Committee Reports > List of Committees > Dáil > 1990 > Committee of Public Accounts > Final Report - Appropriation Accounts 1988

AN COISTE UM CHUNTAIS POIBLÍ

(Committee of Public Accounts)

Déardaoin, 31 Bealtaine, 1990.

Thursday, 31 May, 1990.

The Committee met at 11 a.m.

Members Present

DEPUTY G. MITCHELL in the chair

Mr. P. L. McDonnell (An tArd Reachtaire Cuntas agus Ciste) called and examined.

VOTE 26 — ENVIRONMENT.

Mr. Thomas Troy (Secretary, Department of the Environment) and Mr. Liam Drain (Principal Officer, Department of Finance) called and examined.

Chairman.—The Committee of Public Accounts of Dáil Éireann is this morning examining the Accounting Officer for the Department of the Environment, the Secretary, Mr. Thomas Troy, on the audited accounts for 1988.

Paragraph 30 of the Report of the Comptroller and Auditor General reads:

Subhead D.8.—Grants to Housing Finance Agency, plc

Reference was made in paragraph 33 of my 1986 Report to the making of a special grant to the Housing Finance Agency plc (HFA) to cover accumulated losses and bad debts. At that time Section 14 of the governing legislation, the Housing Finance Agency Act, 1981, required the HFA to secure that, taking one year with another, all its costs were met from its operations. The Housing Finance Agency (Amendment) Act, 1988 gave retrospective legislative authority for making contributions from voted moneys towards the costs incurred by the HFA and effectively removed the statutory requirement for it to pay its own way.

In 1986 the Government approved the use of an “interest swap” arrangement as a means of further financial support for the HFA. This arrangement provided that the Exchequer would take responsibility for the payment of interest on capital borrowed by the HFA from financial institutions at the going rate of interest, while the liability of the HFA would be limited to the interest which would be payable if it had raised the same capital sum as a 4% index linked loan. This arrangement is put into effect by paying the difference between the two interest amounts to the HFA from Subhead D.8; a total of some £14.3m was paid to the HFA in 1987 and 1988 of which £5.3m was paid in 1988. This will be offset by a payment to be made to the Exchequer by the HFA of an amount equivalent to the premium on redemption it would have had to pay to financial institutions if it had borrowed the same capital sum as an index linked loan at 4%, i.e. the additional sum payable to a lender to preserve the real value of the principal originally borrowed. The 1988 audited accounts of the HFA include a provision of £5.3m to cover this future contribution for 1987 and 1988 to the Exchequer. Accordingly, up to the end of 1988 the net interest subsidy to the HFA under this arrangement is £9m which, together with the £6.9m paid in 1986 to meet accumulated losses and bad debts, brings the present net total subvention from voted moneys to £15.9m.

Mr. McDonnell.—This paragraph deals with the Housing Finance Agency. Although the agency was set up on the basis that it would be self-financing, those expectations were not realised. What I have done in this paragraph is to set out the extent to which it had to be given financial assistance up to the end of 1988. You will recall in a previous year I was also concerned with the lack of statutory authority for giving it financial assistance, but that was regularised by the passage of legislation in 1988. The agency has been assisted in two ways, first by a direct contribution of £6.9 million to meet losses which were incurred in the earlier years and, second, on an on-going basis under a formula which, in effect, subsidises the agency’s cost of borrowing on the open market. This is the interest swap arrangement, which is outlined in the paragraph. The cost of this is expected to be reduced by the premium on redemption, which the agency will pay to the Exchequer when it repays its loans. That interest swap arrangement is set out there.

At the end of 1988 the gross vote payments under the swap arrangement totalled £14.3 million and, at that stage, the agency had provided for an offsetting payment of £5.3 million to the Exchequer. I would not like to speculate as to the extent to which all of the interest subsidy will ultimately be recovered. The position is that £14.3 million in this interest subsidy is offset by a provision in the agency’s account at the end of 1988 of £5.3 million. As for the £6.9 million which the agency got to meet its losses in the earlier years. I do not think there was ever any suggestion of that being recovered. What we are dealing with here is the formula for the interest swap arrangement.

Chairman.—We have a lot of figures here. Up to the end of 1988 the net subvention from voted moneys to the Housing Finance Agency was £15.9 million.

Mr. McDonnell.—I have included that, Chairman, If you take the £6.9 million which the agency got in 1986 to meet losses and bad debts up to that date, that was a once-off payment. Through this formula for the Exchequer taking responsibility for the cost of the agency’s borrowing on the open market and subsidising the borrowing costs, the agency has been paid £14.3 million. If you add the £14.3 million and the £6.9 million you will get £21.2 million. The agency has at the end of 1988 provided for an offsetting payment to be made to the Exchequer of £5.3 million. That is how I get the £15.9 million.

Chairman.—So the net figure is, in fact, £15.9 million? The gross figure is £21.2 million.

Mr. McDonnell.—It comprises two elements, a once-off payment of £6.9 million and a net interest subsidy of £9 million. Is that clear?

Chairman.—Yes. Mr. Troy, could you tell the Committee what the position was at the end of 1989 by comparison?

Mr. Troy.—There was a big improvement and the net cost of the swap was approximately £3 million but in consultation with the Department of Finance some of that was netted off as a sort of a profit, so that it was £1.9 million or thereabouts.

Chairman.—Was that for the year; that was not the accumulated situation?

Mr. Troy.—No. For the whole year.

Chairman.—So the accumulated situation at the end of 1989 was what?

Mr. Troy.—You could add another £2 million.

Chairman.—So that is £18 million.

Mr. Troy.—And another £1 million this year, approximately.

Chairman.—So, £19 million in 1990.

Mr. Troy.—It was a once-off item. It is going down.

Chairman.—Where is the Housing Finance Agency going to then? What is its long-term future?

Mr. Troy.—Its present function is to supply funds to the local authorities for the two types of loans, the annuity type and the income-related type. It has the advantage that it is not Exchequer borrowing; it is public sector borrowing all right, but it does not form part of the Exchequer borrowing requirement.

Chairman.—When the scheme was originally introduced it helped a lot of people who simply could not get housed, and there was a serious housing problem. A lot of these people whose income had remained more or less static, now find that because their incomes have grown they are making very substantial payments compared to what they were making five years ago. Is there any plan to change that, to give those people a way out?

Mr. Troy.—We think the problem there is beginning to improve. The total number of houses, for example, that were repossessed was about 300. The total number of arrears, in the sense of defaulting arrears, was approximately the same. Of the houses that were repossessed most of the people had actually walked away from the houses, had emigrated. It was happening at the rate of about 100 a year but, so far as we know at the moment, nothing is happening.

Chairman.—How many people have HFA loans nationally?

Mr. Troy.—Fifteen thousand altogether, as of now.

Chairman.—Do you think it served its purpose?

Mr. Troy.—I think it was a very good idea, a particularly good idea at the time and it still serves a fairly good purpose.

Deputy Allen.—I wanted to translate the figures into people. In fact, Mr. Troy has done that to a degree. What I was worried about was the Comptroller’s first paragraph, in relation to bad debts and the £15.9 million that had to be funded from the Exchequer. I wanted that translated into human beings, the number of applicants and the problem of repossessions and evictions. You have given those figures of 300 repossessions or evictions and 300 other serious arrears. I know from my own experience, despite what you said, that if repossessions or evictions take place the majority of people then transfer to the local authority housing list. On leaving say, a £30,000 house that was supplied through your funding, they are transferred to a local authority house, which might cost even more. I am just wondering if that whole area has been explored. Could there be an interlink between the Department and the HFA, so that the properties could be transferred to local authorities to avoid the trauma of repossession which is a major problem and has been increasing?

Mr. Troy.—It is a perennial problem. There is the other side of the coin, that you cannot permit total default. Local authorities do, in fact, sometimes take into their stock the house in question and keep the people on as tenants. It can lead to abuse.

Deputy Allen.—I would say, Chairman, it is a very hit-and-miss situation and it depends on the goodwill of the local authority. Should there be a departmental formula arrangement whereby in cases of hardship — and I know there are cases of abuse — that the Department and the HFA would cut the red tape and show some compassion to people who, through unemployment or other family difficulties, have gone into debt? A survey that I carried out with all the local authorities over the last four months shows that it is a major problem, and I have figures to back that up. What it requires is some flexibility between the Department and the HFA. There is no point in evicting somebody or repossessing and then transferring them into another local authority house.

