Saincheisteanna Tráthúla - Topical Issue Debate – Dáil Éireann (34th Dáil) – Wednesday, 25 Jun 2025

Saincheisteanna Tráthúla - Topical Issue Debate

Disability Services

Deputy Donna McGettigan

Throughout the State, more than 15,000 children are currently overdue an assessment of needs. Under the Disability Act 2005, children are entitled to assessment of their educational and health needs within six months of being on the waiting list, so each of these 15,000 children represent a breach of law by the Government. In my constituency in Clare, parents who are at their wits' end are contacting me. They are watching helplessly as the childhood of their son or daughter passes by year after year with no intervention to improve their quality of life. It is shameful that these parents have to fight every day to try to get the services their children badly need and deserve.

I have been helping a mother whose child was originally screened at the age of seven and referred to CAMHS. That was more than ten years ago. In the meantime, the child has developed further symptoms and complications and is struggling with their mental health because they cannot understand why they are so different from everyone else and have difficulty with everyday interactions. The family's GP has been very supportive but can do little more. The child is now on antidepressants and receiving some counselling from Pieta House. That mother has been pushed from pillar to post. She is constantly having to fight, even to talk to someone about the possibility of her child receiving an assessment. In more recent years, she became concerned her child would be considered an adult and have to start again on a new waiting list. In response to inquiries I made on her behalf, the HSE acknowledged the child was referred to primary care services and was on the primary care register. However, we were also told that an assessment service is not currently provided by primary care services. A private provider was commissioned to provide the service but later found it could not recruit the people it needed and this arrangement was scrapped.

We were not told, however, how much time had elapsed between the beginning and end of that process. How long was wasted waiting for a private provider to reach the conclusion it could not provide the service for which it had been commissioned? I was told by one parent that it took two years to realise the process would not work. We were also told that in an effort to address the unacceptable waiting times for children on the primary care register, the HSE was engaging with private providers to outsource multidisciplinary assessments. Will the Minister of State explain why the previous process involving private providers failed but this one is expected to succeed? As the process has just commenced, we could not even get an expected date for when the service will be provided. Can the Minister of State provide a target start date for the service? The nearest thing we got to reassurance was being told the child would remain on the waiting list and would be seen in chronological order regardless of how long they would have to wait. This is simply unacceptable. Their childhood is wasting away and they will never get that time back.

Another parent of a nine-year-old child described the enormous strain it places on her and her family who are struggling to help the child. They have been waiting for three years for an assessment and without it, the child has not received the supports they need. This mother received much the same response as we did to our inquiries, that a private provider was unable to recruit the necessary staff, a different provider is in the process of attempting to recruit staff and the HSE is awaiting results of its efforts. What is the point of repeating the same failed strategy? Parents should not have to spend their lives fighting to get the services their children are entitled to.

The Government's failure to implement the Education for Persons with Special Educational Needs Act 2004 has resulted in the education system and the National Council for Special Education, NCSE, not being able to deliver for children in school environments. This places additional burdens on already overburdened specialist services. Can the Government provide a date for the full implementation of the 2004 Act? Can the Minister of State provide a target date for when the Government will be compliant with the six-month rule set out in the Disability Act 2005?

Minister of State at the Department of Rural and Community Development and the Gaeltacht (Deputy Jerry Buttimer)

I thank the Deputy for raising this important matter. I apologise that the Minister is not here and that I do not have a copy of the speech for the Deputy. I will get it to her as soon as possible.

Like her, I deal with parents and children every day and every week and she is right that there is frustration. We all need to work collaboratively to ensure access to services is improved and that parents and children who deserve to receive them do so. The Government is fully committed to addressing the challenge of the growing demand for assessments of needs. It is important to know that children do not require an assessment of needs to access health services, including those provided by primary care, children's disability network teams, CDNTs, or mental health services. However, demand for assessments of needs continues to grow beyond the current capacity of the system to meet it.

