommendations that will lead to new legislation. The sooner this is done, the better.

In Dublin, apartment complexes are being built in the suburbs, sometimes as part of housing estates and sometimes as stand-alone complexes. That leads to issues with traffic, services and the strains on existing infrastructure. When we look at the added value developers receive as a result of some of the services already in place, it is essential that they make a contribution. In my area, existing communities are being surrounded by development, putting pressure on infrastructure. Developers should make a contribution towards the services required in the area from their profits.

We recently dealt with the Planning and Development (Strategic Infrastructure) Bill and sections of that deal specifically with not overcharging developers through the use of the phrase “shall not require such an amount of financial resources to be committed for the purposes of the condition being complied with as would substantially deprive the person in whose favour the approval under this section operates of the benefits likely to accrue from the grant of the [1572]approval”. Measures can be taken by legislation or regulation to ensure this is not an issue with developers either.

The value of serviced land has increased horrendously in the last six years and with the amount of development going on at present, it will not decrease in the near future. We can, however, take measures to ensure that contributions that are made are used properly. They should go towards the provision of shops and crèches. The developments that are taking place are putting pressure on existing communities and this is where the contributions come into play.

In Navan there are large housing estates, some of which do not even have a shop or telephone box. People must get a bus to get to the nearest shop. That should not happen and the more pressure put on developers to provide these facilities, the better.

Senator Dardis referred to the purchase of a first house as the most stressful undertaking a person faces in his or her lifetime. It should be made as painless as possible. People are not sure what bills will arrive when they move into their new home because there is no clear requirement to provide a stated bill of charge for management service. There are issues related to the management of apartment complexes that will require legislation at some point. I look forward to hearing the Minister’s reply.

Minister for the Environment, Heritage and Local Government (Mr. Roche): Information on Dick Roche  Zoom on Dick Roche  I thank Senators for the contributions. I am somewhat surprised that the Opposition is not here as we try to deal with this issue.

An Cathaoirleach: Information on Rory Kiely  Zoom on Rory Kiely  We cannot refer to Members’ absence.

Mr. Roche: Information on Dick Roche  Zoom on Dick Roche  Senator Bannon made a great contribution. I am surprised, however, that no one else in the Labour Party or Fine Gael cares about this issue.

I welcome the opportunity to speak on this motion. I will deal with the four issues dealt with here: the taking in charge of estates, management companies for housing estates, preventing conflicts of interest in retired local officials and the question of development contributions.

On the taking in charge of housing estates, the responsibility of local authorities is absolutely clear, it is set out in law in the Planning and Development Act 2000. In that Act, the then Minister addressed this matter through the inclusion of strong provisions on taking in charge. Section 180 of the Act provides specifically that where housing estates have been completed satisfactorily, the local authority must, if requested to do so by the majority of owners or occupiers, initiate procedures for the taking in charge of the estate.

There is a similar duty on the planning authority with regard to an estate which has not been completed in accordance with the permission and where enforcement action was not taken within the relevant period. The ultimate decision as to [1573]whether an estate is taken in charge is a reserve function for the local authority members. I urge Senators, therefore, who have some influence with councillors, to stress to them that this is not an issue on which councillors should regard themselves as passengers or observers. This is a matter over which they have control and the ball is in their court.

At my request, the Department wrote to all planning authorities in January of this year, to determine if these provisions were being properly applied. In circular PD1 of 2006, planning authorities were reminded of the legal obligation imposed by section 180. The circular also stated that planning authorities must establish a policy for the completion and taking in charge of estates. The policy should include a requirement on developers to complete estates to a standard that is acceptable to the authority for taking in charge, details of the procedures to begin taking in charge estates promptly on foot of requests and the provision of sufficient funding. I am somewhat impatient that local authorities are not doing this. Councillors are elected to make sure that this happens and the county managers and councillors must apply the law.

Planning authorities were asked for a report on their activity in this area and the responses received indicate that at least 560 estates will be taken in charge by planning authorities this year. Some planning authorities, including those close to Senator Dardis’ heart, were reminded that taking estates in charge 30 years after they were completed is not acceptable. I have made it clear that I am not prepared to accept any heel dragging from councils or county managers. In one case, I intend carpeting an individual on this issue. I am not prepared to accept this because people who have bought their houses have paid for the housing estates to be completed and taken in charge.

Each local authority has been asked to develop a policy, which must be put to the members. I expect the councillors to remain vigilant on this matter and to request regular reports on the activity of their local authority. After all, that is what councillors are elected to do. I am not prepared to tolerate any foot dragging and I ask councillors to wake up and be more vigilant regarding this issue.