Mr. Troy.—It would really be with the local authority, because the HFA in its new role is a provider of finance to the local authority, and the local authority takes it from there and bears any losses that arise. It is they who have to decide whether in particular cases they should act as you suggest. We have been in touch with them. The Minister has circularised them on occasion and they are aware of the need for sensitive treatment of this.

Deputy Allen.—I am sorry for labouring this but what the Minister said in a recent circular letter was that each local authority should do what it feels is appropriate. I am saying that consideration should be given to a national scheme to avoid this whole trauma and that the Department should give funding to it, not take power away. I am not making a political point, I am making a point to eliminate a huge trauma for many people. I can give you figures. The Department should give the lead in indicating to local authorities what could and should be done.

Mr. Troy.—We could certainly look at it.

Deputy Allen.—It is all about funding.

Mr. Troy.—I would be worried about the funding part.

Deputy Allen.—When I say funding, it is only the transfer of funding from one arm of the Department to another because if you evict and repossess a £30,000 house, you are giving one in return.

Mr. Troy.—What happens is that out of the local authority allocation for local authority housing, they buy that house and they repay the HFA with the money. There is really no problem.

Deputy Allen.—To build a house they are given an allocation, anyway. It is just the same money coming from the Central Fund but flexibility would avoid the national trauma that does exist. It is a major problem.

Mr. Troy.—The flexibility is there but you cannot make it too uniform, too much announced in advance.

Deputy Allen.—I would submit that it is not there and there is a huge divergence between local authorities. Neighbouring local authorities can have different guidelines in relation to evictions and repossessions. The evidence does exist and I have evidence that it does exist. A national lead is required.

Mr. Troy.—Whatever about a national scheme, we will certainly take it up with the local authorities.

Deputy McGahon.—While this scheme was well-intentioned initially, I would have to describe it as a harebrained scheme, and people who came to me seeking advice, I always tried to steer them away from this. Mr. Troy used the word “flexibility” and, of course, that was the key word in this scheme, but there was too much flexibility in it. Indeed, if a person, a subscriber, was lax in making his repayments or did it haphazardly, his grandchildren could have been paying for the house and it would be a very dear house. While I accept that the scheme was well-intentioned, it certainly was not a good one for people for whom in many cases it was a last resort in a desire to buy their own homes. Is it a fact that the scheme is likely to peter out?

Mr. Troy.—The scheme, in the form in which you are referring to it, is actually gone.

Deputy McGahon.—It should never have been brought in.

Mr. Troy.—It was suitable for the time.

Deputy McGahon.—It saddled young people at the lower end of the market with an impossible dream. While I accept that it was well-intentioned, it was a crazy scheme. Is there any way in which those people who are still caught in the net can switch to any other type of scheme?

Mr. Troy.—They can switch to an annuity any time they like but there is provision.

Deputy McGahon.—There is provision?

Mr. Troy.—Oh, yes.

Deputy McGahon.—At favourable reasonable rates?

Mr. Troy.—At the going rate.

Deputy McGahon.—So they can get out of the HFA?

Mr. Troy.—Yes. Could I just add to that as an information point that there was massive repayment of those loans to the HFA in 1988? They were able to get better terms in the private sector and repay those loans.

Deputy Dennehy.—I am glad that the last point emerged, because it might appear that the HFA system was totally bad and that picture is obviously incorrect. Everybody should have been aware that there was the facility to switch from one to the other. Again, to put it in context, there were 15,000 loans given in total. What number was there difficulty with? We have been given percentages or numbers per year, but what would be the total number that there would have been difficulty with?

Mr. Troy.—Counting repossessions and serious deliberate arrears, about 600 altogether out of the 15,000.

Deputy Dennehy.—I think that is a figure that we should try to get across, to broadcast. It might appear different from some of the allegations that have been made — and even one case of eviction is one too many; all of us accept that. I do think that the ratio of 600 in difficulty out of 15,000, taking any form of funding is relatively small, because no matter where you borrow or what you do, there will be cases where people will, through unemployment or whatever, run into difficulty. I would go down a bit of the road with my colleague, Deputy Allen. Both of us are members of Cork Corporation. We have asked in the past that there would be a facility for repossessing the house and leaving the tenant in it. I would worry that we would go from giving discretion to the local authorities to dictate from central Government. I would prefer that the discretion was there. It is then up to the members of that local authority to implement it in a humane fashion. We are trying to get away from dictate from the centre, so I would prefer if we had discretion built in locally and it is up to the public representatives to see that that is encouraged. I do think that we needed to put into context the numbers there were difficulties with, because this was a very successful scheme for those of us who had been pushing up to then, trying to set up a scheme whereby people who were short of £5,000 or £6,000 — and everybody seemed to be short — would have a facility. It certainly filled a very great need at that time. Once we take care of the aspect of being able to repossess or allow a tenant in, which is just one aspect with which there were difficulties, it was a good scheme. There were facilities that obviously Deputy McGahon was not aware of, the facility to switch the type of loan. That was there from the outset and one could switch after the six or 12 months to the annuity system. We would want to publicise that fact as well as the bad aspects of it.

Deputy Allen.—Could I put on the record, in case my words would be misinterpreted, that, first of all, 600 out of 15,000 is 4 per cent of all loans? What I was asking for was flexible national guidelines which would allow authorities to be uniform in their approach to this major problem. Could I also clarify that the flexibility only commenced early this year, or late last year? In other words, the ability to transfer from the HFA to annuity has not been there for years; it only commenced earlier this year. Is that right?

Mr. Troy.—Yes, that is right. There was the five year provision. There is a third category. You could have the income-related system for up to five years and then switch.

Deputy Allen.—There was a circular earlier this year from the Minister which allowed a transfer to the annuity. It did not exist up to then.

Mr. Troy.—No.

Deputy McGahon.—On a point of information, in relation to Deputy Dennehy’s comments, I do not believe it was a good scheme and I think the number of people who fled it testify to that belief. People were desperate who had to resort to the HFA and while I do not doubt the well-intentioned aspect of it, it was a bad scheme for young married people to embark on. That is why it is petering out.

Chairman.—I think it is only fair to say in relation to this scheme that at the time there was a very serious housing crisis and it was a question of trying to come to terms with that situation. A number of schemes were introduced, the HFA house building programme, loans and grants for people to surrender tenancy of corporation houses and move on. These schemes, when you put them together, did have the effect that they were meant to have. Perhaps the way the interest rates operated in the HFA left much to be desired. It was a question of working with the tools which were available at the time. I would like to put that point on the record just in case we get a distorted view.

Finally, Mr. Troy, you said that the accumulated subvention at the end of this year would be something like £19 million. What sort of percentage is that? How do you justify that as a figure? Do you think it is reasonable in the circumstances?

Mr. Troy.—In view of the trend, it is. If it were going at the rate at which it was going some years ago we would not be able to continue on that basis, but it has come down quite low. It is really a once-off payment, as the Comptroller and Auditor General mentioned.

Chairman.—Could you put it in context for us?

Mr. Troy.—In 1990 we are only providing £1 million.

Chairman.—Out of what sort of total figure?

Mr. Troy.—The total amount, in very round figures, from the HFA is about £400 million altogether, £300 million roughly in direct loans and £100 million to local authorities.

Chairman.—Of the £400 million the accumulated subvention at the end of 1990 would be £19 million?

Mr. Troy.—That is correct.

Deputy Allen.—In relation to the reduction in loans this year, it has come about, it must be said, because of the conditions placed on applicants who have to apply to banks and other financial institutions before they can submit an application to the local authorities. Therefore, people are being driven, I would say, away from the Department of the Environment funded schemes into the financial institutions because of the conditions put on them, they have to get two letters of refusal before they can even apply for a loan, so it is not a willing drift away from the local authority funded schemes. It is one that has been imposed on people because of the condition of having to get two letters of refusal.

Mr. Troy.—To put it another way, the mortgage market is much more favourable now than it was. There is more competition: the banks have come in, and there is greater ease with which people can acquire mortgages. There are no longer queues, mortgage famines and so on, so in those circumstances if it is available in the private sector, why should it be pushed on the public side?

