Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach debate -
Wednesday, 8 May 2024

Good afternoon everybody and you are welcome to the finance committee this afternoon. I apologise for the delay in getting started. I welcome to the meeting from the Department of housing Mr. Derek Rafferty, principal officer, and Mr. John Wickham, senior adviser in building standards; from the Department of Finance Ms Louise Heenan, principal officer, and Ms Aileen Gleeson, principal officer; and from the Central Bank of Ireland, CBI, Mr. Wesley Murphy, head of consumer protection supervision. You are very welcome and I thank you for your attendance and for assisting the committee in our further discussions. This is our second meeting on this matter.

I will read a quick note on privilege before we proceed. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute by absolute privilege. Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her of it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue your remarks and it is imperative that they comply with any such direction. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members who might be attending remotely of the constitutional requirement that members must be physically present within the confines of the place in which the Parliament has chosen to sit, namely, Leinster House, in order to participate in public meetings.

I will invite opening statements from our witnesses in the order of Mr. Rafferty first, followed by Ms Gleeson and then Mr. Murphy. Mr. Rafferty may make his opening statement.

I thank the Chair. I thank the committee for today's invitation to discuss the issue of mortgageability in the context of the defective concrete blocks, DCB, scheme. I am principal officer in the Department's housing remediation unit and in that role I lead on housing remediation matters, including DCB.

I am accompanied today by my colleague, John Wickham, who is the senior adviser in building standards.

The enhanced defective concrete blocks scheme was launched in July 2023. It provides grant payments to affected homeowners whose dwellings were damaged by the use of defective concrete blocks in their construction. Four designated local authority areas currently are under the scheme, namely, Donegal, Mayo, Clare and Limerick. The Housing Agency plays a key role in the scheme by determining if an affected home meets the threshold to enter the scheme and what remediation and grant payment a homeowner is eligible for. The grant amounts cover 100% of the work required to remediate a home, up to a maximum grant of €420,000 depending on the work required. The DCB grant scheme is not a compensation or redress scheme. Rather, it is a grant scheme of last resort put in place by the Government to voluntarily assist homeowners in a difficult position with no other apparent options to remediate damage to their homes. Since the commencement of the scheme last July, there have been 2,000 applications that are at various stages of the process. Local authorities administer the scheme and have been working with the Housing Agency intensively to process applications and issue grant approvals.

The current scheme has been legislated for following extensive consultations with all relevant stakeholders. The Minister, departmental officials and the relevant local councils have worked closely with affected homeowners on the development of the enhanced scheme. At the time of the scheme launch, the Minister, Deputy O'Brien, established an implementation steering group comprised of officials from the relevant local authorities, the Department, the Housing Agency and the homeowners' liaison officer. Part of the group's remit was to produce a six-month report. This report was not a review of the fundamental terms and conditions of the scheme as set down in the 2022 Act. It was a report on how the implementation of the scheme has been progressing since it launched in 2023. The Minister recently received this report on the operation of the scheme for the first six months, from July to December 2023, and is satisfied with the progress being made. The group made a small number of recommendations based on its assessment of the first six months of the scheme's operation and these are receiving appropriate attention. To ensure the views of as broad an array of stakeholders as possible, a sub-group was established within the existing group structure to examine matters relating to the financial aspects of the scheme. Representatives from Engineers Ireland, the Society of Chartered Surveyors Ireland, Insurance Ireland, the Banking and Payments Federation Ireland, homeowner representatives from each of the four local authority areas, officials from the Department of Finance and relevant local authorities attended meetings in the Custom House and online in January and April this year.

At the most recent meeting, I confirmed that the Department is working on updated guidance that will enable homeowners to access funding for certain pieces of work at an earlier stage in the process. This would include costs associated with the competent building professional fees for completion of the remedial works plan and management of the contractor procurement where a homeowner has yet to engage a contractor. This approach was developed specifically to address the concerns raised by homeowners at the January meeting where they confirmed funding was required at an earlier stage to meet professional fees.

I am to have this updated guidance with local authorities in the coming weeks. The Department is aware that a recent focus of concern has been the technical issues surrounding the IS 465 standard dealing with testing and categorisation of damaged buildings incorporating concrete blocks containing certain deleterious materials. There has been a significant amount of discussion on the developing scientific research in this area. IS 465 is being reviewed by the National Standards Authority of Ireland, NSAI. An interagency defective concrete blocks technical matters steering group known as NSAI/TC73 has been established to support and inform the NSAI standardisation programme about technical issues. The steering group includes representatives from the Department, the NSAI, Geological Survey Ireland, GSI, the Sustainable Energy Authority of Ireland, SEAI, and the Housing Agency. The steering group has agreed on a process to specify, procure, fund and manage research projects. The GSI has established a procurement framework for the provision of laboratory analysis services to support Geological Survey Ireland's Irish construction materials project on concrete products.

A strategic oversight group has also been established by the Department of housing to monitor progress and to oversee the work of NSAI/TC73. This group will also ensure each participating organisation is supporting the NSAI to deliver on actions as expeditiously as possible and to remove any barriers to progress. Members of the strategic oversight group include the Department of Enterprise, Trade and Employment, the NSAI, the Department of the Environment, Climate and Communications, the GSI, the Housing Agency and it is led by the Department of housing. The group met in December 2023 and again in March of this year and a further meeting is scheduled for later this month. NSAI/TC63, which is the concrete block committee responsible for IS 465 and on which homeowners are represented, has received preliminary findings on pyrrhotite oxidation and is evaluating this research.

It should be noted that a wider substantial programme of research and analysis is ongoing and adequate time is required by the committee members to facilitate careful consideration of all relevant technical input. Any meaningful evidence-based revision to the standard by the NSAI is reliant on the delivery of the final outputs of key research projects. These include those from the GSI framework partners, the full evaluation by the relevant technical committee and the subsequent completion of the standardisation process in accordance with the NSAI's procedures. The GSI research partners have further tasks to complete and final outputs and conclusions from this research are expected in quarter 4 of 2024 and quarter 1 of 2025 and are critical to support the full revision of the standard. My colleague and I are happy to answer as many questions as possible.

I thank the committee for the invitation to assist it in carrying out its important work on homeowners affected by defective concrete blocks. I am a principal officer in the shareholding and financial advisory division of the Department of Finance. I am joined by my colleague, Louise Heenan, from the banking division. The Government is deeply concerned with the extremely difficult situation faced by homeowners whose houses are affected by defective concrete blocks. Overall Government action to address this serious problem is led by the Minister for Housing, Local Government and Heritage. On a general level, the Minister for Finance is of the opinion that the existing financial services consumer protection framework is strong and should be fully applied to assist households impacted by defective blocks. This regulatory framework seeks to ensure that mortgage creditors are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle. Regarding the provision of credit for a housing-related purpose, the consumer protection code requires lenders to gather appropriate information on the consumers' needs and objectives, personal circumstances and financial situation. This information is used to assess the suitability and affordability of credit for the consumer. The European Union (Consumer Mortgage Credit Agreements) Regulations 2016, which transposed the 2014 mortgage credit directive into Irish law, also place an obligation on credit providers to assess the creditworthiness of borrowers. It further provides that regulated lenders should only make credit available where the result of the creditworthiness assessment indicates that the consumer's obligations are like to be met in the manner required under the credit agreement.

The regulatory framework also contains measures on the assessment of properties for mortgage lending purposes by banks and other lenders. The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 provide that lenders are required to use reliable standards when carrying out a property valuation of a residential immovable property for credit purposes. In addition, the Central Bank mortgage lending regulations, namely, the Central Bank (Supervision and Enforcement) Act 2013 (Housing Loan Requirements) Regulations, apply certain loan-to-value and loan-to-income requirements on residential mortgage lending by regulated institutions. Lenders also have a limited flexibility at their own discretion to provide a certain level of mortgage lending in excess of these thresholds.

Within this broad regulatory framework, decisions on credit applications and the type and nature of collateral which lenders accept for residential lending purposes, is a business matter for individual regulated lenders. The Minister for Finance, Deputy Michael McGrath, nevertheless is strongly of the view that banks should positively engage with mortgaged homeowners impacted by defective concrete blocks and assist them as far as possible. As members are aware, some homeowners have identified a challenge whereby they are not in a position to fund the commencement of remediation works before receiving their first grant payment. As one option to address this issue, Banking and Payments Federation Ireland, BPFI, submitted a proposal to the Department of housing setting out a potential approach to resolve this issue. The BPFI in essence proposed that upfront funding could be provided, which would be repaid to the lender once the grant payment was issued. The BPFI advised that a State guarantee would be required to ensure that any affected homeowner could access this funding. Following an examination of the proposal, we informed our colleagues in the Department of housing of important legislative and operational issues that would arise for consideration, such as the need for an appropriate statutory basis. To effect this guarantee, it would be necessary for legislation to be brought forward by the Minister for housing.