It is a stated priority of the Government to ensure a sustainable solution is put in place to address waiting times and waiting lists for assessments of needs. Officials in the Department of Children, Disability and Equality are working to identify the delays and blockages that are resulting in children waiting too long for an assessment of need and to find the most effective means of addressing them. This is likely to involve operational changes, increased staffing resources, better IT systems or outsourcing to the private sector where appropriate. In addition, officials are working with HSE senior management and experienced clinicians to identify legislative changes to improve effectiveness and efficiency within the assessment of needs process. It is important to note that any proposed changes will not affect the statutory right of any person to access an assessment of needs. Work is under way to deliver existing actions and address new ones to address the backlog.

One such important action is the targeted waiting list initiative, which funds the procurement of capacity from private providers to deliver assessments of need, targeting those families waiting longest. HSE data show that more than 3,600 assessments were commissioned from private providers between June 2024 and the end of March this year under this initiative, which will continue to run for the rest of the year. However, we cannot rely on the private sector indefinitely and we need to support the public system to meet demand. Efforts are continuing to improve staffing in the public system through recruitment and retention actions. Looking at the CDNTs in particular, there has been clear progress with recent HSE data showing a decrease in CDNT vacancy rates from 29% in October 2023 to 18% in April of this year. The positive impact of these initiatives is becoming visible as regards the number of assessments of need completed. There was a 30% increase in the number of completed assessments last year compared with 2023, and in the first three months of this year, more than 1,400 assessments were completed nationally. That is a 65% increase compared with the same period last year. We recognise there have been improvements, but there is more to be done. I accept the points the Deputy made. If she would like to give me the case studies she spoke about this morning, I will gladly bring them back to the Department for her.

There is still a significant backlog with almost 15,300 assessment of need applications overdue for completion nationwide at the end of March. This is an 8% increase on the number overdue at the end of 2024 and clearly shows the scale of the challenge. However, looking at the figures for HSE Mid West in particular, some progress can be seen. Although 434 applications were overdue at the end of March of this year, this is a decrease of 1.8% compared with the number overdue at the end of December. Although it is a small change, it is as step in the right direction. It does not meet the needs of the parents the Deputy mentioned this morning. I accept that.

Addressing the delays in accessing assessments of need and the growing backlog of applications is a challenging and complex issue. The Government is absolutely committed to addressing this to ensure that children who require an assessments of need receive it as soon as is practically possible.

Deputy Donna McGettigan

I already gave these cases to the Government and they were referred to the HSE, which is where we got the answers that reliance on the private sector is not working in the HSE Mid West region. While I appreciate that there are difficulties in the system, especially around the need for robust regulation of psychologists, just 7% of assessments were completed within the six-month timeframe required by law.

CORU was established under the Health and Social Care Professionals Act 2005, and part of its remit was the regulation of psychologists. This problem has been rumbling on for years now and far too little action has been taken by Government to date. We in Sinn Féin want to see the building up of strong public services accessible to all on the basis of need. That requires action from the Government to ensure that the proper regulatory framework is introduced for psychologists. However, this is an emergency so in the short term the use of private assessment with reimbursement for parents must be expanded dramatically and as quickly as possible. I understand that even without the required regulatory framework, there is an informal list of reliable psychologists with a proven track record. Since 2021, the waiting list for assessment has gone from 500 to over 15,000. That is a shocking indictment of Government inaction. Judging by the responses I have received to representations made on behalf of constituents, it is likely to get worse. The lack of intervention to meet the needs of children is nothing short of scandalous. I ask the Minister of State to provide some hope to parents struggling daily to cope without the services they so badly need. Can he outline how this appalling state of affairs can be ended and the waiting list backlog cleared quickly? I remind him that there is a legal obligation on him to do so and plans should have been put in place long ago to recruit and train the staff required to do this. I also ask the Minister of State to ensure that clearing the backlog of assessments will not simply move the bottleneck further along, and that an adequate number of school places for children with special needs, suitable services and supports required by them will be available when they have had their assessment of need.