Deputy Allen.—Just in case the impression would be given that it is a willing drift from local authority funded schemes, I am saying that it is an imposed condition.

Chairman.—I think we have covered this particular point and put it on the record, and the best thing we can do at this stage is note this particular paragraph.

Paragraph 31 of the Report of the Comptroller and Auditor General reads:

Subhead R.—Research, Analytical and Related Services, etc.

An Foras Forbartha was established in March 1964 as a limited company with the object of undertaking research into the physical planning and development of the environment. In July 1987 the Government decided to wind up the company and subsequently decided to establish an alternative organisation to carry out the essential services being carried out by An Foras. The Environmental Research Unit (ERU) was established in February 1988 by statutory instrument as a corporate body under the Local Government Services (Corporate Bodies) Act, 1971 to provide for the Minister for the Environment and local authorities such research, analytical, monitoring, advisory or other services in relation to environmental or infrastructural matters as the Minister may direct. The ERU operates through a management committee appointed by the Minister from officers of his Department. The new body began to operate in September 1988. Its expenses are met from Subhead R, while income will be brought to account as Appropriations in Aid of the Vote.

In 1988 a total of £3m was charged to subhead R comprising £2.5m in grants paid to An Foras Forbartha for salaries, accommodation and overheads and £0.5m for the expenses of the ERU paid directly by the Department, including the salaries of former staff of An Foras who took up duty in the ERU in September 1988. A further £85,000 was received from Vote 46.—Increases in Remuneration and Pensions and £623,430 from Vote 47.—Public Service Early Retirement Payments.

The position regarding staff of An Foras as at 30 June 1989 was:—

The winding up of An Foras is still in progress.

Mr. McDonnell.—What I have done in paragraph 31 is to outline the administrative and financial arrangements which resulted from the Government decision taken in the middle of 1987 to abolish An Foras Forbartha and to establish the Environmental Research Unit in September 1988. Inevitably, the winding up of an organisation such as An Foras Forbartha would take time. You will see that in 1988 a grant of £2.5 million was needed to meet staff costs and overheads, but the amount required and paid to An Foras Forbartha in 1989 — this is not shown in the paragraph — was a further £127,000. You will also see in the table that, about two years after the Government decision most of the staff had been dealt with. The actual winding up, as I understand it, has not yet been finally completed, but there are only two staff now employed directly by An Foras Forbartha.

Chairman.—I do not think we need spend too much time on this paragraph.

Deputy Allen.—Could you quantify, the total cost to the Exchequer to date of the winding down of An Foras Forbartha.

Mr. Troy.—I can get that figure. It is a bit tricky because there is the voluntary redundancy scheme for which we would have to get the cost in relation to the staff of An Foras Forbartha. There are transfers to local authorities, redeployment to other Government Departments, and how do you cost these? I think, in fact, there is not a cost in the sense the Deputy is probably thinking of. The overall cost from An Foras Forbartha has been going down. That is really what has been happening because we have been running a slimmer operation and it is how long we had to hold onto other people until we could dispose of them this way and that way.

Deputy Allen.—I do not accept that answer, in that the duties of An Foras Forbartha had to be transferred to the Environmental Research Unit of the Department, so there is a cost there, not a saving. It is just a transfer of costs to another section within the Department. What I am talking specifically about are the moneys that have been paid out by way of redundancies, cessation payments and if there has been termination of rental contracts for offices occupied by An Foras Forbartha. I would like to know what the overall cost to the Exchequer has been during the winding down process.

Mr. Troy.—Indeed, it is certain that the costs are going down, it is just to get the figures. They are what we need because, for example, something like 78 staff have been transferred to the Environmental Research Unit, the unit within the Department. They are paid the same as they were paid in An Foras Forbartha and they are doing the same work. Thirty-one who were employed by An Foras Forbartha have been seconded to local authorities and they continue to do the same work out there. They are legally, for the moment, employed by An Foras Forbartha, but there is no disruption of the work they have done. The saving has taken place in retirements without replacements and in the voluntary redundancy package. There would be lump sums the first year but there would be savings thereafter, and it is a question of calculating all these. There has been a saving overall, that is all we can assert even now, and it will get bigger as time goes on. We will get a detailed note on that for the Deputy and it will run over a few years.

Deputy Allen.—Were there any leases involved that had to be dealt with?

Mr. Troy.—There were problems, but we would have to get the figures for that, too. Accommodation was relet and so on. It is a complicated matter running over three years.

Deputy Allen.—I think, Chairman, we have a duty as a Committee to assess the way moneys have been saved or whether there has been a net cost to the Exchequer, and without details of the termination of leasing arrange ments we cannot do that. I feel this Committee deserve a detailed breakdown of the costs involved.

Mr. Troy.—There will be no problem about that, except we have to assemble it.

Chairman.—You might include in the note what happened to office accommodation and equipment.

Deputy Dennehy.—Obviously, Chairman, as has been said by the Accounting Officer, we would be looking for these savings, and it is almost impossible to assess this until the end of the three year period. But if we are going to go down this road on costings, you are talking of a staff of 212 originally, many of whom are now redeployed and doing work elsewhere that needed to be done without having to recruit extra staff. So there are a whole lot of balancing factors there. The implications of many of these will not be known certainly for three or four years. It may be a political exercise to put down the initial cost because you are talking of leases and so on, but you will also be talking of not having long-term renting arrangements and waste of public funds in many cases. We would need to treat it fairly carefully for balances, but there will be savings and, certainly, in the long term, there will really be massive savings. There will be people available to do work that was required in other areas where they have been redeployed, for instance, working for the local authorities, etc., where people could not get staff up to then. We would need a fairly careful examination and a balancing of costings and savings and I would like to see the chart taken over three years at least rather than just from the top of the head, as we are taking the figures at the moment. As was emphasised, when this scheme was brought in it was a long-term arrangement and we are all very well aware of that.

Deputy Allen.—I am not looking for any top of the head figures. I am looking for figures that we are entitled to as a committee and once we get the figures we can decide, and our Comptroller and Auditor General can decide on whether there have been savings or not. We will make no assumptions at this stage, but we are entitled to the figures.

Chairman.—You will send on a detailed note, Mr. Troy.

Mr. Troy.—We will.

Chairman.—I am very anxious to keep both of my Cork colleagues happy.

Deputy Dennehy.—We did not just look for the costs, we are looking for the savings as well. The costings are the only things mentioned to date.

Chairman.—You will include as much detail as you can, Mr. Troy?

Mr. Troy.—We will.

Paragraph 32 of the Report of the Comptroller and Auditor General reads:

Motor Vehicle Duties

The duties, fees, etc. referred to in this paragraph are collected locally by 29 licensing authorities, lodged to local Motor Tax Bank Accounts and from there transferred to the Central Motor Tax Account in the Central Bank. The Motor Tax Accounts of the licensing authorities are audited by Local Government Auditors and their reports are made available to me.

A test examination of revenue from motor vehicle duties, etc. was carried out with generally satisfactory results. The proceeds for 1988 and 1987 were:

£140 million was paid into the Exchequer during the year leaving a balance of £2.6 compared with £1.6 million at the end of the previous year. Driving test fees are appropriated in aid of the Vote (Subhead U).

There were no receipts in 1988 in respect of State-owned vehicles as, in December 1986, the Department of Finance agreed that the non-statutory arrangements for the payment of road tax in respect of such vehicles should be terminated.

Mr. McDonnell.—Paragraph 32 is the standard paragraph on the motor vehicle duties, and, if you like, the ancillary receipts, such as traffic-related fines, all of which are ultimately lodged to the central motor tax account before being transferred to the Exchequer. The biggest figure there, of course, is the motor tax and driving licence fees. In that regard, I rely on the audit of the local government and my test examination related to the channelling of the moneys into the Exchequer. I do have a direct role in relation to the audit of the collection and bringing to account of the on-the-spot fines, court fines and so on, by virtue of the fact that the Department of Justice are responsible for administering this activity. I would like to say that while those amounts appear here because they are lodged to the motor tax account, in fact, the Accounting Officer for the Environment Vote does not really have any responsibility in regard to their collection. It is a Department of Justice affair but the amounts go into the motor tax account. That is the statutory position and is a relic of the situation that has existed from the time that there was a road fund in existence.