The circular letter referred to earlier also stated that the existence of a management company to maintain elements of common buildings, carry out landscaping and so forth must not impact upon the decision by the authority to take in charge roads and related infrastructure. Senator Dardis made the point that there was some suspicion that councils were effectively trying to pass on their responsibilities in this regard. They should not do so.

The issue of planning conditions relating to management companies is not a totally straightforward one. The Planning Act allows the attachment of these conditions, recognising the fact that management companies have been traditionally set up for the maintenance of apartment buildings and their attendant private grounds. It has been [1574]made clear that it is not appropriate to attach planning conditions regarding management companies in the case of traditional housing estates, by which I mean estates of houses with their own front and back gardens. I also consider it is appropriate that planning authorities should take in charge the public roads, no matter what type of residential estate is in question.

However, as Senators will be aware, the traditional housing estate is, in many areas, being replaced by mixed estates which contain apartments, duplex houses and terraced houses with shared facilities such as car parking and gardens. Genuine questions arise as to whether it is appropriate that all these facilities should be maintained at the tax payers’ expense. After all, if these facilities were attached in the traditional way to houses the individual householder would not expect the taxpayer to pay for them. I am not sure whether Senator Bannon, in his contribution, was suggesting that it was Fine Gael policy that the taxpayer should pick up the tab for all of these costs. If that is his party’s policy, it is a pity he did not say so.

It is not possible to say that it may never be appropriate for planning authorities to require the formation of a management company, as Senator Dardis pointed out. In certain cases there may be facilities, for instance a shared playground or sewage system, which residents want to keep for their own use and they will meet the cost accordingly.

As Senator Brady reminded the House, the Law Reform Commission working group is currently examining the legal aspects of the management of multiunit structures. The Government will consider the recommendations of its final report, including the need for any new legislation in this area. I have spoken with my colleague, the Minister for Justice, Equality and Law Reform on this matter.

In general there has been a failure in this debate to realise that there is a distinction between management companies and management agents. The Minister for Justice, Equality and Law Reform has already indicated that he intends introducing legislation to regulate management agents. A regulator will be charged with regulating management agencies and many of the complaints of apartment dwellers will be addressed in that way. The main issue for people is the failure of management agencies to deliver the services for which they are being paid.

Senators raised the matter of conflicts of interest and public officials. All public officials should avoid putting themselves in a position where there is a conflict of interest. It is of paramount importance that all local authority employees carry out their duties with integrity, impartiality and concern for the public interest. In that context, a code of conduct for local authority employees was published in June 2004 under the Local Government Act 2001. The code is a major step forward in local government and includes disclosure requirements concerning employment by serving personnel outside the sector and addresses situations concerning a conflict [1575]of personal or public interest. This builds on long-standing ethical requirements. The local government code was published before other codes of conduct.

The question of senior local government officials accepting outside appointments or consultancies following resignation or retirement is not subject to the code of conduct at present. Provisions of this kind were introduced to the Civil Service code in September 2004, that is, some months after the promulgation of the new local government code. An amendment to the code to bring it into line with the provisions that apply to civil servants will be published shortly.

Senators are aware of the importance of development contributions, which allow local authorities to recoup some of the costs of servicing land for private development. They are critically important to delivering a better environment and improving the quality of life for our citizens. It is right that the amount of development contribution be determined locally. This should not be determined centrally and is a matter for local councillors. It is also right that the adoption of the development contribution scheme should remain under the control of democratically elected councillors. Councillors are not mere passive observers in this process. This is one of the more important roles they have been given under the law. Councillors all over the country have rightly complained that many powers have been taken from them. They have the power in this case and should exercise it appropriately.

My Department has given planning authorities guidance regarding development contributions and, in particular, about setting them at an excessively high level. It is patently wrong for local authorities to have dramatically different levels between one area and another. An interdepartmental committee is currently examining a number of issues regarding development contributions schemes, following which revised guidance will issue, if appropriate. However, I am reluctant to take powers away from local authorities. We all subscribe to the idea of local democracy and if powers are given to local councillors, it is reasonable to ask that they exercise them.

On the issue of accountability and transparency, I have made it clear that I expect local councils and managers to be open, up-front and absolutely transparent in the matter of development contributions. The local authority’s annual report must — it is not a desiderata— contain details of moneys paid or owing to it under section 48 and must indicate how such moneys have been expended. I wrote to council managers on this matter before the 2006 estimates cycle began, indicating that I expect councillors to have full information. Before the start of each local financial year, the manager must submit to the elected council a report indicating the programme of capital projects. If Members of this House believe there are council managers who are not doing this, I would be delighted to hear from them.

