Financing local authority housing

 

Sir, – Observing politics from the outside, there are occasions when Government policy appears to me to be surprising and to make no sense. I then wonder am I missing something as I am no longer on the inside track.

The latest surprise was a relatively recent Irish Times report on local authorities renting for 25 years approximately 1,000 apartments from investment funds to be allocated to local authority tenants. I could not fathom why any local authority would make payments over 25 years for homes in residential blocks it would never own instead of simply borrowing the funds required and building local authority-owned apartments. I also could not fathom the economic sense in a Government facilitating any such arrangement.

So I welcome Patrick Honohan’s article in Saturday’s Irish Times (“Ireland’s foot dragging on tax reform could prove costly”, Opinion & Analysis, July 17th), in which he states that as a result of this “surprising” arrangement “local authorities will be long burdened for lease payments far in excess of the interest rates at which the capital cost of the residential blocks could have been covered”. It is good to learn that there are others beyond the world of political outrage who find surprising and cannot make economic sense of aspects of the Government’s housing policy. – Yours, etc,

ALAN SHATTER,

(Former minister for justice,

equality and defence),

Dublin 16.