Chairman.—Mr. Troy, I want to ask you specifically about driving licences. Could you tell the Committee how many people are waiting for driving tests to get a driving licence? Secondly, how long on average have they been waiting? Thirdly, is it correct that in some jurisdictions applicants have to pay the driving licence application fee up to 12 months in advance of being called for a driving test? Would you give the Committee a measure of the situation by answering those questions. Mr. Troy?

Mr. Troy.—The number of tests carried out in 1988 was 72,500 compared with 57,000 in 1989. It is probably the same now. The average waiting period nationally—and that is a sort of crude average—is 38 weeks, although it could be higher or lower in diffreent centres. The final question was about waiting for a year. It would be a very extreme case, but it is possible.

Chairman.—The average is 38 weeks, that is nine months, so presumably, you could have, for instance, in Dublin Corporation somebody waiting a year, and in Cork Corporation somebody waiting six months. It is not beyond the bounds of possibility.

Mr. Troy.—It is not beyond the bounds of possibility.

Chairman.—I actually came across a case myself, which is why I ask you. What are the receipts? What would those 57,000 applicants mean in terms of money paid? I will put it to you in another way. Could you tell the Committee what you would receive in a year from applicants for driving licences?

Mr. Troy.—£1½ millions.

Chairman.—Does that relate to the 57,000 or to one year?

Mr. Troy.—The whole year — everyone who appplies within a particular year.

Chairman.—How many would apply?

Mr. Troy.—In a year, 84,000 would apply.

Chairman.—You would have 84,000 applicants in a year and out of that, at the end of any one year, you would also have about 57,000 waiting. What is that, about two-thirds?

Mr. Troy.—Yes.

Chairman.—Are you not concerned about that situation, Mr. Troy?

Mr. Troy.—We have been for some years.

Chairman.—Does it not mean that many people driving around with provisional licences may not be competent or may be competent and have to pay extra insurance because they cannot get a driving licence, or may be driving without insurance because they cannot afford the extra insurance cost imposed because they cannot get a driving licence?

Mr. Troy.—Certainly, there are insurance problems and job problems as well.

Chairman.—It is a serious situation.

Mr. Troy.—It is, yes.

Chairman.—What can we do to deal with the problem?

Mr. Troy.—We could not do anything until this year because there was a very firm Government policy which had to be applied acrosss the board to restrain public expenditure and public recruitment.

Chairman.—In fairness, this problem has occurred over a number of years. No matter who are in Government, it always seems to be a problem.

Mr. Troy.—Yes, because the number of people looking for tests kept going up and the number of driving testers kept going down. There is no way to get a driving test except to have a driving test or to test the person. If the number of testers is not sufficient, then the backlog grows. It was fundamentally a question of Government policy which I believe had to be applied in the rigorous way in which it was, uniformly, even at the expense of services not being as good as they should be. This year, the Minister for Finance announced that there would be selective recruitment. That is our best beacon of hope for the moment but we have got concessions in the past by getting people through redeployment, which proved rather difficult because not everybody was interested in this kind of job. This year we ran a Civil Service examination and we expect to have fairly hefty recruitment on the basis of it. The Minister is also considering some temporary, once-off arrangemen that would deal with the backlog and in which, perhaps, the AA might be involved. However, there are no decisions.

Chairman.—In other words, you might be able to bring in people who would help on a once-off occasion to clear the arrears?

Mr. Troy.—Yes, but on a contract basis.

Chairman.—No decision has been made. Certainly, something needs to be done. Could you tell the Committee finally, Mr. Troy, how the situation in the Republic compares with that in Northern Ireland in terms of delays and the number of weeks it takes to get a licance?

Mr. Troy.—I know an interesting thing about that, which does not apply at the moment. The British had a longer queue than we had in 1978. They had been told to do something about it by the British Cabinet, and just at that time we had the amnesty here. That raised a lot of interest until they saw the result of it and the backlash of opinion and so on. On that particular occasion, the British waiting list was about six to seven months— I can remember that because I was involved at the time—and it took them several years to get it down, but it is much better than ours is at the moment. It has been as high as ours from time to time.

Chairman.—I think you would have very strong support from the Committee. Mr. Troy, in trying to clear the position because it is unfair that we should retain these funds for the best part of a year—the lion’s share of £1½ million—given also the possible implications for people not being able to get insurance, or driving without insurance, or not being able to get jobs. It is a serious situation.

Mr. Troy.—It is.

Chairman.—I am glad to hear that progress has been made. We have Deputy Dennehy, Deputy McGahon and Deputy Bernard Allen offering.

Deputy Dennehy.—I would totally agree with you about the question of support for any solution, although holding the money is the least of the problems really. It is a small amount of money for individuals but the difficulties, particularly in regard to jobs where people require a full licence, is hitting very many people. I know there are attempts to facilitate people as much as possible, but that is very limited. Insurance is crippling, particularly for young people who have to pay extra, and we are all aware of dozens of cases. There are little anomalies that add to the difficulty. One of the instances which I have tried to get corrected concerns people who have gone outside the State, voluntary workers, clergy, or people like this. They are driving in their adopted country for maybe 15 or 20 years and they come back and must take a test. People go abroad, for instance, to work in a satellite company or a company associated with their own and come back after five years and then must take a re-test. Particularly in the first instance I have asked that this would be reviewed. These people are driving under international licences elsewhere, but when they come back to this little country they are told that they must do our country’s test.

That is just one of the problems. I think there are many others that could be looked at to try to cut down on the figure of 84,000. First of all, narrowing it down to my own field, could I ask what the average delay is in the Cork area? We have Cork city testing. How many testers do we have there. How many should there be? What is the full establishment? I would also like to know, in trying to deal with the problem, how many it is hoped to recruit at this time. What it is about really is recruitment, rather than a panic situation. We need enough testers to cope with 84,000 applicants. I saw from the income last year that 80,000 more came in than was estimated. So there are a greater number of people looking for tests. We are told that the amnesty in 1978 and 1979 would lead to a bloodbath on the roads. I would like to ask at this stage, 11 years on, if we had any indications that this was the case, or if there were any greater number of accidents which could have been attributed to people who got through during the amnesty. The emotive terms were used but I did not see any great deterioration. I would like to know how many recruits we intend to take on to deal with the work and how quickly they will be taken on? Could I also have the details for the Cork centre?

Mr. Troy.—The other interesting question you asked was what effect had the amnesty. The rate of accidents fell after the amnesty.

Deputy Dennehy.—I expected that. People had claimed at the time—real off-the-top-of-the-head stuff—that there would be a bloodbath. That was one term that hit the headlines from several contributors, and we certainly did not get that.

Mr. Troy.—Incidentally, the record of provisional licence holders is better than that. We do not have the Cork figures.

Deputy Dennehy.—That should be certified. That is one of the most important centres in the country.

Mr. Troy.—We can send a note.

Deputy Dennehy.—It appears to be extremely bad there. There may be circumstances outside your control. Was there any suggestion to shift the centre of power, the regional centre, which would be Cork, to Limerick?

Mr. Troy.—I doubt it very much.

Deputy Dennehy.—You might check that.

Deputy McGahon.—While we might not have had a bloodbath it is a fact that we have the highest number of accidents, and also the highest number of fatal accidents, per head of population in the EC. I do not think we can take any comfort from that. It does seem that. in relation to the delays in obtaining a driving test, there is a lot of money out there that could easily have been brought in and which would be self-financing, if extra staff were made available. The problem seems to be driving instructors. On previous occasions we were told there were very few driving instructors and they were difficult to get. Why should that be so? Are they all opening driving schools or what is the difficulty?

Mr. Troy.—The difficulty on the previous occasion was that because of the embargo any testers would have to be from within the Civil Service. It will be an open competition this time, so there will not be a problem.

Deputy McGahon.—How many driving test ers are there in the country?

Mr. Troy.—If I could put it like this, the number of candidates who applied for the job is about 700.

Mr. McGahon.—How many driving instructors are there?

Mr. Troy.—There is no registration of them.

Mr. McGahon.—Could you hazard a guess?

Mr. Troy.—No, I will not.