[1576]I am aware that the practice differs from county to county and Senators expressed concern in this regard. I draw the attention of the House of an excellent example of good practice. Mr. Danny McLoughlin, the county manager in Leitrim, drew up a report which was published in local newspapers and sent to all councillors, detailing the income from the development contributions scheme and precisely how he intends to spend the money. That type of transparency should be the norm in every council. If Senators believe county managers are withholding information they should let me know and I will pursue the matter. In addition, if Senators believe there is any evidence of development levies being abused by being decanted elsewhere they should let me know. They should not and cannot be used in that way and it would be illegal and improper for them to use them, for example, to pay benchmarking awards.

I have made it clear that with effect from 2005, the annual financial statements of local authorities must show movement in balances of development levies from one year to the next, including income and expenditure, at year’s end.

Senators will be aware that it is not right or appropriate that the Minister of the day should interfere in the operations of local authorities but this is an area where managers must be up-front and transparent. I have met councillors in most counties, from all parties and none, and I have told them that if there is any evidence they should make me aware of it and I will have a word in the appropriate ear. It is very important that the partnership involving the local authority member, the Oireachtas Member and the county managers be respected. In partnership with local authorities, my Department is examining ways of building on this transparency and making the accounts of local authorities even more transparent. It is important that all stakeholders — local councillors, local communities and local businesses — are aware of the situation in this regard.

Members will be aware that this year was a historic year in many ways because it was one of the first years where full information flowed to councillors. In fact, I published the development contributions. There was some criticism that this was tantamount to interference but I believe the local government system should be open, transparent and accessible. I will examine any proposal that is brought forward in that regard.

I thank Senators for the opportunity to underline what the Government is doing in the area to ensure local democracy, accountability and transparency. It is important that our planning system operates to the benefit of all and not just a few. Councillors have a key role to play in this area, particularly in the matter of setting the development charges, ensuring proper accountability and that the development levies which are collected to provide benefit to the communities hosting developments are spent in the communities that have borne the brunt of carrying the development. I thank Members for their contributions.

[1577]Mr. Ryan: Information on Brendan Ryan  Zoom on Brendan Ryan  I welcome the content of the motion, which is yet another in the long list of issues that have made the lives of working families a misery in recent years, the first being the extraordinary price of houses and the second being the extraordinary difficulty of child care. I welcome this debate also because it is further evidence of the fact that this Government is in the process of falling apart in that it cannot agree on issues that are Government policy.

Senator Morrissey and I participated in a radio programme a few minutes ago——

Mr. Roche: Information on Dick Roche  Zoom on Dick Roche  We did not hear it.

Mr. Ryan: Information on Brendan Ryan  Zoom on Brendan Ryan  ——and he will not be surprised if I repeat myself slightly here. He will know what I am saying.

Mr. Morrissey: Information on Tom Morrissey  Zoom on Tom Morrissey  I will repeat what I said.

Mr. Ryan: Information on Brendan Ryan  Zoom on Brendan Ryan  The Senator is well able to do that.

There was a debate on this matter in the other House on 22 and 23 November last during which members of Fianna Fáil, Fine Gael, my party, the Green Party, Sinn Féin and the Independents spoke. No Progressive Democrats Member spoke in the debate but they voted against the motion. Not only did they not have this deeply found concern then, they did not bother speaking on it to defend themselves. They just went into the House and voted for an innocuous Government amendment which said nothing about the issue.

This issue has become politically significant for unfortunate Government candidates knocking on doors but something Members of this House and the other House have noticed over the years is the snail’s pace at which Fianna Fáil responds to abuses by the building industry. It usually gives it a good four or five years to complete whatever new rip-off it has discovered and then, in a fit of righteous indignation, decides to do something about it. I presume the Progressive Democrats have caught up with it.

The fundamental fact is that the Minister can issue all the well-sounding circulars and reminders to people but local authorities are staffed by people who cannot, without rigidly written down codes of practice, recognise that it is improper to move from a position of senior management in a local authority to senior adviser to a developer. They cannot see that that action of itself undermines both them and the process. How does the Minister believe that people who see the world like that will respond to a circular from a Minister for the environment who does not give them enough money to do the jobs they have to do?

This country is building 60,000 or 70,000 units of accommodation a year. I am glad we are doing that but I wish we could get ourselves organised and recognise that building houses to provide people with shelter is one thing, but building houses to provide people with the easiest capital gain in the Western world, at one of the lowest capital gains tax rates in the Western world, is not [1578]necessarily the way to focus on providing housing for people who are otherwise without it.