Second, on the treatment of such a guarantee for balance sheet purposes, the preliminary view was that this would fall within the definition of a standardised guarantee and would be recorded as Government expenditure upfront. Third, legal advice may be needed to determine if the proposed scheme might constitute state aid. Through our engagement with the BPFI, we also understand that to operate this scheme, it would be necessary to develop new and bespoke IT systems in collaboration with local authorities. This information assisted our colleagues in the Department of housing with their assessment of the options available to them to address the funding issues raised by homeowners.

The Government will continue to work to ensure that the scheme operates effectively and consistently for homeowners who access it and the Department of Finance will continue to work with the Department of housing on this. We look forward to engaging with the committee on this matter and are open to any questions. I thank the committee.

Good afternoon Chair and members of the committee. I thank the committee for the invitation and the opportunity to outline the remit of the Central Bank of Ireland in respect of the issue of defective blocks, including our ongoing engagement with the financial sector and representatives for affected homeowners on this matter. We know from our engagement with affected homeowners that this is a hugely difficult and stressful experience for them. Through our work, we have been focused on ensuring that the financial services sector plays its part in supporting them, in line with our expectations and their obligations to their customers. As for the role of the Central Bank, as the committee is aware, the administration of the Government’s enhanced grant scheme and matters related to the operation of the scheme are matters for the Department of Housing, Local Government and Heritage. The Central Bank does not have a role in the scheme’s design or operation. However, the Central Bank has taken steps to ensure the firms we regulate and their industry bodies engage with the Department to ensure the scheme can operate properly to achieve its aim.

As we have discussed with the committee previously, the Central Bank continues to support a co-ordinated approach involving all relevant bodies and industry sectors. Given the range of stakeholders involved, for the remediation scheme to work and be effective in supporting the homeowners, proper co-ordination is required. We believe that only through effective engagement and a co-ordinated approach under the auspices of the scheme introduced by the Department of housing can the various aspects related to this issue be addressed.

In relation to our ongoing engagement, since the introduction of the scheme the Central Bank has been active to ensure that in their dealings with affected consumers, regulated firms continue to meet regulatory requirements and supervisory expectations. This includes our expectation, which applies in all contexts, that firms regulated by the Central Bank support their customers when faced with challenging circumstances, which includes the hugely challenging situation facing homeowners with defective concrete blocks. We continue to engage with Banking and Payments Federation Ireland and Insurance Ireland to ensure the financial services sector plays its proper role in supporting the resolution of the situation for affected homeowners on issues as they relate to the financial sector and to support the implementation of the Government scheme to that end.

To inform our work, the Central Bank has also met on a number of occasions, and had ongoing correspondence with, a representative group for affected homeowners. This has been beneficial to our work as we have used the information that homeowners have highlighted to us to engage directly with individual firms on specific issues in addition to our engagement with the industry representative bodies. We are aware that the BPFI and Insurance Ireland, on behalf of their members, are also engaged directly with homeowner representative groups and a number of measures have been put in place to support affected customers since the introduction of the scheme. We also note the clarifications provided to the Department by the representative bodies on how the scheme should work to ensure renovated properties can meet the standard criteria for mortgage and home insurance applications.

The Central Bank will continue to play its part in working closely with all stakeholders to support affected homeowners and will continue its engagement with the financial services industry and its representative groups to advance this work. I thank committee members for their time and am happy to take members’ questions.

I thank our guests for coming before the committee today. I really appreciate the opening statements and we will get straight into it. Obviously, the committee is holding these hearings on our request to try to assist the homeowners in terms of the plight they are going through. Some of what they have heard in the opening statements will annoy them. I refer in particular to the points from Mr. Rafferty regarding 100% redress and that the scheme seems to be working or that the Minister, Deputy O'Brien, is satisfied with the progress being made. I acknowledge they are not his words but those of the Minister and that he is an official in the Department but I can tell him the 1,300 people who turned up in Inishowen were not satisfied with the progress.

I am reading through countless emails here to go back over them again. There are different examples of how the scheme does not work for people and how it is not 100% redress. Because if it was 100% redress, they would not be complaining. There are surely red tape and bureaucracy issues in this regard but the biggest issue is that many homeowners do not have the money to demolish and rebuild their homes.

What prompted this was that seven months ago, the BPFI made a proposal to the Department of housing that offered a zero interest loan to homeowners regardless of whether they had a current account or mortgage with the bank. This was on the basis that the State would guarantee the loan. It would be returned to the bank during the first drawdown of the payment to help get them off the ground. This issue speaks to the frustration of homeowners in my county and across the State. I have put in a freedom of information request and I have seen the correspondence from the BPFI where they are telling the Department about the mental health issues, the anxiety of people affected and that a decision was needed.

Last week, we had the BPFI sitting where the witnesses are sitting today, and its representatives said seven months on, they still do not know if this scheme is a runner or not. They have received no formal response from the Department and I think that is terrible. It has been seven months. I have raised this numerous time in the Dáil. I have raised it through parliamentary questions. I made the point that this is not the be-all and end-all. This will only assist a number of families. For many, it still does not deal with the core issue but one way or another, there should have been a decision on this.

When the BPFI brought me in and told me what it was planning, I told it that to tell the truth, it did not really make much sense as the Department should provide the grant upfront. When the Department of Finance was asked for its views in this regard, one of its responses was that the Department of housing should provide the grant upfront as opposed to going through the legislative process of having to guarantee the BPFI. That was months ago. The Department of Finance gave that response last year. Can I ask the Department today whether this proposal is off the table? When does it intend to tell the BPFI that it is either off the table or not?

I thank the Deputy. We have had extensive regular discussions with the BPFI since it first put forward its proposal in July last year. On looking back on some of the records, I note we have met them at least every month if not every few weeks during that time, right up until very recently. The proposal itself was effectively for a sovereign-backed loan. We initially had to consult with our colleagues in the Department of Finance on that. That took time and in their initial statements, my colleagues outlined some of the issues that came up as a result.

We further engaged again with BPFI on this and upon digging into the detail of its proposal, it was not quite as straightforward as the bank simply providing the loan upfront. The BPFI wanted the local authorities to administer the scheme and it wanted a bespoke IT system set up. There was a lot of detail and it wanted a lot of contractual stuff that it felt needed to be done to be done in the background. That is what was raised with it during the long period of discussion.

When we did set up our implementation group in January, it became clear at the first meeting of the group that homeowners were telling us, specifically at that January meeting, that what they needed this money for was professional fees first and foremost, not for paying contractors. That is what they told us in January. We went away and, looking at the complexities and challenges with the BPFI proposal, asked ourselves whether there was some other way we could do it. Even at that point, the BPFI was of the opinion that it would be preferable, as the Deputy said, to go down the legislative route. We felt the legislative route for primary legislation was always going to be difficult, purely because of timing and getting space on the Government agenda.

We looked for an administrative way within the current framework of legislation and regulations to ensure earlier funding could get to homeowners to meet the specific need they said they had, which was to meet professional fees. We have a proposal on that. Maybe two weeks ago, we mentioned the broad principles of where we would go with that. That is something we will be able to implement very quickly, whereas the proposal from the BPFI, apart from the challenges of local authority involvement, IT systems and so on, would require, as my colleague said, primary legislation. That would be time-consuming and involves a number of other issues, I understand, that would need to be bottomed out. We felt this was a more responsive and quicker way. In general, it was reasonably well received at our meeting in April, up to a point. There was a request for additional money but, on the point of professional fees and other expenses, we feel we will be able to do that. All we need to do is issue revised guidance to the local authority sector to facilitate this. That will allow homeowners to get the money they need for professional fees to get their jobs started. That would negate the need for the BPFI proposal.

Mr. Rafferty is talking about speedy implementation and all the rest. Why does he think the BPFI brought the proposal to the Department in July? Does he think it dreamed it up one day sitting across the road? Is it not the case homeowners were telling them they had problems with upfront costs? They were also telling the Department. In July of last year, the BPFI had developed a proposal and brought it to the Department. Before that, it knew there was an issue. The witnesses told us they became aware of the issue with professional fees in January and they talked about speedy implementation. We are in the month of May. The reason the BPFI was trying to do a convoluted system was the Department was not willing to move. We are ten months on and still do not have clarity as to when this earlier payment, which will not cost the State a penny, will be enacted and what it will look like. Will there be limits to it? I will talk about that later. When I go out of here and talk to people on the ground, they say this is crazy stuff. These people are in a living nightmare and going through all this anxiety. They see this as officials and Ministers not giving a damn about them. The fact it has taken so long to get to this point on a tiny part of the scheme that is only an administrative issue is a problem. Mr. Rafferty is telling me there is a solution the Department can do, it is administrative and can be done very quickly. Why was it not done last July?