Mr. McGahon.—In other words you are not telling me.

Mr. Troy.—I do not know.

Mr. McGahon.—Surely you should know, Mr. Troy, with respect.

Mr. Troy.—Sorry, there are 48 testers, plus six supervisory testers.

Deputy McGahon.—For 84,000 applicants. It is no wonder there is a delay, in many cases of up to a year. Surely if more people were employed the Exchequer could benefit. It would be self-financing.

Mr. Troy.—Not really. We would lose money if we had more.

Deputy McGahon.—Is it possible for a person living in the Border areas to go across the Border and obtain a driving licence which would be valid in the South?

Mr. Troy.—If the person was a visitor it would be.

Deputy McGahon.—If he was a resident?

Mr. Troy.—If he was a bona fide resident in the North, got his licence and then came down here to take up residence he could exchange it for an Irish licence without a test.

Deputy Allen.—In view of the comments made earlier about the 57,000 on the waiting list, the Cork situation is an absolute shambles where people, who are on the waiting list, can obtain jobs if they can get driving licences. Has any consideration been given at this stage to granting an amnesty to the people who have applied? Obviously, the people who have applied for driving tests are under instruction awaiting driving tests and they are people who are reasonably competent. If an amnesty was confined to the people who have applied, we would be reasonably confident that they would be people who have taken instruction and they should be given some consideration.

Mr. Troy.—There is a lot to be said for it. I have to say there was no real consideration given to that. It was felt it could not be done. It is an interesting idea.

Deputy Allen.—Could we have the total number of vehicles registered and could we then have the number that are taxed each year, or for 1989? What percentage are taxed as against registered?

Mr. Troy.—The number of registered vehicles is slightly over one million at present. The untaxed use of vehicles is between 6 per cent and 8 per cent, according to our calculations.

Deputy Allen.—That loss to the Exchequer would be in the region of?

Mr. Troy.—£10 million to £12 million.

Deputy Allen.—Could I ask the Secretary what steps are being taken, in conjunction with other Departments, to rectify this major loss to the Exchequer?

Mr. Troy.—There are two steps to be taken. One is enforcement plus higher fines in the courts. The second is to develop more our arrears notices from the vehicle registration unit in Shannon. We had a system operating there early in 1988, which reminded people in arrears and then, when there was not a positive response we gave the information to the Garda and the Garda were taking it up. Problems arose in Shannon. The work fell behind and that was one of the items that had to be abandoned.

Deputy Allen.—Could I ask the nature of the problems in Shannon?

Mr. Troy.—There was a shortage of staff and some industrial action as a consequence. Obviously, with the nature of that work, the current file has to be kept up to date or there is no point in it. For the moment we are concentrating entirely on getting the current work up to date.

Deputy Allen.—Therefore, because of the problems in Shannon, there is no realistic attempt being made to rectify the loss to the Exchequer of £10 million per year in enforcement and communication between the Department and the Department of Justice.

Mr. Troy.—There is a lot of enforcement. A huge number of court cases have been taken by the Garda, including those in 1988. That must be the main focus but as the fall back position the arrears notices would have been helpful. At the moment we are not able to get to that.

Deputy Allen.—There is no notification between the Department and the Garda on arrears?

Mr. Troy.—No.

Deputy Allen.—What steps are being taken to rectify that?

Mr. Troy.—Steps are, within the resources we have, to bring the current file up to date and then we will resume dealing with the arrears.

Deputy Allen.—In view of the flexibility that is now being offered by the Minister for Finance will that be a priority area?

Mr. Troy.—We have, in fact, got extra staff there recently. We are slowly but surely bringing it up to date. I think we have enough but it will take some time.

Deputy Allen.—When will the line of communication recommence?

Mr. Troy.—We are about two months behind in Shannon. Whenever that is up to date we will resume the other work, maybe in another few months.

Chairman.—Mr. Troy, it might be interesting if the Committee were to visit Shannon and see how the operation is carried out there?

Mr. Troy.—An excellent idea. It is a very interesting place to see.

Chairman.—Perhaps you will arrange that.

Mr. Troy.—I will of course.

Deputy M. Ahern.—There is a second testing centre in Mallow, County Cork. There were some rumours recently that it was in danger of going out of existence. I wonder if there is any truth in that rumour.

Mr. Troy.—We can give you a note but I doubt it.

Deputy M. Ahern.—Down on paper?

Mr. Troy.—All right.

Deputy Rabbitte.—Mr. Troy, as you know, the whole business of insurance is a very controversial issue at the moment. A great many consumers are terribly disappointed regarding promises to the effect that the abolition of jury trials would lead to an actual reduction in insurance. I always thought that was a bit fanciful but thought that there would be at least stabilistion. In fact, the opposite has happened, as you know. The reasons given are the number of uninsured drivers on the road and, secondly, the accident rate, often ascribed to the percentage of incompetent drivers. Notwithstanding what you have said about the amnesty, it must be presumed that the tests are for a purpose and so on. Have any discussions taken place between your Department and the Department of Industry and Commerce, for example, about what contribution the issue that we are now discussing makes to that insurance problem?

Mr. Troy.—You mean the number of accidents?

Deputy Rabbitte.—I am submitting to you that both the number of accidents and the level of uninsured drivers can be partially attributed to the backlog that we are discussing here.

Mr. Troy.—According to a comprehensive Garda roadside survey carried out in 1987, the number of uninsured vehicles was taken to be between 10 and 14 per cent, but possibly the mean point of about 12 per cent is the best bet.

Chairman.—All right?

Deputy Rabbitte.—No, not all right.

Mr. Troy.—There is a note here to suggest that I was wrong in something that I said earlier. I said 6 to 8 for motor tax. It is really 10 to 12 and the insurance is 6 to 8. I reversed the figures.

Deputy Rabbitte.—So what adjustment does that make to the £10 to £12 million loss to the Exchequer figure that you suggested?

Mr. Troy.—About £13 million or £14 million, that kind of figure.

Deputy Rabbitte.—So that is the contribution that you ascribe to the uninsured driver status.

Mr. Troy.—That is right.

Deputy Rabbitte.—But is there not a second contributory element which is that the rate of accidents, as Deputy McGahon said, is especially high and presumably that to some extent is attributable to inexperienced, unqualified driving?

Mr. Troy.—There are two issues here, first, the rate of accidents and, secondly, the cause of them. On the rate of accidents, it depends on how you define the rate, whether it is vehicle miles or whatever. There are all sorts of measures but on the more usual international measures we are about midway on the EC table. You can define them any number of ways. For example, we have a parliamentary question at the moment about the rate of accidents to children. The number of accidents to children is supposed to be high but this does not take account of the fact that there are more children here than elsewhere. On that particular point, it is a sort of a mean figure in EC terms and the insurance loss would be about 6 per cent to 8 per cent, so I do not think either of these is necessarily the reason for high insurance rates.

Deputy Rabbitte.—Thank you, Mr. Troy. Chairman, would it be in order if I asked Mr. Troy one question on paragraph 31? I was unavoidably late, for which I apologise. I have one straightforward question. Is it intended to keep the Environmental Research Unit separate within your Department and the staffing level that was fixed at the time from the transfer to An Foras Forbartha? I understand that some of the staff have since left for other posts in the service. Is it intended to keep the staffing level at more or less the level fixed at that time?

Mr. Troy.—The ERU? A good many of the staff at the ERU will be transferred to the new agency, the new environmental agency. That has been announced by the Government concerning legislation which is being prepared. I would say that probably the majority of the people in the ERU will be transferred.

Deputy Rabbitte.—So it may well be that in a couple of years’ time we will have an environmental protection agency but not an ERU?

Mr. Troy.—Quite possibly.

Chairman.—Just to conclude on the figures you gave to the Committee, you said that there was 84,000 applicants in one year and that the income would be £1½ million or thereabouts?

Mr. Troy.—Yes. In 1989 there were 84,000 applicants for driving tests and receipts of £1.6 million.

Chairman.—The £1½ million is actually the cost of applying for a test. What is that per test, as a matter of interest?

Mr. Troy.—It is £25 per car test at present, I am told.

Chairman.—£25 per test. Obviously a number of people are holding provisional licences also. In the year that you apply for the test, you may have to apply to renew your provisional licence also. What does the provisional licence cost? How many provisional licence holders are there in any one year and what is the value of that?