Investing in housing is one of the most lucrative ways of making easy money in Ireland and to a considerable degree it has been left alone. It is lovely to hear the way the commentators talk about the low levels of rent. The real gain from housing development is capital gain. If one is lucky, one can increase by 15% and pay 20% capital gains tax. Capital gains tax at 20% has its role in areas where we need to encourage investment but it does not necessarily have a role as a blanket levy.

The two issues raised here are inextricably linked. It is about the dubious personal ethics of some people in senior positions in local authorities. I cannot understand the motives of somebody with a commitment to public service who has become aware over a lifetime working in the public service of the capacity of many builders to manipulate, ignore and avoid their responsibilities and that it has taken enormous efforts on the part of the Health and Safety Authority over years to get the building industry to begin to deal with safety problems. It is extraordinary that the Ombudsman is telling local authorities it is about time they used their powers to deal with illegal developments or people who do not properly meet their planning applications.

We now have the minor Government party noticing that management companies are being put in. Management companies are not all an invention of the building industry; they are an invention of local authorities. Why do local authority officials and managers introduce management companies? We all know about multiple use and the intricacies of areas where there are apartments. All of that is dealt with in the Minister’s speech, although we did not need him to tell us. We appreciate the complexities but the fact that there are complexities in some areas has begun to be used by local authorities as a reason to impose a blanket solution universally which is annoying people who are struggling to build their own houses. What constantly intrigues me is why it took so long for the Government to notice that.

This new code of ethics the Minister has promised us for local authority officials should not be ready next month or the month after. It should be ready now and it should be clear and explicit that in any position a local authority senior official should not be able to work for anybody who had planning or other business to do with any local authority for a period of two to three years to sanitise that information. That should apply to Government advisers as well because we have had a steady trickle of them out of Government into positions where their knowledge was being put to dubious uses.

  6 o’clock

The legislation must be amended to make it clear that under section 180, residents can insist that a local authority take an estate in charge, not that they can aspire to and negotiate. It must be made absolutely and unequivocally explicit to city and county managers that where residents request it, their only discretion is the process of moving [1579]there. They do not have the discretion to refuse to do so. If the developer has not brought the development up to the acceptable standards, the developer must be required to do so, and once it is done, it must be immediately taken in hand. Anything else is an escaping of responsibility by local authorities, for reasons which are, at the very least, dubious.

Mr. Morrissey: Information on Tom Morrissey  Zoom on Tom Morrissey  I welcome the Minister and thank him for being here for this important debate. I support the motion moved by my colleague, Senator Dardis. He clearly set out the broad elements of the issues raised in my party’s motion. The motion before us refers to public apprehension about the role of management companies in new housing estates and apartment blocks, and the charges imposed on residents. Many residents in my constituency of Dublin North are concerned by the factors outlined by my party colleague, namely, the obligation to join a management company and pay a large sum and the uncertainty about their level of influence within that management company.

People are worried about the link between planning permission and the establishment of a management company, who exactly has responsibility to complete, maintain and repair the infrastructure and the non-participation of their neighbours in the management company or their non-payment of the management company charge. I will outline one brief story. A person who bought a house three years ago in a particular estate in north Dublin contacted me. As part of the contract, he had to agree to pay a management company for the upkeep of the estate, which so far has amounted to €500 per annum. The estate has both houses and apartments and all parts of it, including a green, are open to the public. It is not a gated community.

This person opposes these fees for the following reasons. He believes that buyers have already paid for the facilities, as the local authority demands a development contribution from developers, a cost the person believes was passed directly on to the home buyers. He also believes that, as there is no local taxation in this country per se, the costs to the local authorities have already come from general taxation. The citizen believes his local authority has abdicated its responsibilities, as the authority is prepared to service older estates by repairing footpaths and cutting grass. Given that part of the fee the person must pay includes public liability insurance, and given that the green and footpaths are open to the public, he believes it is the local authority’s responsibility to take on this insurance burden. Most important, this irate home owner sees management companies as “a sham”. This individual claims that in his estate the management company is a “shelf company” controlled by the developer, and that the only way to make the company do its job is through the courts.

Imagine the stress this situation causes a new home owner, irrespective of the accuracy of every [1580]claim, and his many neighbours. We all know that even the smallest things can infuriate one when it comes to one’s home, or when one feels one’s family is being badly treated. The gentleman who contacted me pointed out a simple example whereby he claims the builder did not install proper TV points in the houses and, therefore, people must install illegal aerials or get satellite dishes which, he claims, the company states people cannot put on the sides of their houses.