It is unfair to say we only became aware of it in January. The Deputy is right and I know exactly why the BPFI brought forward the proposal. They had extensive bilateral discussions, which are still ongoing, with homeowners and the banking redress subgroup of homeowners. I speak quite a bit to homeowners so have a degree of appreciation of the pressure they are under. I will not pretend to know exactly what it is like but I have visited homes. I have visited the area and all the county and speak regularly to homeowners so I know about the pressure. In January, at the meeting we had with this specifically set-up group to look at this issue, they told us it was about professional fees. It was at that point that we-----

Let us be clear: they disputed that at the April meeting and when Mr. Rafferty said this was well received, those are not the full facts. The homeowners' representatives are quite annoyed at this process. Is that not a fact? They are disputing what Mr. Rafferty is saying on the record of this committee, which is that they said it was only for professional fees. It is important because homeowners are not represented here and it needs to be put on the record. They are disputing what Mr. Rafferty is saying and it was not as well received as he is suggesting by the homeowners. Is that correct?

No, I do not believe so. I could be wrong. This minutes were released a number of weeks before the 26 April meeting. They were available there. Extensive suggestions came back from the homeowner groups on the minutes, but not on the section where that understanding was stated. Those did not come back. At the meeting, the Deputy is correct they stated they felt there was a misinterpretation on our part. I made the point the minutes had been available for weeks and they had come back with other comments but not on this. The Deputy is right there is - I would call it is a disagreement - on them. We are at the point where they disagree. They are now saying they did not say that, notwithstanding the record of the meeting and that in the subsequent chance they had to amend it, they did not amend it. We are now at that point where we are-----

Sorry, just in terms of it being well received, I can clarify that. I am not saying our proposal and view overall was well received but the proposal we put forward for professional fees and allowing some earlier payments was reasonably well received. It is just that more was required based on their feeling we had a misinterpretation. Just to clarify that, I am not claiming the view was well received.

In the normal run of events, we would produce the minutes as quickly as we could and issue them as draft. There was no mention at the meeting in January of when the minutes would be available. I cannot recall. They may have asked for them to be done relatively quickly, but we always do our best to do them relatively quickly. We took on board the comments made and the draft minutes for the 26 April meeting have been released. We took on board the comments they made because they were fair comment at that time but there were issues in terms of resources in the Department and clarifying a few things, so we do not get around to them.

These are minutes of a meeting. It is not going to take half a day to type them up. It is better to type them up after the event than two months later, which happened in these circumstances. Then you are into a situation where you are disputing the recollection of people who attended the meeting - laypeople, people who are volunteering and people trying to give an input how people feel about this. They dispute Mr. Rafferty's assertion, for the record.

He suggested that they said this was only for professional fees. Regardless of the dispute at the minute, however, is it not the case that the homeowners are now very clear, as is Mr. Rafferty, in saying that making earlier payments available only to professional fees is not the solution?

What is the proposal then? The Minister has heard this. I have raised it with him numerous times. If he were to turn around to Mr. Rafferty and say, "Mr. Rafferty, please develop a scheme that would help with upfront payments", Mr. Rafferty would respond. He is here as the face of the Department, so I am not personally making the claims against him, but I have to represent my constituents and have to be able to face them when I go back to Donegal and meet them elsewhere.

There is huge delay. We still do not know what this looks like. The homeowners are telling the Department that professional fees alone are not going to cut it and that what we need is working capital. They have told the Department that. I think they have given the Department live examples of timber-frame houses being built. I will give Mr. Rafferty an example I have here. If somebody is rebuilding under this scheme and has been quoted for the works, the timber frame producer requires €70,000 upfront. How does he or she deal with that? If you are buying a timber-frame house, you have to pay a certain amount upfront. They are not professional fees. How does he or she deal with that under the scheme the Department has developed?

The scheme does not facilitate what have been termed upfront payments. That is not within the way the scheme has been designed, as per the framework given to us by the Act and the regulations passed by the Oireachtas. It does not allow that. It is relatively common, I believe, under any Government scheme that money is not given until it has been incurred and the job has been certified as done. That is common enough.

The proposal relates to professional fees and some other potential expenses that would relate potentially to clearing a house ready for construction work and so on. Fundamentally, it is a matter of that broad sense, just those particular expenses, the biggest part of which would be professional fees. They would be fees if, for example, the ESB infrastructure needed to be relocated and smaller fees, but the fundamental part of it would be for professional fees, yes.

Many of the people rebuilding their homes are dealing with small contractors. We are not dealing with Sisk or large contractors in this case. One of the challenges those people have is working capital. How do these families get off the ground in those circumstances if they cannot go to a financial institution and borrow money to assist?

I go back to the meeting in January. It was not just the Department's view, by the way; our understanding was shared by other people in the group, including the homeowner liaison officer. There was quite an extensive discussion and agreement from everybody, including the homeowners, that no payments should be made up front to contractors or builders. That is not the way it should be done. That should not be done. That was accepted. That was the discussion at the January meeting. I do not know whether that is different from the reality on the ground. I am just relaying the discussion at that meeting. It links back to what I am saying, that the issue was about the professional fees, not the work contract.

Moving on to Mr. Rafferty's comment that the scheme is working well and the Minister "is satisfied with the progress being made", what happens to the 64-year-old woman in my county who has defective blocks? She has been accepted onto the scheme. To rebuild her home will personally cost her in the region of €80,000 more than what would be available under the scheme. She is 64 years of age. She is not going to get finance from any financial institution and she will be relying shortly on her State pension as an income. How does that person access this scheme?

I have had people say that to me. I do not have any data, nor does the Housing Agency or the local authorities, on what actually has been the outcome, so we do not have any firm data as to what gap, if any, there is between what is available under the grants and what it actually costs. No more than the Deputy, I have heard homeowners say to me that it is likely to cost them more, but I do not have any data to back that up.

The reason I say this - it may be a small thing - is that when somebody comes before a committee and says there is 100% funding, that really annoys many people because the likes of that woman are sitting at home knowing they will not be able to rebuild their homes. It is €80,000. She is not going to get that money. There is no finance available from banks.

It really annoys people.

Let me move on to another issue. In his opening statement, Mr. Rafferty mentioned the assessment being carried out by the NSAI on the standard, which is the core of all this. He said GSI research partners are expected to complete their task in quarter 4 of this year or quarter 1 of next year. Could he clarify whether that is just the GSI part?

No problem. With regard to part of the substantive research under way to investigate some of the learnings from the concrete block issue, GSI has a framework in place with several research partners. One of those most familiar to the homeowner group is the university-led consortium, which includes international experts. Separately, an individual consultant is carrying out parallel testing. Over the course of 2024, several very important reports will be released to inform the evidence basis for making technical advancements regarding the standard. Most of the final reports will be available towards the end of this year and one of the research partners is to deliver its final report in quarter 1 of 2025. However, that is a small but very important part of all the research that is happening. A number of projects are working in parallel that will have deliverables over the coming weeks and months. Taken in the round, within the standardisation process, all parts of the evidence, as it presents itself, will have to be considered to make decisions to move on the review of the standard.

No, this is an evidence-based approach to learn from what has emerged over recent months and years, looking back at the experience of international experts, particularly with respect to pyrrhotite oxidation. It is a matter of appreciating the application of the current edition of IS 465, how it has been applied in practice and making modifications to the sampling and testing protocol. Once the various independent reports are peer-reviewed and published, the technical committee will be enabled to review them to achieve a consensus to advance IS 465, which is fundamental to the scheme and homeowners.

Not necessarily. With regard to learnings as they become available, the international experts are meeting next week at an international conference in Canada that comprises a forum to share and exchange information on what the partners have found to date and to develop coherence regarding the evidence basis. It is important that the published reports be accepted within the geoscience community as factual and that they be subjected to peer review. GSI, which is managing the research projects, is facilitating the network to meet frequently on the matter.

It is important that people have a body of evidence sufficient to make decisions. Once material becomes available – this may happen in the next quarter, or at least we will have a substantive amount of information in quarter 4 of this year, possibly earlier – it is shared with the technical committees. The technical committee will review what it is presented with and identify any gap or analysis that might need to be conducted. We are optimistic that some text will emerge later this year with respect to the revision of IS 465, based on the level of information available at that time.