Deputy Jerry Buttimer

I thank the Deputy again for raising this very important matter, which is a priority for the Minister and the Government. This is reflected in the current programme for Government, which includes a clear commitment to support families who are waiting for assessments of need and to ensure children and their families can access the supports they need. The Minister understands the scale of the challenge but is encouraged by the activity under way. This is delivering results in the increased number of completed assessments and ongoing efforts to enhance the capacity in the public system to deliver assessments of need. The Minister also knows that there is a lot more to be done, as the Deputy outlined. She has tasked officials within her Department to delve deeper and identify issues within the assessment of need system that are causing delays. She has also asked them to consider those large system-wide factors where parents feel their only option is to seek an assessment of need for their child. In addition, officials in her Department are working with HSE senior management and experienced clinicians to identify legislative changes to improve the effectiveness and efficiency within the assessment of need process. It is important to note that any proposed changes will not affect the statutory right of any person to access an assessment of need. The Minister can assure the Deputy that the matter will continue to receive the most urgent attention and Government will continue to work intensively and collaboratively to put in place an effective and efficient assessment of need system to deliver the service that children and their families need.

School Accommodation

Deputy Duncan Smith

I thank the Minister of State for being here this morning. I represent Dublin Fingal East in north County Dublin, which has a very young and fast-growing population. There is a lack of primary school places in the village of Portmarnock, which is an issue I have been raising for a number of months. I have tabled parliamentary questions to the Minister. Unfortunately the responses have been most unsatisfactory. I tabled a parliamentary question about primary school places and get a response about post-primary school enrolments and the pressures in that space. That is the not the question I was asking, which is why I am bringing the matter to the floor of the House. I will continue to raise it because I feel strongly, and the data will back this up, that we are in for a crisis that is manifesting itself in Portmarnock. The reality on the ground is very different from the version the Minister has outlined in her response to my parliamentary question. Primary schools have only been taking children up to the November birthday in the first round and the December birthday in the second round, which is becoming earlier and earlier this year. Essentially, children born after December are being told that there is no room at the inn when it comes to primary school places in Portmarnock. Children are beginning to have to start school at age six. This is before the crisis has reached its peak.

I will throw a lot of figures at the Minister of State. We estimate that there will be a 120-place deficit per year for children in the area in the very near future. This is likely to be a bit of an underestimation. I thank a number of residents in Portmarnock who have assisted in gathering this data for me. Based on publicly available data from the CSO and the Department of Education and planning permission websites in respect of new estates, the 2022 census captured the under-5s population to be 602 children. These children would have been in the area by April 2022, the time of the most recent census. Taking an even division of ages zero to four, that would equal approximately 120 children requiring junior infants placement and subsequent primary school class places from September 2022 to 2026. However, since the latest census there have been several large housing developments in the area, namely Dún Sí, Skylark, St. Marnock's Bay and Drumnigh Manor, increasing the population in the area rapidly. These housing developments are of course welcome but they need to be paired with increased infrastructure. I have worked up a couple of examples for the developments and the estimated and expected number of children need primary school places from these estates alone. The Skylark development has 982 units proposed, providing mainly three- and four-bed family units. Nationally 69% of households in Ireland are families, based on the 2020 figures. The Fingal county average for the number of children per family is 1.42, a conservative value based on anecdotal evidence from the Portmarnock area. Using these conservative estimates of these 982 units, there would be an expected 962 children in this one estate alone. Extrapolating the same logic for Drumnigh Manor, where there is a total of 278 units of which approximately 100 were sold around the time of the April 2022 census, leaving 170 further units, that would be an estimated 174 children within these households. That is a total of 1,136 children estimated to be residing in these estates alone once complete, a sub-population of the total Portmarnock area which is not taking into account families that are moving into the older houses of which there are many. Not all children are the same age, of course. It is estimated that over the next two to seven years, there will be a need for approximately 220 to 230 junior infants placements each year for the children of Portmarnock. The two existing brilliant primary schools in the area have a combined capacity of 120 to 140 children based on the catchment size data.

Deputy Jerry Buttimer

I thank the Deputy for raising this matter. It gives me the opportunity to remind the House on behalf of the Minister for Education and Youth of the significant challenges facing us in meeting increasing demand for pupil places throughout the country. As the Deputy raised the issue of Portmarnock in the coming years, I am grateful for the opportunity to clarify the position on the provision of primary school places in Portmarnock, Co. Dublin.