It is this type of simple annoyance, multiplied across homes and apartments, which creates the public concern referred to in our motion. In the case I outlined, the owners are resolved to setting up a residents’ committee with the long-term goal of removing the management company. That is the level of frustration, the feeling of zero control or input, even though one pays for the privilege.

The issue of control is important. Even though management companies were supposed to provide residents with joint ownership over communal areas, the concern is that they merely formally install the developer, or a management company linked to the developer, in the position of power. I read of ridiculous management company contracts which grant the home owner one vote and the developer 1,000 votes. I have also read of residents not being able to call an AGM until every apartment in a complex is sold.

What do home owners get for their money? It is difficult to find out. A household may pay €500, €1,000, or more, but has no inkling as to how or whether the management company uses the funds to maintain infrastructure. In Malahide, in a managed estate, which is an extension of an estate already taken in charge, a house owner pays €1,250. This includes public liability insurance on infrastructure not yet provided, as the estate is still a building site. Does the builder not already insure that estate? The owner of a two-bedroom apartment in Balbriggan pays €1,100 per year. This does not cover refuse charges. A two-bedroom apartment in Tyrrelstown costs a staggering €1,400 per annum. Again, this does not include refuse charges. No one likes to be in a position where he or she pays something for nothing.

The public is right to be concerned if there is a transfer, no matter how subtle or complex, of responsibility from local authorities to the home owner for the maintenance of public infrastructure, such as roads, footpaths, sewers, water mains and public lighting in their housing estates. The management company appears to be the vehicle of transfer. What are the Minister’s views on reports that existing or prospective home owners face zero choice on whether a management company is established, zero input into the annual charge residents in their estate or block will face, and zero information on what infrastructure their hard-earned money is spent on? I understand the Minister has taken some steps to clarify matters and address concerns but more needs to be done.

If new appropriate measures have been considered to ensure local authorities take housing estates in charge, and where and when they should do so, what was the outcome of these [1581]deliberations? If they have not been considered, will the Minister consider doing so as soon as possible? The same applies on any new appropriate restrictions to prevent the attaching of planning conditions requiring management companies to be established in housing estates, as a means of confusing responsibility between councils and home owners.

These are not vexatious arguments. They emanate from genuine frustration among new home owners, many of whom are young first-time buyers. They emanate from a frustration about simple things such as unfinished footpaths, unfinished or uncapped walls, poor drainage and broken street lights. On the face of it, these may seem to be small matters. However, they generate strong collective ire among a group of residents, particularly when they investigate only to find they are powerless, or that they pay money for no apparent return, or both.

I welcome the Minister to the House and thank him for listening to our views. I invite him to set out how he feels he can remove this source of exasperation from home owners across the country.

Mr. B. Hayes: Information on Brian Hayes  Zoom on Brian Hayes  I thank Senator Dardis and his colleagues for allowing us the opportunity to debate what is an extremely important issue, particularly in urban Ireland. It has become a major concern in new areas of Dublin. Ostensibly, it affects younger people who buy their first house and then find they must pay more than €1,000 per year, as Senator Morrissey stated, on this additional charge which other householders do not have to pay.

My view on this is straightforward. An argument can be made in favour of management fees for apartments. However, I recently visited my brother-in-law’s apartment in Lisbon and was interested to discover that the owners or tenants from each of the ten apartments take turns each week to take responsibility for cleaning the stairwell and hall and ensuring that everything is fine. They do not pay a charge because they do the work themselves. In this country one has a tendency to foist responsibility on other people for where one lives. All over Europe, the practice for many years has been that people take responsibility for their own local environment.

However, no case can be made for management fees in houses or new developments. I do not know why people must pay substantial fees for looking after the local environment in a new home. I recently put down a straightforward question through a councillor in my local authority of South Dublin County Council seeking the number of administrative staff in the local authority as against the number of professional and cognitive staff working in areas such as cleaning roads, picking up litter and planning. The ratio was 4:1. That is the problem. As long as we have a scenario where more public works, such as sewerage, roads and the cleaning and maintenance of public open spaces are being done by fewer local authorities, there will be a problem where other parties will have to fill the gap. That [1582]is the issue. When local authorities tell me they have four times as many staff engaging with the public, doing what the public wants them to do, as those who manage and administer, I will believe we are putting in place a good system.

The Minister has stated that when it comes to planning conditions, there is a new practice where a manager will stitch into planning conditions the need for a management company. Councillors have no say in that regard. The councillors cannot have a say where an application goes before a manager and he or she inserts the establishment of a management company for a development as a specific condition. The councillors may be against it, but the managers are using this to attempt to bleed more money from prospective home owners.