There is a consideration of an amendment to IS 465 to deal with the specific high-profile issues and ones where there is evidence to support a change. This would entail considering such matters as the testing and sampling protocol, the nationalisation of the standard to apply to other counties and whatever material emerges concerning foundations and the pyrrhotite oxidation and sulphate attack concerns we are aware of.

As the Deputy probably knows, the Act itself mandates the Minister to review the operation of the Act in certain circumstances, one of which is a review or revision of IS 465. That has to be carried out within three months of the review of IS 465. The review of the operation of the Act, which would encompass those kinds of changes, would need to be carried out within three months of the receipt of the review of IS 465 by the Department. That is the maximum.

Yes, so other than the full revision. I want to ask about the triggering of the legislative mechanism. According to what we have heard, the full review will not be done until later in 2025. Does the legislation say it is on the back of a full review or is it on the basis of partial information but allows them to make a determination on issues such as foundations and pyrrhotite?

My view of the legislation is that it is on the back of the full review. However, as Mr. Wickham has said, if the amendment was significant enough then obviously the Department Minister would take it into account, at that particular point. As I say, it is a full review. The Minister is able to review the Act himself at any particular point if he feels it is necessary to do so, if there was enough evidence to justify that. The call would be made at that particular point depending on the substantive nature, or otherwise, of the amendment. Specifically, no, it would be the full review that would trigger that particular section.

On the Central Bank and how financial institutions carry the value of these homes on their balance sheets, and, indeed, the Department of Finance because it references the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, which provide that lenders are required to carry the appropriate valuations and methodology to carry out those evaluations for immovable property and credit purposes. Is the Central Bank overseeing that? Is that happening regularly within the financial institutions? Is the Central Bank confident that the proper up-to-date property valuations have been assigned by the bank for properties that have defective block? What happens when a homeowner is making full loan repayments but the value of the property, the collateral that underpins those loans has collapsed? Unfortunately, I have been at too many of these but imagine a house that is deteriorating, has been empty for a couple of years because it is not suitable any more yet the family still makes full repayments even though the value of the property is the value of the land on which it sits and, indeed, the value is probably is less due to the cost of demolishing the house.

To clarify, has the Central Bank ensured that the financial institutions have revalued the properties?

We have engaged with the banks on the matter. They have assured us that they are looking at this in line with what is required of them. They will comply with the regulatory requirements in terms of collateral valuation, and reviewing their loans in terms of expected credit loss provisions, ECL provisions.

It depends on how much has been provided for in the first instance. I am not sure whether figures have been given by the Banking & Payments Federation Ireland, BPFI. In terms of the notifications to the banks, there is a relatively low number of notifications to the banks of borrowers who have identified mica or defective blocks and notified the borrowers of this issue. Of the 600,000 mortgages that are on the banks' books, just over 300 borrowers have notified the banks that they have got this issue.

Yes, and some of these properties may not have mortgages. Given the years during which we know this issue has materialised - and it is not an issue that goes back 40 or 50 years - which is the lifetime of a standard mortgage, is the Central Bank really satisfied that the entire banking system in this State is only, potentially, revaluing up to 300 homes when we know thousands of homes across this State have been affected? Is it a case of "they have not told me so I am not going to see"? Surely, the Central Bank would have an opinion on this matter.

Some banks have already done it. One bank, which I will not name, carried out an internal assessment. It looked at the mortgage penetration in certain geographic areas and has made calculations on that basis in terms of what type of exposure it has so there are methodologies for estimates. If one is waiting for the customer to tell the bank that his or her house has an issue in terms of defective block, and many of them will not because what is the point as the banks are not offering anything to them. The banks charge the same commercial interest and do not provide additional working capital at low-interest costs, etc. Estimates are being carried by at least one financial institution that I know of, which used that methodology. It is fair enough to be able to use that. There are estimates on the number of homes that are affected, in different regions. Then, based on the penetration of mortgages sold in that period and region, one can draw conclusions on the potential exposure for financial institutions. Would the Central Bank not want financial institutions to look at those matters?

In advance of budget time, but it would usually begin some months in advance of that in terms of discussions about what is needed. I think the budget will be in early October this year. I would envisage it would start in June or July. That is the early stages of it. That is the entire budget allocation for the Department, of which this is one part.

Would Mr. Rafferty be able to prepare a note for the committee on the information he has to hand in respect of the breakdown of the €2.2 billion, if that is what it is? Just the information that he has available. That would be really useful for the committee.

I want to go to Mr. Rafferty’s statement and the untruth to the effect that the grant covers 100% of the work required to remediate a home up to a maximum grant of €420,000. It is absolutely the case that the maximum grant is €420,000. There are many issues around that which he will have been made aware of, but it is not 100%. I will give one example that was given to me several months ago and I am sure Mr. Rafferty will have similar for the report that the Department did.

This person said the cost of their demolition and rebuilt was €296,000. On the new scheme it is €2,045 per square metre. Their house is 94.54 sq. m and €2,045 by 94.5 sq. m is €193,394.30. That is an absolutely factual example. I have many more like it from Mayo. That identifies the gap of around €100,000. This is for a woman, a single mother, in her 50s. Mr. Rafferty is saying it is 100%. I do not believe we would be here discussing this if the grant amount covered 100%. We would obviously have the science to discuss and we will come to that.

Mr. Rafferty indicated that the Department does not have the data and that the evidence is not there even though I know this is what the homeowner representatives on the different committees will be telling him. What data does he need in order for it to be concrete in his mind that he would never again write a statement that said the grant amounts to cover 100% of the work required so that I can tell the homeowners in Mayo what they need to supply him with?

I should clarify that it does cover 100% of the eligible work to remediate the home but it is based on grant rates that are the grant rates given to us by an expert group on the basis of SCSI rates for rebuild. It is on that basis that the calculation is made which, at the moment, is done by the Housing Agency. So 100% of the work is covered, that is 100% of the work of the rebuild, but the rate at which it is payable is a different thing. And that may end up being a different amount.

That is completely splitting hairs. The grant does not cover 100% of the work. That is a fact. If it did, I would not be here giving the case of a woman in her 50s parenting on her own in Westport. I could give Mr. Rafferty details of many more cases. Should homeowners in Mayo highlight for Mr. Rafferty a number of cases that will tell him that the grant does not cover 100% of the work?

Mr. Rafferty stated that the defective concrete blocks scheme is not a compensation or redress scheme, but, rather, that it is a grant scheme of last resort put in place by the Government to voluntarily assist homeowners. That is deeply insulting to homeowners. They are not charitable cases. They are people who were absolutely let down by the lack of regulation. They were also let down by the Government, which failed in its duty to protect citizens in the first instance and to protect their homes. To suggest that the Department is there to voluntarily assist people with this grant is despicable. However, we will discuss that with the Minister at another time.

The Department compiled the six-month report in respect of the scheme. Is it six months since it that report was completed?

To clarify, the Department did not compile it. It was the implementation steering group which is made up of the Department, local authorities, the homeowner liaison officer and the Housing Agency. It covered the period up to the end of 2023 from July. The draft was completed in February-March and submitted to the Minister shortly thereafter.

That was not the remit. It is not what the Minister asked us to do. The terms of reference for the group were to produce a report based on how well the scheme was delivering within the current legislative framework, guidelines and regulations that were there. So it was how well it was delivering on that basis. It was not to look at issues such as those mentioned by the Deputy, like cost and affordability. That was outside the scope of it. That kind of review is legislated for in the Act under section 51 where the Minister can make reviews of rates and of the cap as well.

I am just trying to get to how the Minister could be satisfied with the progress that was being made when so many people are locked out of the scheme because they cannot even afford to access it. I am trying to match that up in terms of the report and the Minister being satisfied. The report led him to believe that he was satisfied.

I should clarify something. It is my error. What I really meant there was that the implementation steering group was satisfied that the scheme was operating satisfactorily within the framework relating to the scheme. There were some recommendations that were made, with relatively minor changes to some of the guidelines and so on and more substantive ones in terms of process, best practice sharing and that kind of thing, with the local authorities working together. I should have said that it is not the Minister who received the report but the report concluded that the group was satisfied that the scheme was working satisfactorily within the legislative framework that is in place.

Representatives from Engineers Ireland were before the committee last week. We have spoken at previous meetings about foundations not being tested and so on. Riddle me this: how can Mr. Rafferty say a scheme is operating satisfactorily – and the Minister, the report, the steering group all agree that it is operating satisfactorily – when we have a situation where there is real doubt over the foundations not being tested and people continuing to build when so much scientific evidence has been gathered?