I assure him that the provision of both mainstream and special education school places to meet the needs of children and young people at primary and post-primary level is an absolute priority for the Department of Education and Youth. The annual enrolment process for new junior infants at primary and new first years at post-primary is a very large-scale operation that is transacted at close to 4,000 schools across the country, involving 140,000 pupils. The Department divides the country into 314 school planning areas and utilises a geographical information system to anticipate school place demand to plan for school place needs. Information from a range of sources, including child benefit data, school enrolment data and information on residential development activity is used for this purpose. Additionally, Project Ireland 2040 population and housing targets inform the Department's projections of school place requirements.

Portmarnock school planning area, SPA, has five primary schools. The SPA enrolments are projected to peak in 2027 with enrolments decreasing thereafter. While the Department is aware of enrolment pressures and demand for additional school places in some areas, including Portmarnock, it is important to note that enrolment pressures can be driven by duplication of applications, applications from outside an area, and school of choice factors. Notwithstanding the above, in some areas, demographic pressures and other factors are driving a requirement for additional school places. I have heard the Deputy regarding the matter he has raised here in terms of a deficit of places. Since 2020, the Department has invested over €6 billion in our schools throughout the country under the national development plan, involving the completion of over 1,375 school building projects. Government support for this investment, including by way of supplementary capital funding, has delivered real benefits for school communities. A recent Government decision approved €210 million supplementary capital funding for the Department, which brings the total capital allocation for 2025 for the Department to €1.6 billion.

The Department currently has a school building project for Malahide Portmarnock ETNS, which is at stage 2b or planning stage of the architectural process.

This project is for a new 16 mainstream classroom primary school, with four special educational needs classrooms to accommodate pupils with special educational needs. The Department also has two additional school accommodation projects to provide additional capacity in the area, namely for St. Nicholas of Myra national school, and St. Helen’s senior national school, which are both at stage 1 or initial design.

As part of the national development plan review process, all Departments, including the Department of education, are engaging with the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation with respect to NDP allocations for the period from 2026 to 2030. It is expected that there will be clarity on these allocations over the course of the summer period, and this will allow the Department to plan its capital investment programme for the 2026 to 2030 period, in line with prioritised needs and reflecting, as appropriate, wider Government priorities.

Maximising existing capacity in schools to meet needs is very important. The progression of prioritised individual projects to meet the most urgent needs in the four-year window between 2026 and 2030 period, which cannot be met through existing capacity across schools in the local area, will be considered on a rolling basis from autumn onwards, after the NDP allocations are finalised.

The Department's main responsibility is to ensure that schools in an area can, between them, cater for all pupils seeking school places in the area. In relation to school admissions, it is the responsibility of the managerial authorities of all schools to implement an enrolment policy in accordance with the Education Act 1998.

I will bring back the Deputy's remarks on the figures he has raised. If he wants to give them to me I will happily give them to the Minister again. The Department will continue to keep school place requirements in the Portmarnock school planning area, as with all other areas, under review.

Deputy Duncan Smith

I thank the Minister of State. I sit on school boards, as the Minister of State probably does or has done. I am aware of the matter of duplication. This is why we have presented the data in its baldest form. Duplication is not an issue. I know it sometimes is an issue in other towns but it is not an issue in Portmarnock.

The development and provision of a large new school building for Malahide Portmarnock Educate Together is very welcome but it will not solve the issue with regard to Portmarnock alone. The enrolment policy of Educate Together is not geographically based. The school will serve kids in Malahide, Kinsealy and Portmarnock. The new estates being built in the south end of Portmarnock right beside the train station are high density, as I outlined. There is a very young population. A greenway is being built from Baldoyle through Portmarnock, going up the village on its way. It will be a wonderful active travel facility. This is a natural place for parents to be able to walk, cycle or scoot their children up to the existing St. Marnock's primary school, or a little further on to St. Helen's. This is why it is about the provision of capacity in the village, which is where these houses are.

When applying for planning permission for these houses, the developer mentioned up to eight schools in the area that could cope with the increase in children these houses would bring. However, the vast majority of these schools are not in Portmarnock and have enrolment policies that preclude children from these estates attending. There are schools in Sutton, Howth and Bayside. This is a very serious issue and we have compiled the data. I will send it to the Minister and I ask the Minister of State to do so also. We will be back on this issue. It is different from other areas, which is why I am setting it out here. With a bit of planning it could be resolved by the Department.