The Government cannot have it every way. It is getting approximately 25% in tax and VAT through the sale of all new homes anyway. The council gets a specific development levy on every sale within a housing estate. A large sum of money is going to central and local government, and the local authorities are making this a condition of a significant number of new housing estates. Blaming local authority members is not good enough, when one considers it is the manager’s function to stitch in specific conditions. If he or she is putting in such conditions, it is not a fault of the county councillors in that area.

My party has put forward a suggestion, as the Minister will know, that a new function should be given to the Private Residential Tenancies Board, which has been established and is working well. It could, in effect, become a national regulator to bring about some type of standard in this area.

There are three factors we should bring about to put in place a code of practice. We should immediately establish in law or through a regulation involving the Private Residential Tenancies Board, that there should be no annual increase in an annual fee for at least three or five years when a development is taken over. This would be a moratorium.

The management fee should not be fully paid until management agents are in place and various services can be provided. Many builders demand payment of the first year’s management fee before the keys are handed over. That is a new practice. A person may buy a house in August and there is a demand within a month for the entire year’s management fee, even though the person has not been living there for more than half of the year. The only way this practice will stop is through a code of practice, which the builders sign up to, or new legislation demanding that this comes about. We need the legislation either way.

A suggestion has been outlined by Deputy O’Dowd of my party that a sinking fund be provided, which would be available from the outset for the householders. Under current legislation, if half of the householders in a development come together and want to ditch the management company, they can do so. There should be a sinking fund in place from the outset whereby the community itself can decide what to spend money on. [1583]The fund should be made up of the amount left over from the development, with a significant amount paid by the developer once the management company is established. That is the way to go.

I reiterate my total opposition to the establishment of management companies for ordinary domestic houses. Whatever the argument for apartments — it may be a good argument in this case — there is no argument for such companies with regard to houses built within new communities. People feel it is another type of stealth tax, whether it is paid to management companies or local authorities.

There is an opportunity for the Government to respond imaginatively to some of the suggestions. We have put forward our views, and if there are better views on the establishment of a code of practice and giving a new authority new powers, we should have them. This issue will not go away until new legislation is implemented in this area which will give greater control to local authorities and their members, who could do more in this area.

Mr. J. Walsh: Information on Jim Walsh  Zoom on Jim Walsh  I welcome the motion as it is timely and on an important subject. I noted the Minister’s contribution and I welcome most of what he had to say. There is a need for issues surrounding these matters to be examined and dealt with in a better way than is evident to date.

I remember when the Bill relating to the taking in charge of estates went through the House in 2000 and the discussions we had on it. If I remember correctly, there is an obligation on a local authority to take charge of any estate more than seven years old, if requested to do so by a majority of people living there. I remember stating at the time that this should put an onus on local authorities to monitor the construction stage, as they could conceivably be taking on potential liabilities if the developer has not satisfactorily provided the services or if major refurbishment is required prior to the council taking over.

If this is happening at all, it is happening in few local authorities. It should be done as there can be considerable costs involved if there are issues with drainage, sewerage, roads or lights within an estate. We have all seen within our own jurisdictions, some difficulties relating to specific housing estates.

From discussing this at local authority level I know officials will contend that a private housing estate is not their responsibility. They would further argue it is up to the people requiring the houses in the estate to satisfy themselves that all the services have been installed to their liking. The de facto situation is that in a large housing estate where people are purchasing a unit for themselves, they do not have the resources to ensure everything is done properly. They depend on the developer. When one considers the conditions attached to planning, there is an onus on local authorities from a planning perspective, even before one considers the issue of potential [1584]subsequent liability when the authority takes over a development.

I note with interest that the Minister has taken up the issue of estates not being taken over by local authorities. At least 560 estates will be taken in charge by planning authorities this year. I would credit the Minister with that figure, as I am sure his letter prompted action in an area where action was not being taken. In many ways the figure probably highlights how attention was not being given to this area prior to the reminder from the Department. I am speaking generally, and there would clearly be exceptions among local authorities, as the Minister has pointed out. The action varies from authority to authority.

With regard to planning conditions relating to management companies, there has been a move in this direction. The Minister has clearly set out the issue in a letter to local authorities. With regard to the standard local authority estate, the provision of a management company should not be a factor of a planning condition. With regard to apartments, management companies will apply for clear reasons, as there are common internal areas as well external areas. The building itself would also have to be maintained. Therefore, the owners of apartments generally, informing a company to own the freehold of the property, will designate a management company to take care of those specific areas.