Mr. Troy.—The provisional licence now is for two years. It is for £12 for two years. I think there are about 200,000 roughly or 250,000 provisional licence holders.

Chairman.—250,000?

Mr. Troy.—Something of that order, perhaps 200,000.

Chairman.—Would you give a value?

Mr. Troy.—£800,000. I think we had better send you a note, Chairman.

Chairman.—I think you had better.

Paragraph 33 of the Report of the Comptroller and Auditor General reads:

In paragraph 32 of my 1986 Report I referred to a misappropriation of £21,508 of motor tax revenues by an official in a motor tax office (MTO) who had altered documentation to indicate that the amount of duty payable was less than the amount actually paid and had misappropriated the difference. As a result of this irregularity steps were taken by the Department to improve control procedures at all Motor Tax Offices and at the Vehicle Registration Unit (VRU) of the Department of the Environment in order to prevent a recurrence.

However, it was noted that in October 1988 irregularities by an official at another MTO (Kilkenny) were discovered following complaints made by motorists to that office that the VRU had issued reminders incorrectly describing their private cars as goods vehicles. Subsequent investigations revealed that from September 1985 to August 1987 this official had also been altering documentation to indicate a lesser amount of duty payable than was actually paid and had misappropriated the difference. The total misappropriation amounted to £17,696 and this has since been fully recovered.

I asked why despite the improvements in control procedures which the Department had made as a result of the 1986 irregularity, such procedures appeared to have remained deficient at this office up to October 1988 and whether any further action was being taken to ensure that control procedures at all offices are now adequate.

The Accounting Officer stated that the main reason why the fraud was not detected was that the officer concerned adopted different methods of interfering with vehicle licence application forms e.g. initially money was taken from postal applications but this ceased shortly before the introduction of stricter controls over postal applications arising from the 1986 irregularity and instead money was taken from counter transactions. However, when internal procedures in the MTO were tightened up in August 1987 the officer began sending false declaration forms and change of ownership details to the VRU in Shannon to cover up fraudulent transactions.

The Accounting Officer explained that this MTO had experienced an annual increase in the volume of transactions since 1983 without a corresponding increase in staffing levels which were further aggravated by prolonged sick leave of the MTO authorised officer at the time the defalcations commenced. He also stated that following a review carried out after the detection of the Kilkenny irregularity, comprehensive instructions detailing the procedures to be followed at local level had been issued in July 1989 to all MTOs and that planned computerisation of MTOs over the next few years would help to prevent irregularities such as those which had occurred.

Mr. McDonnell.—What I am dealing with here in paragraph 33 is an internal fraud in the Kilkenny Motor Tax Office. There are a number of dates referred to in the paragraph because the perpetrator of the fraud altered the modus operandi, if you like, at certain stages because new procedures were being introduced. The overall position is that this fraud was perpetrated over a period of three years, from September 1985 to October 1988, and involves just under £18,000, all of which, I should say immediately, has been recovered. One of the things that I was concerned about here was that this fraud appeared to exhibit certain characteristics which were similar to those of an earlier internal fraud in another tax office. Especially I was concerned because improvements in control had been made following the earlier discovery. However, you will see Chairman in the paragraph that the Accounting Officer does point out that the procedures introduced as a result of the earlier fraud were, in fact, instrumental somewhat later in bringing the Kilkenny fraud to light. He also points out that further improvements are being put in place on a countrywide basis to prevent a recurrence. Hopefully this will take care of it. I should just add perhaps that the person concerned is no longer employed and has been charged and convicted.

Chairman.—The amount repaid, Mr. Troy, was that repaid by the person concerned or was it covered by insurance?

Mr. Troy.—A third was paid by the person concerned and the balance by the insurance.

Chairman.—So the man lost his job and was charged?

Mr. Troy.—It was a woman and she also has had to pay further because the judge has brought her back. He gave her a suspended two year sentence and brought her back on the year’s anniversary and each time she has to pay £1,000 and account for herself in the preceding year, so £2,000 at least has been recovered in that way.

Chairman.—I do not think that we should have any sort of double jeopardy, but would you assure the Committee that the systems have been tightened up as a result and they have learned from the experience?

Mr. Troy.—Yes, and the complete solution will be complete computerisation which is proceeding. It is the only way.

Chairman.—On Vote 26, I would like to come back to a point which Deputy Dennehy made earlier about decisions being taking centrally and not being left to local authorities. I will give an example, which seems to me to be a waste of money in many cases. Housing committees or councils make decisions regarding housing programmes or refurbishment of flats or maintenance, or whatever it would happen to be, which they are going to fund themselves instead of going to the Department. Even in circumstances like that local authorities are required to submit plans for approval to your Department, even though the country or city manager concerned and the elected representatives at local level have decided they are good projects, and necessary for the area and that they are going to fund them from within their own resources. Why is this amount of checking going on?

Mr. Troy.—I do not think that is quite accurate, Chairman. A refurbishment job that is paid for out of revenue does not have to come—

Chairman.—Let me give you an example, Rathlin Road Flats in Kimmage which the Corporation own. They could not afford to refurbish them so, because it is a blight on the whole area, they rehoused the people from them and sold the flats to a private developer to develop the flats. Should they not be allowed to make a decision about that sale and to use the funds from that to refurbish houses, provide, for instance, bathrooms for houses that do not have them, without having to go through your Department?

Mr. Troy.—It becomes a capital receipt then, of course, when it is from the purchase of a house or the sale of a house.

Chairman.—Should the local authority not have the authority to dispose of their own capital receipts if the elected members in the city or county manager concerned decide that it is reasonable in all the circumstances?

Mr. Troy.—The problem is that there is an overall capital budget and there are different sources that feed into that, and part of the money that feeds into the capital programme are capital receipts.

Chairman.—I make the point. I think there is too much of it and there are a lot of delays which go on unnecessarily, and I know from past dealings with you that you are a man who has a very strong belief in local government. I do think, however that local government should be allowed to have their head in areas like this, particularly where they are not coming to the State directly for funds.

Deputy Dennehy.—On Subhead D.7—Privately Rented Dwellings: Determination of Terms of Tenancy—maybe I am getting the wrong angle on this determination of terms of tenancy. Is this to do with the register of privately owned houses for flats?

Mr. Troy.—Yes.

Deputy Dennehy.—It would seem to have failed badly, taking the financial figures. There was £80,000 allocated for this and only £19,360 was spent, less than a quarter of the actual amount. Why would that be? Do people not respond?

Mr. Troy.—We expected that something like 2,000 to 3,000 people would apply, because their five-year term would come up for renewal. Their terms had been fixed in 1982 and 1983 and we estimated that this many would come up but, in fact, some tiny figure like a couple of hundred is all that came forward. I cannot understand why, they just do not respond. From the point of view of social welfare and so on there is an advantage in getting it fixed by the tribunal and not to be agreeing higher rates with the landlord. Perhaps they are not agreeing higher rates, I just do not know why.

Deputy Dennehy.—Maybe they found some of them did not come out as well from it that it went the wrong way for them initially.

Chairman.—Before I call Deputy McGahon, I want to come back to this question that I raised with you there. Would the Department of Finance, Mr. Liam Drain, comment on that? Are we putting a lot of cost on central Government, particularly the Department of the Environment, by requiring democratically elected local authorities to submit schemes along the lines of the one I suggested. Is that not adding cost, leaving aside the undemocratic nature of these procedures?

Mr. Drain.—On the specific issue that you raised, I think that I have to go back to what Mr. Troy said. There is a capital budget and the capital budget is fed from various sources, and the capital receipts by the local authorities are a part of those sources. That is the reason why the thing is accounted for in that way. In relation to the functions which local authorities are performing and division between central and local Government, you will be aware, Chairman, of the Cabinet committee which has been established to look into this whole area, supported by an expert group which has been recently nominated. Presumably those those two groups will be looking at this type of problem.

Chairman.—I suggest to you, quite aside from any policy decision that is made, that, from the point of view of costs and efficiency and economy, you will consult with the Department of the Environment and let this Committee have a note on what you feel can be done to improve the situation.

Mr. Drain.—Certainly, Chairman.