Deputy Jerry Buttimer

I thank Deputy Smith for raising the issue and I hear his remarks and concerns regarding the provision of school places at primary level in Portmarnock. The Department uses data from a range of sources, including child benefit data, enrolments and information on new residential developments to plan for school placement needs. I will take the points Deputy Smith has made back, and I ask him to provide the information to me so that I can give it to the Minister and the Department. There has been significant investment in school infrastructure since 2020. The Department is continually planning for, and investing in, existing and new schools throughout the country. The nature of the admission process is considerable and quite complex as offers and acceptance continue to transact. There can be significant overlap and duplicate applications throughout areas and schools. While some applications may not yet have received an offer for a school place for 2025 to 2026, families can be assured that all children who require a school place will be provided with one. I will take the Deputy's remarks back and I hear his concerns most definitely.

An Cathaoirleach Gníomhach (Deputy Aidan Farrelly)

We do not have written responses for the first two Topical Issues. I am sure we will have them provided as soon as possible afterwards.

Deputy Jerry Buttimer

I apologise because I was not given copies of the script.

An Cathaoirleach Gníomhach (Deputy Aidan Farrelly)

Absolutely.

Data Centres

Deputy Colm Burke

At present there are 82 data centres in Ireland. They use up 6 TWh of electricity, which is 21% of all electricity produced. There are 14 data centres under construction, and a further 40 centres have planning permission. By 2030 there is potential for 100 additional data centres in Ireland. It is now a major challenge. There is concern that the fact they use 21% of the electricity will put pressure on the electricity suppliers with regard to being able to cope with the demand. The companies involved in data centres have represented to me that the best way to deal with this is for them to be able to lay cables from the power source. What they propose is wind turbines at sea. Cables brought from these would go directly to the data centres. The data centres would then have their own power lines and would not be reliant on supply from the main electricity suppliers in Ireland. There would be the added advantage that any surplus electricity they have would be fed back into the national grid.

The advantage in Ireland with regard to data centres is that Ireland has 10% of all of the European data centres. For a country of this size it is a phenomenal percentage to have. With the generation of AI and everything else, we will have even more demand for data centres. Therefore, we must respond appropriately with regard to how we plan forward. We also need to plan for the provision of electricity and the generation of electricity, and we need to fast-track the issue of wind turbines at sea. We probably have the best potential in Europe but compared to Norway or Sweden we are very much at least ten, if not 15, years behind with regard to generating electricity from wind turbines at sea. There is also the challenge that when wind turbines are put on land there are concerns because no matter where we put them they are within a very short distance from existing dwellings. This can cause its own problems for the residents of the houses.

We need to fast-track the legislation to deal with this. We need to encourage, and provide licences for, wind turbines to be put in place at sea. We need to go through the planning process and get them up and running. We also need to legislate so that data centres, which have the resources and finances to do so, can lay the cable directly from the source of electricity to the data centre. Any surplus electricity would be fed back into the grid. This issue needs to be given priority. We have a growing population. Recent figures show that 5.45 million people are now resident in Ireland. It is a growing population. We need to generate electricity and cater for the companies that want to develop data centres in future.

Deputy Jerry Buttimer

I thank Deputy Burke for raising this very important matter. He is right to highlight the relationship between data centres and electricity demand, which is a global challenge. There is the additional demand for energy by data centres and the need to ensure we are competitive. I am taking this matter on behalf of the Minister for Climate, Energy and the Environment.

I will first set out the work this Government is doing on private wires, which is the policy area that will allow for demand users to connect directly to generators, and I will then set out the work we are undertaking in respect of data centres.

The current legal position in Ireland is that, other than in limited circumstances, only the ESB can own an electricity distribution or transmission system and, as such, the supply of electricity from generation site to demand user takes place on the ESB-owned national electricity grid. Deputy Burke may be interested to know that this position has its roots back to the early years of the State and the establishment of the ESB in 1927. Following its establishment, the ESB set about creating a standardised national electricity network and have owned what we now know as our national electricity grid ever since.

