Committee Reports::Final Report - Appropriation Accounts 1988::27 July, 1990::Appendix


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APPENDIX 39

27 July, 1990.

Ms. Aileen McHugh,

Clerk to the Committee of Public Accounts,

Leinster House,

Dublin 2.

Dear Ms. McHugh,

In the course of the Committee’s examination of the 1988 Appropriation Accounts for the Department of the Environment, the Chairman referred to the use of capital receipts by local authorities for refurbishment of their housing stock and enquired whether the existing arrangements were putting an unnecessary cost on central Government. I undertook to discuss the matter with the Department of the Environment and to write to the Committee.

Expenditure by local authorities on the maintenance or improvement of their housing stock which is funded out of revenue resources does not require the approval of the Department. However, expenditure on improvements that is funded from capital resources comes within the Public Capital Programme and is controlled by reference to each authority’s capital allocation in the same way as other capital expenditure.

The great bulk of internal housing capital resources generated by local authorities comprises the proceeds of house sales. These dwellings were almost entirely provided out of State funds and it seems proper that the proceeds from their sale should be used for new expenditure on the ongoing programme and that such expenditure should be subject to State control. It is necessary to ensure that the allocation of such funds as they become available is done in accordance with overall need.

Within their allocation, each local authority has discretion as to the particular houses or schemes they wish to proceed with and they also have some discretion as to the relative priorities within the allocation as between the provision and improvement of dwellings.

It is very much in the interests of cost effectiveness of expenditure that the cost planning and control procedures of the Department of the Environment should continue to apply to works carried out by local authorities to ensure that value for money is obtained in the programme as a whole.

Yours sincerely,

L. DRAIN,

Department of Finance.