The engineers are not comfortable and refuse to sign off on homes where the foundations have not been tested.

I will ask Mr. Wickham to specifically address the engineers and the research. On the timing of that report, a lot of the work was done in the period between November 2023 and January 2024. My understanding is the research did not come to light until after that. Certainly I was not aware of it until after that timeframe, nor were any members of the group. The report was a snapshot in time of how it was operating under the legislative framework that was there. That did not, and does not, include things like foundations. Mr. Wickham might comment on the technical aspect of that.

The commitment to pursue some of the unknowns has been there for a number of years now. With respect to research that becomes available, some evidence was presented towards the latter end of 2023. It was shared with the committee, but it is part of a more substantive area of investigation the findings of which will be presented and delivered in the coming weeks and months. In its isolation it is not complete and we are, as I said in reply to Deputy Doherty, awaiting some final reports that will come later this year.

I understand that and we have gone over that.

I want to move on a bit. Something else does not add up either. Why has the Department removed the science and testing by the chartered engineers registered under the IS 465 standard report and the recommendations of option 1 from the new scheme? Why was the homeowner's engineer with building condition assessment replaced? Why replace the scientific results with the damage threshold? I would have thought the Department would err on the side of caution at least, but it seems the homeowners' engineers have been taken out of that. Will the officials explain the reasoning behind that?

In the discussions and consultations on revising the scheme, one of the issues that came up was this was a financial burden, as well as everything else, on homeowners. It was felt it was better to manage that centrally and the Housing Agency was brought in to do that as part of its role. What would happen then of course is we would have had a number, probably a few hundred, who would already have had these reports done by their own engineer. My understanding is that especially in Donegal there were hundreds of these the council had not made a decision on. As part of the transitional arrangements to the new scheme, the Housing Agency made that decision. The agency had then engaged at that point its own engineers and reviewed those engineering reports from the homeowners' engineers and made a call on that at that point. That is a technical issue I cannot comment on. The professional engineers may have a difference of opinion and on occasion it appears as if they did. The Housing Agency engineer made that call. I do not have any more specifics than that, but that is what happened, effectively.

I know, but Mr. Rafferty is talking about expediency and making it efficient. We are building all these houses and we do not have the homeowners' engineer and we have taken the science out of it. We are not going to get a review of this until 2025 and by the time the changes are made, we could be at the end of that year or into 2026. What happens if all the homes that are being rebuilt right now, especially the ones where people could not afford to have the foundations tested, are found to have deleterious material in their foundations? Are we spending millions of euro on an asset that is not going to be worth anything and will have to be knocked down again or maybe is just not insurable or mortgageable? We had a whole discussion on the latter aspect last week.

We operate the scheme within the science as it is now. The science always evolves and will evolve but it is not to say it is clearly going to go one way or another. My only thought on that would be the alternative, potentially, is not to operate the scheme at all until we get a revised set. Even then, what happens if we get a new set? There will be a further potential-----

-----evolution. The priority of the scheme is to remediate and get them fixed. On options 2 to 5, as the Deputy knows, a letter of assurance is issued with a 40-year guarantee should the non-affected blocks become affected, so there is a change to revisit that. On the overall issue about option 1 and so on, we are dealing with the science as it is now and that is the only way we can operate a scheme.

The IS 465 is obviously not fit for purpose. Putting the affordability of the scheme to one side, I have deep concerns about what is happening with respect to the science of it. Many of the homeowners have had to pursue the science around it. I have a question that has been asked by a homeowner. The damage threshold, the scientific evidence that was required in the 90:10 scheme, does not require any samples from defective homes to be sent for specific analysis. Why is the Department reviewing IS 465 when reactive iron sulfide materials were conclusively proven to be the scientific cause of the crumbling blocks?

There is what I said earlier on about the commitment to look at the evidence basis to advance the technical standard. That is well under way. A part of that research has been delivered, but it is not the complete picture. Until we have all parts of the evidence to take it in the round and give it consideration by the technical committee it would be premature and unfair to make a determination.

There are so many issues to discussed on this. With the damage threshold, it is now a case of just a visual sighting of it and people are being refused on the basis of the cracks in the wall not being wide enough. Why is the Department prolonging the suffering of homeowners who want to get on with rebuilding their lives?

If they know what they have in their blocks and have the testing done, why is it just being done on a visual basis? We have the agency, but the Department is making homeowners wait in a state where they know there will not be an overnight fix or any outcome apart from having their home be rebuilt.

The damage threshold is a feature of the scheme. On the basis that damage has presented itself, those who meet the damage threshold can avail of access to the scheme. Mr. Rafferty might want to speak on the homeowners who have properties with that degree of damage. It would certainly be at a threshold level that requires intervention.

I would like to refer to the report of 2017. Mr. Wickham is saying that the expert panel did not commission or carry out any tests on the buildings or building materials and was dependent on the technical information supplied directly by the homeowners and concerned parties, and the panel had no responsibility for the accuracy of technical reports. It seems like nobody is taking responsibility here. There are various reports, groups and committees.

Its task was of a technical nature, with a sufficient number of people with competency to review the nature and scale of the problem at that point in time. The Deputy is correct that its terms of reference did not extend to conducting testing itself. The body of evidence available to it at that time and what could be delivered within the scope of its terms of reference was largely made available by homeowners. Part of the recommendations that followed within the report was the recommendation to conduct further research. With regard to the expert panel report, the Department has by and large implemented the majority of those recommendations and is continuing to pursue the research.

The Government decision in 2021 mandated the NSAI to review the associated standards. We are working closely with NSAI to identify and support it in all the gaps that are needed to help it with its programme of standards. The forum of the steering group, NSAI/TC 73, which I chair, is a vehicle to be able to listen to those technical committees and try to procure the research and support it by funding or elsewhere. As the technical committee defined unmet needs, there has not been any situation where we have not pursued it to get it delivered. There are multiple delivery mechanisms for that research, not just the GSI framework.

I need to go back because I want to let my colleague in and I have to go into Taoiseach's questions. I want to go back to the front-loading of the grant applications. The homeowners in Mayo were asking for a 20% grant allocation to rebuild their homes, which must be available up front. Some 50% of the accommodation rental costs and full storage costs were to be paid up front to the homeowners. In spite of Mr. Wickham's suggestion that they were happy with their professional fees being considered, the ask of the homeowners in Mayo was for 20% up front to enable people to access this scheme who were not in a position to access the finance or did not have the finance themselves. We cannot have a situation where people cannot afford to get onto a €2.2 billion scheme.

I can only repeat what happened in our January meeting of that group, which Mayo homeowners were at, as were homeowners from all four designated counties. At that meeting, it was said that the money needed was essentially for professional fees and there was a general agreement in the group that it is not a good idea to pay contractors or builders up front. That was generally agreed. I know what happened subsequently. I accept there is now a view that this was misinterpreted. I have had discussions with homeowner groups about this point. That is what was stated at the time. On that basis, we worked on arriving at what we believe is something that can deliver additional funding early. As I said earlier, the way the legislation is drafted at the moment would not allow up-front payments to happen. Money cannot be paid until the actual expenditure has been incurred and the work has been done.

I speak regularly with homeowner representatives, including in Mayo. We have visited homes in Mayo. We in the Department have quite a bit of interaction with homeowner representatives. I am aware of the concerns around the costs of the scheme. No one has specifically told me about a deficit or issue they have. The only thing I became aware of was in that broader group. Subsequently, there was a view that that is not the case, but we are at this moment going to work with homeowners to put forward that proposal.

Obviously, it is not getting through in the communication because we have a whole list of things that need to be done to put the scheme right. I do not see any changes being made to address the issues that have been raised by the homeowners in Mayo. I know similar issues have been raised in Donegal.

I thank the witnesses for their submissions and their time here today. I would not be so familiar with mica and the issues that people are suffering in Donegal, Mayo and Clare because it is not really prevalent or even existent in my own county, as far as I know, but when there is a hugely expensive scheme such as this, at over €2.2 billion to assist people, I have no doubt there will be examples of where it is working and examples of where it is not working. I think that is in the nature of this kind of scheme, which is dealing with so many bespoke situations.

We are not given the size of a standard house on a standard site. Obviously, there are going to be difficulties with the scheme, which is relatively new. The legislation was only introduced a year and a half ago.

I want to ask a couple of questions that have arisen from the experiences of others who are from those counties. We have dealt with this quite a bit in the housing committee as well. I am the Chair of that committee. It is slightly unusual for me to be in the Chair at the finance committee dealing with housing committee officials.