It may not be sufficient to urge local authorities by letter in this regard. There may be a need for a legislative framework, so it cannot be extended into the normal estates. I appreciate the point made by the Minister that there are difficulties with mixed estates where conventional housing units exist alongside apartment blocks. In such a case, the open areas and the general facilities, such as drainage and sewerage, should be the responsibility of the local authority. Ring-fenced legislation could be drafted to provide for that.

The conduct of planning officials has been raised. I am a member of a scheme where apartments were built as part of an apart-hotel. A request to change the designation of the complex to residential when the tax incentives expired was refused. The county manager of the local authority who refused the application subsequently joined a company interested in purchasing the development. I will keep a watching brief to see what transpires in that regard. Local government arrangements which allowed senior officials to exit at an early age with a lump sum have led to a trend in people joining private interests where there are obvious conflicts of interest. There is a need for effective policing of whatever codes deal with such matters.

There is a significant anomaly in a system whereby millions of euro from development contributions can be stashed away in an account and local authority members do not have a clue how much is involved. Officials have no accountability. As I know from my own experience, questions raised in this regard receive only vague responses. That should not happen because there is great potential for impropriety in that area arising from the secrecy surrounding it.

[1585]I would go further than the Minister and demand that all moneys collected from development levies should not just be accounted for in the annual report, which in many local authorities is only published 18 months or two years after the end of the year, but in the annual estimates. There should be a capital account as well as a revenue account and it should fully account for all moneys collected, as well as outline the projections for the following year. The capital projects on which the money is to be spent should also be outlined. There should be a full, transparent accounting system in each local authority, which should be easy to achieve. If a businessperson or anybody else allows laxity in a system he or she is as culpable as somebody who succumbs to the temptation to exploit it. Systems must protect employees and the public purse.

It is undoubtedly appropriate that there be a contribution from developments toward the cost of various services, such as roads, sanitation, etc. However, they must relate to the services provided and should not just be figures picked from the air. That does happen, because I remember when we had responsibility for such a development in Wexford County Council and there was a degree of horse-trading among senior officials. It was far from a scientific approach and it struck me that we needed guidelines from the Department to bring some semblance of uniformity to the area, even though I fundamentally favour each local authority being autonomous and having the right to make its own decisions.

Local government serves us well but it is important there is constant probing and prompting to ensure the best standards are upheld. In any large organisation, especially in a system not as democratically accountable as I would like, there is a need to ensure the structure and guidelines are in place so we achieve them.

Labhrás Ó Murchú: Information on Labhrás Ó Murchú  Zoom on Labhrás Ó Murchú  The proliferation of new houses is a good news story. Nobody could have imagined 20 or 25 years ago that we would be discussing these problems. Everybody’s desire is to have a home of their own but as prices rise people take out larger mortgages and have less money to spend on what they would like. If they invest such large amounts of money and commit to a 35-year mortgage they deserve a finished product — something with which they are happy and which gives them contentment.

In most cases local authorities have done a good job against all the odds. Given the extent to which houses are being built at the moment, in every village, town and city in Ireland, it must be very difficult for councils to meet their obligations and monitor proceedings. It is difficult to put in place the staff to provide adequate follow-up operations. However, it will not happen just by wishing it to happen.

I have listened to the Minister on radio programmes on several occasions and he has appeared quite focused in his response to the difficulties that have arisen, and has made it clear where responsibility lies. Nobody should abdicate responsibility because it is unacceptable that a [1586]young couple incur huge financial outlay and a 35-year commitment but years later still live on an unfinished estate. There are safety issues and local authorities should ask themselves who will be liable in the event of major claims. Obviously the responsibility of the local authority will come into focus.

We need an ongoing audit because there is a need for transparency and accountability. It will not be sufficient to depend solely on local authorities. There will either have to be legislation or a specific timescale for the completion of a project. That timescale could form part of the planning process. Planning permission is usually granted with several conditions attached but there should also be penalty clauses. If a builder leaves a development for another site but returns at a later date to complete work in conjunction with a management company, this work will be done in a piecemeal fashion.

The issue of development contributions is a hardy annual. People have always resented paying these contributions primarily because they regard them as a penal tax or a way for local authorities to raise revenue without specifying the purpose. Members of the public need to understand the reason such charges are imposed. It is not necessary that they be used to develop roads, car parks or facilities of that nature.

One of the main drawbacks of the housing boom is the lack of corresponding infrastructure for new communities. This leaves people feeling isolated and reminds me of the situation when Shannon was built and people used to say the town lacked heart because it did not have a community base or history. Although this is no longer the case in Shannon, this isolation occurs when one tries to create something from nothing. If development charges must be imposed, clear guidelines should apply and they should be used to fund the development of playgrounds and other infrastructure. There is nothing to prevent consultations taking place in this regard.