Deputy McGahon.—I have just two questions. The first is to agree with Deputy Dennehy on this one. A very surprising lack of applicants. I know that many landlords were certainly deprived over the years as a result of receiving derisory sums that were fixed. and I would have thought there would have been an avalanche for this particular scheme around the country. It is staggering to see that only £60,000 was expended on it. I want to ask Mr. Troy about Subhead E—Recoupment of Expenditure in respect of the Settlement of Travelling People—£1 million provided. What exactly is that provided for, it is for halting sites?

Mr. Troy.—No, the halting sites and the group housing and normal housing are part of the local authority housing programme. There is about £3 million for such expenditure. This £1 million is mainly for social workers’ salaries and grants for caravans. If they are buying houses they get an extra grant of £1,500 in addition to the £2,000 house grant. It is a sort of miscellaneous——

Deputy McGahon.—Is there 50 per cent grant for a travelling person to buy a caravan?

Mr. Troy.—Yes.

Deputy McGahon.—Some of the caravans are just magnificent.

Mr. Troy.—There is probably an upper limit, I am not sure.

Deputy McGahon.—It is a well-intentioned effort to help some of the people who live in appalling conditions. But what about a trader who is driving a Volvo £40,000 car and pulling a huge caravan behind him? Is he not means tested?

Mr. Troy.—The trailers are a different category.

Deputy McGahon.—Some of them have more money than you or I have. I am sympathetic to them, I agree with helping the travelling people but some of them make a great deal of money. Travelling folk are coming across the Border to Dundalk in huge caravans which are getting bigger every year, and the cars are getting bigger. I do not believe that people travelling to England, North of Ireland and the south are dealing in scrap and antiques and can drive £40,000 cars should get a 50 per cent grant to buy even bigger and better caravans. It should be used for people who have a piece of sacking over their heads, who have no caravan and are living in tents. That scheme should be looked at, Mr. Troy.

Deputy Rabbitte.—Can I ask Mr. Troy about the excess under Subhead A.2—Consultancy Services. Did the entire £150,000 go to consultancy work on the toll project, or just the excess?

Mr. Troy.—No, just the excess.

Deputy Rabbitte.—What motivated that? Why did it suddenly appear not as a planned item?

Mr. Troy.—This is the ring road around Dublin and proposals had reached the stage, where we felt we better have a look and see if there was a prospect for tolling on that road.

Deputy Rabbitte.—I am curious about that. You probably know that members of Dublin County Council recently found that plinths had been erected on the same road, which is, in fact, a reserved function of the local authority members. With whose authority did your Department and your Minister erect these plinths, who is paying for them?

Mr. Troy.—It is a catch 22. When the road was being built, and the feeder roads were being built in, it could be done at a very little cost. We could have waited and said do nothing and then we could have come back later, dug them up and have to do it all again. It was a question of saving public expenditure.

Deputy Rabbitte.—I am all in favour of prudent housekeeping, but I think it was a very simple matter to——

Mr. Troy.—But only up to a point.

Deputy Rabbitte.—Bring this to the attention of the elected members of Dublin County Council. I am sure that they also would have approved prudent housekeeping although, as you well know, the question of tolling such a road is a very major question.

Mr. Troy.—It is.

Deputy Rabbitte.—There are those of us who would agree out of necessity, as happened in the case of the City Council with the tolling of the bridge across the Liffey, but tolling the Ring Road seems to be a major question of policy, and prudent housekeeping is not an adequate explanation as to why the decision of the people elected to represent the citizens of County Dublin was pre-empted.

Mr. Troy.—To put it like this, the toll booths were not erected, it was just the founda tions were laid.

Deputy Rabbitte.—You are not suggesting to make that they will be used for selling ice cream to——

Mr. Troy.—No, but if there were — and this is a horrendous thought — a decision against it, then we would have to go back and change it, but on a betting basis we thought that it was a good bet to save money.

Deputy Rabbitte.—I do not think that it is fair to pursue it with you, Mr. Troy, but the Chairman has already drawn attention to the very few powers left to elected local authority members. They may be held in low esteem in some quarters, but on something as major as tolling a ring road around the city, not even affording them the courtesy of telling them that it was suggested to do this, is a bit high handed.

Mr. Troy.—It was one of these difficult matters. There were confidential negotiations going on involving various groups and so on. It was not a straightforward situation.

Deputy Rabbitte.—On subhead D.2 — Local Authority Housing Subsidy — what is that?

Mr. Troy.—That is a small transitional item. There was a changeover with effect from 1 January 1988 where local authority housing would in future be covered by a capital non-repayable grant so there would be no loan charges and no subsidy on loan charges. That only applied to local loans fund loans on which there was a subsidy, but there were a small number of loans — five to seven year loans — outside the local loans fund and they still have to be subsidised; but this will run out over the next few years. It is a minor transition.

Deputy Rabbitte.—Are the receipts from the 1988 sales schemes a matter for the local authorities?

Mr. Troy.—It goes to the local authority housing programme.

Deputy Rabbitte.—Does it go through the books of the Department?

Mr. Troy.—No; the Department take account of it in regulating the capital budget.

Deputy Rabbitte.—It is for the local authority to divert a proportion of it to, say, the house building programme?

Mr. Troy.—That is right — 60 per cent capital and 40 per cent revenue.

Deputy Rabbitte.—On subhead D.8 — Grants to Housing Finance Agency, plc — I know I should know this, but I have some difficulty in understanding it. How does that arise?

Mr. Troy.—Do you mean the reduction?

Deputy Rabbitte.—No, the grant itself. Does the agency just handle funds that are channelled through it?

Mr. Troy.—The original intention was that the agency would raise money on a sort of inflation-proof bond, paying 4 per cent real interest, 4 per cent plus inflation. It was thought that there was a sufficient market for such bonds and that the agency would raise sufficient money from the bonds. They would then on-lend it to borrowers, again related——

Deputy Rabbitte.—That is raised on the domestic market?

Mr. Troy.—Not all, but that was the original intention. Then they would on-lend it to people who would pay back a proportion of their income. It was in an inflationary time, so each went up every year. The stock market liked index-linked bonds because of the inflation, and the borrower could look forward in a few years time to not paying so much in real terms because of inflation, and yet he would be paying more back nominally each year as his income went up. Calculations showed that payments would balance over time with conventional borrowing but when inflation stopped, all that was set aside. It proved impossible to get the index-linked bonds at reasonable prices on the market and it was proving difficult for the borrowers as well. We introduced an interest rate swap scheme in which we would pay the HFA the difference between raising money as intended and raising it now by conventional means.

Deputy Rabbitte.—Do you think that that raises a question about the raison d’être of the HFA?

Mr. Troy.—Yes, we have been talking about this. My answer has to be that I think it was a good idea at the time. It suited the time. It dealt with marginal borrowers that nobody was dealing with. At present there is not an inflationary situation and it does not suit that kind of arrangement, and also we have a much more vibrant mortgage market with more people ready to hand out mortgages.

Chairman.—I hesitate to interrupt, but we had a long discussion on this in an earlier paragraph.

Deputy Rabbitte.—I apologise.

Chairman.—Are there a couple of questions you want to pursue?

Deputy Rabbitte.—I was going to say that I have the impression that it is actually working to the detriment of borrowers. The number of homes repossessed under this scheme is quite disturbing, to put it mildly, and in some cases the people probably would be much better off in the conventional mortgage market.

Mr. Troy.—The repossessions are about 500 out of the total of 15,000 loans.

Mr. Rabbitte.—They must be all in my constituency.

Mr. Troy.—An enormous number are in West Dublin, but about one-third of all HFA loans are in County Dublin. A majority of the people involved had actually left the houses, walked away from them. The majority are still happy enough, I hope.

Mr. McGahon.—Could I just ask Mr. Troy, about subhead L — Recoupment of Expenditure on foot of certain Malicious Inquiries and a grant of nearly £29 million? What exactly are they?

Mr. Troy.—There are two categories of malicious injury here; one is the normal sort of malicious injury that used to apply before the more recent Act, and that recouped local authorities expenditure in excess of 20p in the pound: that accounts for virtually all of this, but there is a Northern Ireland type malicious injury too, which applies in Donegal and County Louth — a small sum, under £1 million, I think.