Mr. Rafferty referred to the preliminary findings on pyrrhotite. There has been research and some findings have been made. Given that people are waiting to hear about the findings , does Mr. Rafferty think that could instil a reluctance to enter into the scheme and that people are holding back until they find out the results in respect of foundations, etc.? That is the discussion we have had at the housing committee. When does Mr. Rafferty think it would be likely that we would have some published guidance on that or when will the findings of the research be available?

Yes. I might have said earlier that we are quite optimistic on the basis of the evidence that is already available, and what will be presented in the coming weeks, that the NSAI will be in a position to publish an amendment to IS 465 later this year. It is very much dependent on some of the final reports that come back, the analysis by the technical committee, and whether there are further questions that will need to be asked before a consensus can be reached on the decision-making processes.

My point related to the possible effect in cases where somebody is waiting for the findings. All good research should lead to more research as well. We do not know what the conclusion will be and we may well have to look at something else. I suppose that is the nature of the work that is being done. The witnesses think the timeframe for the findings is that they will be available by the end of the year.

That is very good.

Ms Gleeson referred to legislation from the Department of Housing, Local Government and Heritage being required. Is that an amendment to existing legislation or is it new legislation? Does she know what stage any legislation might be at?

If the Department of Housing, Local Government and Heritage were to decide to pursue the BPFI proposal, it would require a 100% State guarantee, as requested by the BPFI. All State guarantees must be put on a statutory footing. It would arise only where the Minister or the Department of Housing, Local Government and Heritage decided to pursue that solution. In that case, it would be a matter for them to identify the legislation. It would be a new statutory provision. The particular legislative vehicle would be a decision for the Department of Housing, Local Government and Heritage. It could use whatever one it determines to be most appropriate. It is not something that is in train at the moment because it is dependent on the proposal being pursued.

Yes. I cannot give a detailed answer on it because it was a requirement that was put to us by the BPFI. It felt that in order to administer the back-end of the scheme that it would need to have an IT system that could connect it to local authorities. I do not have any further detail than that. It was something that was not going to be done very quickly, but it was added to the timeframe.

It is to allow the BPFI to work with the local authorities, because it wants them to take a leading role in administering the loan product. Originally, we thought that it was offering to administer the product itself, but it felt that was not achievable and its preferred option was that it would partner with the local authorities, which would then require some sort of system whereby they could speak to each other. I do not have any more detail than that but I can come back to the Acting Chair.

I know from previous discussions we have had in the housing committee that there are often sections in local authorities that do not speak clearly to each other. I refer to commencement, planning and building control. If we were going to design an IT system, I hope it would not just be designed for that scheme but that it could provide many benefits across local authorities.

The preliminary view was that it would require further analysis. When we think of state aid, there are a few elements to it and one is distorting competition in the market. At a preliminary glance, the legal adviser was not satisfied that it would not constitute state aid, so it would need further exploration. This is something we spoke to the BPFI about. It was considering the matter from its perspective in terms of market share among the participants in the scheme, for example, the different banks, in circumstances where the homeowner did not have a mortgage with one of the lenders. The scheme had 0% interest so, on the face of it, one might say the banks do not benefit but we must be conscious of their facilitating the remediation work for future mortgages. There are questions that need further consideration in order for us to be satisfied regarding the point about state aid.

It depends. The first port of call would be to get legal advice from the Attorney General's office and then, depending on what that looks like, if it was clear that state aid was involved, there would be engagement with DG COMP to get approval to proceed. There are certain circumstances where a scheme can still proceed but that would involve engagement with DG COMP, which could take six months to a year.

I apologise for joining the meeting late. I could not join earlier because I had responsibilities in the Dáil, but I was present for the entire session last week.

My first questions are for Mr. Rafferty and Mr. Wickham. Could I ask them if they watched the entirety of last week's proceedings? Did they watch them back or get a chance to review them?

I believe the point they made was that they initially confirmed what they had confirmed to us prior to the meeting, which is that once a house had been remediated to the standard under the scheme, that would be something they were comfortable with. I then noticed that the position evolved at the end and a view was taken - I am not sure if it was a personal view of the individual or an institutional view - that they would recommend the testing of foundations, and that was one of the concerns they raised. I cannot comment on the science or verification of that. I know they were probably taking a precautionary approach in regard to another aspect, where they were talking about the disagreement between the two sets of engineers. I understood where they were coming from. On the foundations issue, I cannot comment. All I can say is that, from our understanding, there is no science to say categorically at this point that the foundations are affected.

I think “concern” is the wrong word. We take everything that is stated by all of the stakeholders as being important, in particular if the change has evolved and has moved along, as it appeared to do in livestream, as such, when I was watching it. At the very start of the meeting, they had not changed their position. They were at the position they had been at when we had discussions with them several times over the intervening weeks.

Engineers Ireland gave evidence to the Oireachtas housing committee last year at a session chaired by Deputy Matthews, who is chairing this meeting. Is Mr. Rafferty aware of the evidence? The date was 13 July 2023. Mr. Rafferty said the representatives of Engineers Ireland have changed their position.

To clarify, what I said was they have changed their position even from the initial statement they made at the start of the meeting last week. At the end, they seemed to have moved a little following the discussions and after they were given an additional view on the foundations that was not a position that we were aware of prior to them coming into the meeting. That is what I am talking about.

The witnesses should be aware of the Engineers Ireland submission to the committee on housing last year, some ten months ago. It states:

Some engineers are of the opinion that IS465 is not fit for purpose as long as it does not consider sulphide oxidation in Donegal defective blockwork and the standard should be updated based on available research. Updated guidance on acceptable thresholds for free mica and sulphide levels should be provided.

I will also quote from the submission it gave at the start of last week’s committee meeting before we had even started to probe the matters. It states:

The completion of this review is both essential and urgent, especially given the requirement of engineers employed by the Housing Agency, pursuant to section 12 of the Remediation of Dwellings Damaged by the Use of Defective Concrete Blocks Regulations 2023, to address an “indication of the potential for future deterioration of retained blocks in their current state”.

I could go on but, essentially, it was very clear that Engineers Ireland has profound concerns about IS 465. The Government states that this enhanced defective concrete blocks grants scheme, which is potentially a multibillion euro redress scheme, is the largest redress scheme in the history of the state. Does Mr. Rafferty agree with the statement that they are both realities?

The previous Taoiseach, Deputy Micheál Martin, said it was the largest redress scheme in history. Does it concern Mr. Rafferty that the largest redress scheme in the history of the State, which is potentially going to cost multiple billions, is based on desktop studies, not on peer-reviewed science? That is what IS 465 is. Does it concern him that people are being asked to rebuild their homes based on a desktop study?

The development of IS 465 arises from a recommendation of the report of the expert panel on concrete blocks. NSAI was tasked to come together and develop a protocol for the diagnosis and categorisation of dwellings. That committee was representative of those who are involved in concrete technology and the Department sat on that group with other experts in the field, as well as representation from homeowner groups. A review of the technical knowledge available at the time was conducted. Within that group of the committee, there was a precedent for similar protocols to those that would have informed the pyrite remediation scheme. IS 398 was a very successful tool in terms of getting a common position in an approach to how we would diagnose these dwellings. Based on the evidence and the technical knowledge available at that point in time, the consensus was reached that IS 465 was the state-of-the-art standard to be applied.

The emergence of the questions around pyrrhotite came much later, after the publication of the standard. In fact, it probably would have been the summer of 2021 when, due to the application of IS 465 with a common protocol for testing and diagnosis, a body of evidence presented itself. That would have come from petrographers and those involved in laboratory services. Previously, what was available in 2017 would have been the emergence of homeowners' issues, given they had engaged with particular laboratories at the time. The science had evolved substantially since then. In fact, in April 2021, once the IS 465 protocol became stable, the Department, through our partners in Geological Survey Ireland, commissioned an open call for research, fulfilling a commitment from the report of the expert panel to improve knowledge on defective concrete blocks and deleterious materials. A substantial amount of money was made available to fund research but nothing came forward from anybody in particular with respect to concrete blocks or pyrrhotite.

Does that concern Mr. Wickham?

If we follow the logic of the existing scheme and if we look at the Q and A on the Department website, it assures people that the foundations are fine and that you can rebuild your new home on the existing foundations. This is despite international evidence that the existence of pyrrhotite in foundations means those foundations have to come out. I am thinking in particular of North America. That is number one. There is an assurance they will be fine. Does Mr. Wickham not think it is utterly reckless to not even test those foundations to verify? He will know that I am referring to various parts of North America where there have been schemes to remove and replace the foundations where pyrrhotite existed. Does he not think it is reckless to persist in insisting they do not test the foundations when there is that experience in North America? There is also internationally peer-reviewed evidence that pyrrhotite is now the dominant issue, in particular in my home county of Donegal. Is it not reckless to continue insisting on that?