The large number of new housing developments has in many respects created new villages and towns. The town of Cashel, for example, used to have a population of 3,000. At one point, I knew the precise number of houses in the town — 600 — because this information was required when doing a canvass. The number of houses in Cashel has increased at least threefold since then, which is equivalent to creating two new towns. Although services such as water, sewerage, roads and landscaping are, in the main, reasonably good, consideration has not been given to other aspects of development which are essential to community life. There is nothing to prevent development charges being expended on these back-up services. Those who provide the money know best what is needed. If everyone in a development of 300 to 400 houses pays a development fee, it adds up to a significant sum. It should be possible to interact with those who pay charges to determine what facilities are required. My principal argument, therefore, is that expansive and innovative guidelines must [1587]apply to the manner in which development charges are spent.

Mr. Dardis: Information on John Dardis  Zoom on John Dardis  I am fascinated that the intensity of the thunder emanating from the Opposition benches on the Order of Business on certain issues is only matched by the silence from Opposition Senators when the matters in question are debated in detail. I thank those Senators who contributed to the debate and I am sure the Minister will take on board the useful proposals they made. I am encouraged also by the Minister’s positive contribution and thank him, in particular, for his undertaking to amend the code of practice for civil and public servants. I also welcome his decision to publish the new provisions shortly and to write to county managers reminding them of their obligations under section 48 as regards how moneys are expended.

One of the problems with the taking in charge of developments, an issue raised by most speakers, is the requirement that estates must first be completed satisfactorily. While the position has improved since the legislation was introduced, I can recall cases of developers deliberately failing to complete estates to prevent them being taken in charge. After years of delay, the original bonds put up by the developers were of such little value that they could afford to sacrifice them.

I note the differences between apartment developments and other types of development highlighted by the Minister and accept that management companies may be necessary in the case of the former. From personal experience, the management company in the apartment block in which my daughter lives has been very good and I have no criticism of it.

Another issue raised was the practice of placing gates on developments. This creates private estates and gives rise to the access difficulties outlined by Senator Brady who recalled being told to stay off private property while canvassing. This is a two-edged sword.

A thread running through the debate was the need for regulation to keep abreast of changing circumstances. Builders are clever and employ clever lawyers who are able to run rings around the law. If legal loopholes exist, it is our obligation to close them.

It is interesting to note criticism of local authorities made by Senators from parties which control the councils in question. The Minister spoke of the role of local authority members in taking in charge estates and contribution schemes. County Kildare, which is controlled by Fine Gael and the Labour Party, has been the focus of some of the heaviest criticism in some of these matters. One wonders how these two parties can have one standard for what they perceive to be national deficiencies in these areas, while overlooking the fact that they control some of the local authorities in question. Their attitude reminds one of the posters which have been erected around the capital informing us what Deputy Kenny will do with wasters. What will he do with the wasters about whom Senator Brian Hayes spoke, those respon[1588]sible for having four people employed in administration for every person working on the ground? Issues such as these resonate.

Senators referred to underfunded local authorities. This year, €9 billion has been allocated to local authorities from central funds, six times more than the allocation made when the Labour Party and Fine Gael were last in power. If local authorities have so little money, what are they doing with this sum of €9 billion? Perhaps an auditing exercise is required although, I am aware the public auditor audits the local authorities.

Senators voiced criticism of the lack of social and affordable housing. Given that Kildare County Council, my local authority, and Dún Laoghaire-Rathdown County Council, another authority controlled by the Labour Party and Fine Gael, do not have good records in this area, it is time for certain political parties to get their own houses in order before criticising others.

Senator Jim Walsh made a valuable contribution on the need to examine the capital account in conjunction with the annual returns. Another thread running through this debate is the need for consistency, uniformity, transparency and accountability to give people confidence that the system is working properly. The Minister has outlined the local authorities’ obligations. However, members of local authorities find that trying to get details on revenue is akin to pulling teeth. While one will be given a global figure, it is difficult to determine how much is raised in specific estates.

I accept that all the money raised in a given estate cannot be spent on the estate concerned because local authorities must also meet wider infrastructure costs, including those arising in areas where people do not live. Nevertheless, members should be given information on the areas on which money is spent. I believe the Minister accepts this proposition, having indicated that he proposes to raise the matter with local authorities.

I welcome the Minister’s comments on amending the code of conduct and the obligations of members. This has been a good debate which I hope will advance the issue. I also hope the Minister will leave the House with some good ideas and will carefully consider what steps can be taken.

Motion put and declared carried.

Sitting suspended at 6.40 p.m. and resumed at 7.15 p.m.


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