Mr. McGahon.—So, people can still claim for malicious injury in County Louth?

Mr. Troy.—If it is by an unlawful organisation and connected with disturbances in Northern Ireland.

Mr. McGahon.—Terrorist related?

Mr. Troy.—Yes, that is right.

Mr. McGahon.—Such as the stealing of a car or something like that?

Mr. Troy.—A bomb on a bridge, say.

Chairman.—Subheads A.1 to F.2 are noted; on subheads F.3 to U, page 73, are there any questions?

Mr. Dennehy.—We were lauding the local authorities a while ago, but under subhead P — Waste Disposal Facilities — the grant was £200,000 but only £10,500 was taken up. Would this have covered the recycling aspect?

Mr. Troy.—Yes, that is right.

Mr. Dennehy.—It is somewhat of an indictment on all of us who are involved with local authorities that there was a tiny gesture, made by somebody somewhere who took up £10,500 and left £189,500 behind. I felt that possibly the information was not getting out, that people were afraid of this, but has there been any improvement?

Mr. Troy.—No, local authorities are anxious enough; there is a 50 per cent grant for this kind of site for disposal of waste and it has been extended to the private sector as well. Any private group that want to treat and dispose of waste can get a 50 per cent grant. The problem is with residents living nearby.

Mr. Dennehy.—Would it cover the recycling of cans and plastics.

Mr. Troy.—It would. That is a separate division.

Mr. Dennehy.—Any information on our national incinerator or national toxic waste disposal?

Mr. Troy.—No decision yet.

Chairman.—Mr. Troy, on the subhead G — Recoupment of Expenditure in respect of Expenditure on the Register of Electors — we have a presidential election this year. There are always difficulties with the register of electors, particularly on election day. A number of people come up to candidates and say: “I went in to vote but I am not on the register”. I do not know what it is like outside Dublin, but in Dublin people who have been on the register for 20 or 30 years find they have been removed from the register. I know the compilation of the register is a very difficult task and I am not in any way implying criticism of the people who compile it, particularly in Dublin, because they have an enormous task to carry out, but are you convinced that (a) everything possible is done to ensure that every person entitled to vote votes, (b) that the system is as modern as it could be in the compilation of information and (c) would you consider the possibility of a person swearing an oath before two Garda Superintendents or District Justices where — he has resided in an area for a number of years and that he would then be allowed to vote? It seems terrible to deprive somebody of his right to vote through no fault of his own.

Mr. Troy.—The register has been under examination. We had a working party consisting of county registrars and returning officers, and I think their report was debated in the Dáil. The problem is we have to have new legislation to change the time table. There is a rather rigid time table and system of putting the register together. That item is dealt with in a Bill we have drafted, it is a Bill that gets all the Dáil electoral law together, from registration to petitions and disqualifications.

Chairman.—That Bill will be coming before the House?

Mr. Troy.—It could be this year. We have a first draft: it has to go to Departments and to the Government. It will be a rather large Bill.

Chairman.—You are addressing all of the questions raised?

Mr. Troy.—Yes. All the questions have to be addressed.

Chairman.—We will leave a more detailed examination until that legislation arrives.

Mr. McGahon.—Under subhead N — An Board Pleanála — the grant is £1,193,000. How many people are employed in An Bord Pleanála?

Mr. Troy.—About 70.

Mr. McGahon.—What is the situation in relation to appeals? Is there a significant backlog?

Mr. Troy.—Their aim is to bring about a situation where there are no appeals longer than six months. They reached 95 per cent of that target some months ago, and they have undertaken to reach the target within this year. Once that is established, the next step is to get it to four months.

Mr. McGahon.—You are talking about the average delay?

Mr. Troy.—No. Nobody should be waiting longer than six months. There should be no appeal of any kind longer than six months.

Mr. McGahon.—The reality is that some contentious appeals take longer.

Mr. Troy.—We have to tackle that because the last Act gave them power to deal with vexatious appeals, to omit certain procedures where needed, and so on.

Mr. McGahon.—Do you have very many vexatious appeals?

Mr. Troy.—It is a matter of opinion. My view might be eccentric on that.

Mr. McGahon.—How many inspectors are involved? Out of that 70, how many people are involved in the investigation of an appeal?

Mr. Troy.—We do not have a break down of the groups.

Mr. McGahon.—Despite some adverse publicity, how successful has An Bord Pleanála been?

Mr. Troy.—I think it has been broadly successful.

Deputy McGahon.—And at a relatively small price to the State?

Mr. Troy.—A small price.

Deputy McGahon.—The number of people who have recourse to An Bord Pleanála — obviously it costs them something?

Mr. Troy.—It does.

Deputy McGahon.—How much?

Mr. Troy.—If you are appealing against a commercial decision, it is £100; and if it is a third party ordinary appeal it is £50, and half that for An Taisce and groups like that.

Deputy McGahon.—A person writing in in support of a particular point of view would also have to pay to make his contribution?

Mr. Troy.—I am not sure about that.

Deputy McGahon.—That is true because I had to do it recently. It does not cost the State a lot of money.

Mr. Troy.—No.

Deputy McGahon.—Could you give me an estimate of how many appeals are upheld in an average year?

Mr. Troy.—About 3,000 of an intake in a normal year. I think about half of them are upheld, although I do not have the figures here. We could send you a copy of the annual report which give a breakdown.

Deputy McGahon.—Would most of the appeals be against local authorities, planning decisions and so on?

Mr. Troy.—Yes, when I say appeals are upheld, I must add that sometimes conditions are imposed.

Deputy McGahon.—They impose their own conditions?

Mr. Troy.—Yes.

Deputy McGahon.—Roughly half are upheld. Most of the complaints would be against the local authority. In what area would there be the highest number of appeals? Would it be a planning decision or refusals?

Mr. Troy.—In the main, it is by people who do not get what they want or object to a particular condition. There are not as many third party appeals as people think. I will get these figures for you.

Chairman.—On this subject, Mr. Troy, could you tell the Committee at what stage are the alleged planning scandal investigations?

Mr. Troy.—The Minister for Justice accepts parliamentary responsibility for that and has been answering questions on it. We have just heard, by way of general information that it is still at the DPP stage.

Chairman.—The file is with the DPP?

Mr. Troy.—Yes.

Chairman.—The investigations were initiated by your Department?

Mr. Troy.—Not by the Department.

Chairman.—By your Minister?

Mr. Troy.—A complaint was made to the Minister who told me in confidence.

Chairman.—Do you have any indication when the DPP might decide in this matter?

Mr. Troy.—They do not tell us. We know there was a report from the DPP, but we did not get a copy. That is not unusual. It is between the Garda and the DPP.

Deputy Rabbitte.—For what was the grant-in-aid to the Custom House Docks Development Authority under subhead Q?

Mr. Troy.—That grant-in-aid of £600,000 was intended for the first year or two to get it going—to cover its expenses, advertising and so on, and it will have to be repaid sometime. There are no subsequent grants. In other words, they are financed by their agreement with the developing company.

Chairman.—We can conclude the examination. We will note the Vote. Mr. Troy, I understand this is probably your last appearance before the Committee and you will be retiring in June, after 42 years in the Departments of Local Government and the Environment. As Chairman of the Committee, I have always found you to be a very helpful and forthright man. When we had the advisory group on public financial accountability which was looking at the whole future of audit in the public service, I found your assistance to be particularly frank. I was very surprised at how defensive you were at the need to retain a strong local government, with strong elected representatives — something which is dear to my own heart. I hope you will take it to heart when I say on behalf of the Committee, we appreciate greatly the service you have given down the years. I have no doubt whatsoever it was a real vocation on your part, and whatever you go on to do you will be equally as successful as you were as Secretary of one of our major Departments of State. You will be sadly missed and your performance here was always exceptionally good. Your whole attitude to the parliamentary process is exceptional, and I hope it is a tradition that will always be followed. I know the other members of the Committee would like to join with me in wishing you every happiness in, I hesitate to say retirement, but in whatever you are going to do.

Mr. Troy.—Thank you very much, Chairman.

Chairman.—That concludes the public session.

The witness withdrew.

The Committee adjourned at 12.20 p.m. until 11 a.m. on Tuesday 7 June 1990.