What we have to take into account is the commitment we have to explore the issue in its entirety. Some research has been published, but there are several components of research that will be presented in the coming weeks, including accelerated agent tests conducted by the same research framework partners. That body of evidence will be presented in the round combined with some work the Housing Agency is conducting in terms of visual assessment of foundations. We should keep in mind that the condition of those foundations in their current state forms part of their decision-making process to reassure themselves that the damage manifesting itself is not consistent with foundation failure. I do not want to prejudge any isolated piece of research when the full facts are not available to us. However, they will be available to us shortly. The NSAI has given a commitment to take that on board in its consideration of an amendment to IS 465 with the knowledge that is available to it.

For my final question on this subject, I want to talk about 100% redress as referred to in Mr. Rafferty's opening statement. However, keeping with the quandary we are in now, Mr. Wickham would have seen the evidence last week. Engineers Ireland confirmed one set of qualified engineers is working for homeowners. It has recommended option one, full demolition. In a considerable number of cases that has been overruled by other eminently qualified engineers working for the Housing Agency. I had this exchange with Engineers Ireland last week. The difference is that one set of engineers is not indemnified while the other set of engineers is. I am referring to the engineers working for the Housing Agency who are indemnified. They are following to the letter the current IS 465. Does Mr. Wickham not accept it is extremely dangerous, in particular for the reputation of these engineers, that they are forced to adhere to the IS 465 standard that it seems nobody has any confidence in now? Emerging and overwhelming scientific evidence suggests this. The Housing Agency engineers are eminently qualified. I do not for one second question their bona fides. They are overruling colleagues who are peers and fellow members of Engineers Ireland. Are we not now in a disturbing scenario?

One feature of the enhanced scheme involves the central decision-making process as a strength to have a unified approach to dealing with the issue at hand. In the situation the Deputy describes, if a homeowner or their engineer is not satisfied with the decision of the Housing Agency, that decision can be appealed.

I could see the discomfort of Mr. Damien Owens, speaking for Engineers Ireland, when I put the scenario to him. You have one set of eminently qualified engineers disagreeing with another set of eminently qualified engineers. One set is not indemnified. One set does not have confidence in IS 465 and is therefore recommending option one. The other set, because it is duty bound and the engineers are employees of the State, must follow the letter of the law. Nobody believes this law will remain whether we get an interim ruling from the National Standards Authority of Ireland or a final determination. Nobody believes the current standard will stay in place and nobody has any confidence in it. It is a huge dilemma. I want to get Mr. Wickham's sense of that. It is an awful scenario. These are professionals who are protected by the State so they will not face challenge. However, I have to assume they are deeply uncomfortable overruling colleagues based on a standard nobody has any confidence in.

I thank Mr. Wickham and I appreciate his answers.

I will revisit Mr. Rafferty's opening statement. I know some of our colleagues have already said it. I had an exchange with Mr. Rafferty's senior colleague, Mr. Fergal Quigley, about this at a previous committee. I appeal to him not to have anybody from the Department of housing come in here again to say the grant amount covers 100% of the work required to remediate a home. It is utterly offensive. I will ask him to do the following. There are a number of facilitators working in County Donegal. These facilitators are ultimately employed by the State. They work for the Inishowen Development Partnership and the Donegal Local Development Company. It is their job to assist applicants to apply for the scheme. They are working with hundreds of families. For the information of Mr. Rafferty, many of these applicants, because of the time period these houses were built, are in their 60s and 70s. Some are in their 80s. They cannot access finance. No bank will lend a substantial amount of money to somebody of that age. They are tens of thousands of euro short, which is same scenario that led to the failure of the previous scheme and is why it had to be changed. In conscience, does he stand over that statement? How can he stand over the statement that 100% is being covered?

I appreciate the Deputy has not been here for all of this. I have gone over this a couple of times, but I will say it again. I stand over what is written, which is that the grant amount covers 100% of work required to remediate a home. The next bit states it is up to a maximum grant amount of €420,000. It is then subject to the rates applicable for the payment of the grant. Those rates are set on the basis of an expert report from an expert group led by Paul Forde and informed by the SCSI as the correct rate as to the cost of rebuilding a home. It takes a number of factors into account.

I will tell him why I think it is provocative. Mr. Rafferty is an intelligent man. I would say he is a very intelligent man. Why does he think 1,300 people turned up at a recent public meeting in the Inishowen Gateway Hotel in my hometown of Buncrana, County Donegal? Why does he think 500 people turned out at a meeting in County Mayo? If they were getting what Mr. Rafferty says is 100% redress or even close to it, does he think those types of numbers would be motivated to come out to public meetings?

I am not saying they are getting 100% redress. I am just clearly stating what the current scheme does. It covers 100% of the work up to a certain figure. I am not saying 100% and I have just said that the rates interact with this. They may end up with a lower amount. We do not have any visibility and I accept what the Chair said earlier about possible examples. I have been given anecdotal examples myself when I have spoken to homeowners.

Let us leave aside anecdotes. There are facilitators working at the coalface who are ultimately employed by the State. Mr. Rafferty can easily check this out. They work for the Inishowen Development Partnership and the Donegal Local Development Company. He should make it his business in the job he is doing to reach out to them in the next week, speak to both of them and ask them if they believe this grant covers 100% of the costs.

We can forget about anecdotes. That will be clear evidence from people working at the coalface with hundreds of applicants. If they confirm that in the vast majority of cases it does not, will the witnesses change their script the next time they come in, which is next week when they will appear before the housing committee?

We will look at what we need to address in the opening statement depending on what the subject matter of the meeting is. I know it will be broadly about concrete blocks. We will certainly take a look at anything that needs to be clarified or ironed out. I take the Deputy's point. I am aware of facilitators, not just in Donegal but in other counties, which the Department funds indirectly in a lot of cases. We are aware of the excellent work they are doing-----

Yes, and there are other excellent supports on the mental health side, where we have partnered with the HSE and so on. Our aim is to facilitate the scheme, insofar as possible within the framework we have been given by the Oireachtas, and make it work for people, and that includes issues such as that level of support.

I take the Deputy's point but I am not citing only anecdotal evidence. I have had a number of conversations with people who have stated to me that they may end up in a deficit. We do not have hard data at the moment because there have not been many completions of the scheme as yet to allow us to get that data, and it is going to be difficult to get it in any event, I assume, because it is personal information.

I am based in Buncrana, and when I step out my front door and look up to my right, I can see the quarry that is predominantly responsible for what has happened. It is a societal disaster. That is the only way I can describe it. I am 50 years of age. The people of my generation have had their lives destroyed in terms of what has happened to them. Marriages have broken up and people have taken their own lives. In some cases, people knew about it, whereas in others, they did not. It has been called an earthquake happening in slow motion. I ask Mr. Rafferty to please take it from me because I deal with homeowners who have been affected every day of my life. I deal with the collective trauma our community has suffered. This is nowhere near a 100% grant. In fairness, the witnesses stated it is not a compensation or redress scheme. I cannot understand why, therefore, they need to use the term "100%" in the following paragraph. It is just not factual or based on any evidence whatsoever. Our witnesses will see this if they talk to workers on the front line, to me or to any county councillor in Donegal.

The meeting in Buncrana that I referred to was held only in recent weeks. There was cross-party representation and up to a dozen county councillors and TDs. Not one public representative at the meeting, including Government ones, such as Fianna Fáil and Fine Gael county councillors, would have dared to say to the crowd it was a 100% grant. Indeed, they confirmed it was not. The whole purpose of the meeting was to get to 100% redress because everybody at the meeting was a victim and had done no wrong. They had been utterly failed in so many ways by the regulations of the State, which is why we have the scheme in the first instance. The State would never have brought it in if it had thought it had no responsibility.

I had this discussion with Mr. Feargal Ó Coigligh at the previous meeting. I appeal to the witnesses to never again come to an Oireachtas committee and state the scheme provides 100% redress. I appeal to them to ensure that language will never be used again.

Again, to clarify, my contention is that I am not using that language. We are not saying it is 100%. However, I will certainly reflect on what the Deputy said and the strength of the feeling he has put across. As I have said a few times during this meeting, I do talk regularly to homeowners in Donegal and I am aware of the strength of the feeling about all the issues that relate to this, not least the cost, especially for more vulnerable people. I will reflect on what the Deputy said in that context but I have not said it is 100% redress. That is just my view, but I will take away what he said.

Homeowners from Mayo, Clare and Donegal recently gave evidence to the housing committee and clearly articulated that, unfortunately, this scheme is going to fall short for most homeowners. We are facing an outcome whereby only those who have significant sums will be able to afford to access the scheme, because what they are doing is taking out the foundations and rebuilding their homes to the necessary standards. They are at the mercy of the market, however. Whatever about the notional cost, they are at the mercy of the market. When you add professional fees and everything else, the only people who can access the scheme right now are those who can access significant levels of finance. That is the reality. It is not based on which houses most urgently need to be repaired. If someone whose house urgently needs repair does not have access to the finances, that is tough and they will be out of the scheme.

I am giving our guests honest, eye-witness testimony. I challenge any public representative anywhere to question anything I have said at this meeting. It is absolute fact, based on being on the ground and talking to families every day, as well as to the facilitators and everybody on the front line. Sadly, the language the witnesses have presented today is an egregious mistake. I accept that the Minister and the Government made the decision, rather than the witnesses, who are public servants implementing Government policy. I accept that and I said that Mr. Ó Coigligh at the previous meeting when I acknowledged that is the extent of their responsibility, but they have voluntarily used that language in the statement, with the term "100%", when a significant majority of homeowners are excluded because they cannot access the finances. Representatives of the Central Bank and the Department of Finance are here and I am telling them people cannot access the finance to avail of the scheme. They cannot access it and they are stuck, with their lives destroyed, with no solution.

I will leave it at that. I just hope that when representatives of the Department appear before the housing committee, that language will not be repeated, that it will be reflected on and that people in the affected counties will be heard. That is all I ask.

I do not mean in any particular context. The Department would have been notified because we have been dealing with these problems for a long time, as I certainly have been in Mayo, given they were first identified, as the witnesses will know, in Erris and Belmullet and on the Mullet Peninsula. That was in about 2013. I heard pyrrhotite being mentioned at that time, actually in the context of incidents that were arising abroad, when we were trying to learn about what was happening when these houses were crumbling. Did the Department at that time not have reference to pyrrhotite?

The causes of the issue that originally presented itself came substantially from the concerns of homeowners in Donegal, which pointed towards mica. I think that was the origin of it. Through some radio commentary, a number of people identified that they had similar issues.

From that point, in around 2013, those findings were brought to the Department to investigate the issue. A commitment was given in 2015 to establish the expert panel on concrete blocks. It did a scoping exercise on the general nature and potential causes of the issue. It published its report in 2017, which was the basis of the recommendation to establish the committee on IS 465. It emerged from that point.

During the generation of IS 465, a number of houses were tested to inform the decision-making process. Through the general consensus of standardisation, writing the first edition of IS 465 became what it is at this point in time. The emergence of more data that pointed towards something else happening really came to the attention of the NSAI in the summer of 2021. As I pointed to earlier, in April of that year the Department, through Geological Survey Ireland, commissioned open calls for research to explore issues to improve technical knowledge in this area but nothing was forthcoming with respect to pyrrhotite emerging as a particular issue. Once the NSAI committee received a body of evidence, it made a commitment to look into it further. Since then it has become the project that it is today. Research partners have been procured and the right experts are involved. We have had transparency in terms of how we correlate various expert results on it. The fruits of this will emerge in the coming quarters.

The expert panel on concrete blocks did an in-depth literature review at the time of its report in 2017. While there is a lot of international experience of iron sulphides in concrete, there is very little, if any, associated with the degradation of concrete blocks, which is a fundamental different matrix of form to concrete. Its direct application to concrete blocks would not correlate well.

SI 12620 with respect to aggregates for concrete has particular threshold limits associated with the presence of deleterious materials and limitations on total sulphur. In 2016, the NSAI published SR 16, which makes provision for a full description of how manufacturers should demonstrate their knowledge of raw materials through petrographic assessment of the quarried material and a declaration of compliance for its intended use. This has been reinforced in parallel with a system of oversight by a notified body to ensure that factory production control is maintained at the quarry where that material is placed on the market and that there is appropriate competency of the professionals, equipment and process to deliver material that, ultimately, is fit for purpose.

The obligation primarily rests with the manufacturers to make sure they are putting compliant material on the market. As I have said, the standards have reinforced how the process is undertaken in the quarry, how the declarations of the various characteristics of these products are demonstrated to the supply chain through CE marking and declarations of performance, and how we have effective market surveillance to give oversight to ensure the-----

When Mr. Wickham says "market surveillance" are there checks so the Government can stand over it in terms of regulations? One of the biggest surprises we got when we started looking at this, because we automatically assumed the materials coming out of the quarry were insured, guaranteed or regulated, was that we quickly realised that everything, from the noise to the environment and everything around it, was being regulated except for the materials coming out of the quarries. Are they regulated to a standard now whereby people can be assured that what is coming out of the quarries is fit for purpose? Are we leaving it to the industry and those who manufacture the blocks? This is what I am trying to get to.

If we go back to the chain of responsibility, it starts with the manufacturers. The manufacturers should make it in accordance with the harmonised European standard, taking into account the national provisions that exist, with certain limitations on performance that are stipulated in Standard Recommendation 16 produced by the NSAI. Through this process, the manufacturers must engage with the third-party independent notified body to ensure they have competent factory production control to have repeatability of a compliant product being placed on the market.

The manufacturers must engage with a petrographer to assess the quarried material and have a professional geologist make a statement of compliance on the suitability of that quarried material for a variety of intended uses. On that basis, they make a declaration of performance for the market. When it gets used in a building, equally there is a chain of custody of responsibility for those who specify, procure and put together the materials.

To go back to the point on who is checking this, ultimately it is the responsibility of the manufacturer to comply with the harmonised standards and national provisions. The market surveillance authorities, which are the 31 building control authorities supported by the National Building Control and Market Surveillance Office, implement a market surveillance strategy that has a focus-----

I am sorry. I did not say it was not a crime. It was also a crime in 1992. The 31 building control authorities were market surveillance authorities. We must also consider the fact that the number of harmonised standards that fall under their remit is in the order of 450 different standards of multiple products. It is, ultimately, the case that the obligation is on the manufacturer to ensure that a compliant product is placed on the market and a risk-based approach is taken by market surveillance to investigate any non-compliance and regularise matters as they see fit.

Does Mr. Wickham see why it is difficult for people to have confidence when we have the layers and layers of responsibility that he is talking about? It is just very difficult to get to who is responsible and who would be responsible if there were to be a similar situation again. Let us take the example of someone who has their home built today and it is built with materials coming out of a quarry that are then found not to be fit for purpose.

No, you do not have to apologise. Does Mr. Wickham see that when there is a chain of responsibility, when everybody is responsible, then nobody is responsible? Mr. Wickham is just going to keep repeating that there are different layers in place. He has pointed this out and it is on the record. I am still at a loss, however, to know why independent tests are not done by the Government when we are in a situation where we are paying out over €2.2 billion. I do not know why the Government would not see it as very important to test and to have regular, independent tests of quarries and the material coming out of them, and not just to have tests done by industry.

What I am saying is that the rules of making a product and marketing it are governed by an EU regulation. To place a product on the market, it is necessary to implement the system I described in terms of having full knowledge of the raw material, having all these tests done frequently, having factory production control in place and having a declaration of performance and a CE mark on the product as being fit for its intended use. This legislative framework is the law and it is unlawful not to comply with it. Market surveillance is the State's oversight of the provisions of that legislation. When material gets used in a building, we then move into the ambit of the building control regulations and compliance with them. By and large, this involves competent professionals and the statutory certification of a building to allow its occupation and safe use when completed.

I just wonder how it is that there is nobody who can be sued now in relation to what has happened here. This is costing taxpayers over €2.2 billion. Mr. Wickham is saying that everything was compliant at the time and that everybody was responsible but nobody was responsible. I am just not sure what would happen if the same problem were to occur today. When Mr. Wickham says it would be a crime and illegal, would arrests be made if this were to happen? If materials were to come out of a quarry today, what sanctions would be imposed if those materials were found to be not fit for purpose?

Yes, that would be helpful.

The opening statement from the Central Bank states: "We also note the clarifications provided to the Department by the representative bodies on how the scheme should work to ensure renovated properties can meet the standard criteria for mortgage and home insurance applications." Will Mr. Murphy speak further to that?

It relates to the statement the BPFI issued in terms of the clarification of what it required for mortgageability, so the certificate of remediation being sought in that regard. The BPFI issued two statements to the Department that gave that clarity in respect of what would be required. As far as I am aware, Insurance Ireland provided some information as part of the question-and-answer session in respect of the operation of the scheme and what would be required in terms of remediation to get the standard back up to that required to get insurance.