The current electricity market and environment is very different now, with a liberalised and interconnected market in operation. As the Irish energy sector evolves further with a move towards renewables and a zero-carbon economy, there are opportunities to alter the environment in which electricity supply takes place. Private wires provide one such opportunity and, on a basic level, refer to private individuals or undertakings running their own electricity cables in order to transfer electricity from one site to another.

Having received Government approval on 4 July, the Department published a set of guiding principles for the development of a policy on private wires. The principles, while not making immediate changes, are to guide any changes which are to come and provide guidance to the public and industry as to the direction of travel in respect of this key area while reiterating the central role the national electricity grid will continue to play in our electricity system.

Developing a private wires policy is of importance to this Government and an action was included in the programme for Government to expedite the delivery of this policy. It is the Minister's intention to bring a policy document on private wires to Cabinet next month. The private wires policy will, among other things, aim to unlock private sector resources to build new electricity infrastructure by expanding the rights of private undertakings to connect supply directly with demand. The intention is that private wires will accelerate investment in new electricity infrastructure, including renewable generation and storage, in a manner consistent with the guiding principles of the private wires policy, thereby increasing the availability of power within the wider electricity system. An example of a private wire which may be seen in the future is where a manufacturing plant builds a private connection directly to a new renewable generator. Once introduced, this policy will require primary legislation, along with increased powers and staffing for the Commission for Regulation of Utilities, which this Government will move to implement as a priority.

While the Deputy has asked about data centres, it is worth noting that the private wires policy will be broader than just data centres. Data centres, while playing an important role in our economic prosperity, are just an aspect of many businesses, both indigenous and foreign, based in Ireland.

As part of developing a private wires policy, the Department undertook a detailed public consultation during 2023, the results of which were published along with the wider policy principles in 2024. As part of the public consultation, the views of numerous stakeholders representing various parts of the economy, including data centres, were sought and considered by officials.

Deputy Colm Burke

I note the Department has progressed this matter. However, I am concerned about the time period with regard to developing this policy further. We are under pressure with increasing demand for electricity. Therefore, we need more facilities in place to generate that electricity, whether it is through solar farms, wind turbines or new forms of generating electricity. We need to fast-track it now because the economy is growing at a far faster rate now than anytime before, and data centres are making a huge contribution to the economy as well.

As I set out earlier, there are 14 data centres currently under construction and another 40 have planning permission. Therefore, the demand for electricity will increase, and we need to respond to that demand. Some of these centres may not be able to progress because the infrastructure is not there to supply the electricity to them. We therefore need to see how we can fast-track it but also how we can fast-track the whole issue of licensing to allow the building of wind turbines at sea and make sure that can be done in a timely manner. It is interesting how other countries in Europe have been able to do that, and have done it over a very short period because they saw the demand was there.

Another issue has occurred in the past two to three weeks. The issues in relation to the conflict in the Middle East show that there was a threat for a period that we might have a sudden shortage or that there would be restrictions on the supply of oil. It further highlights the reason we need to be self-sufficient in the generation of electricity, whereas we are currently reliant on resources from abroad. We need to give priority to this.

Deputy Jerry Buttimer

I thank Deputy Burke for his contribution and comments, and I will take his remarks back to the Minister. As I said earlier, next month the Minister will bring a policy document on private wires to Cabinet. However, private wires alone will not solve the issues currently facing the data centre sector in Ireland. To date, Ireland has attracted the best data centre and tech companies in the world, which is an important relationship, and Government continues to work with the sector towards a secure and decarbonised energy future.

Data centre electricity demand is a global challenge for companies and governments. In Ireland, there are current and real network constraints in facilitating new data centre connections, particularly in Dublin. The Commission for Regulation of Utilities is currently reviewing the results of the recent public consultation on a new proposed data centre connection policy. While in the near term already-contracted data centres will be accommodated in the grid, for the medium term, the Government is committed to developing a plan that will, inter alia, guide the development of plan-led data centre infrastructure to provide a certainty to the sector over the medium term. The programme for Government commits to scale up investment in critical infrastructure, including electricity, and this is key to facilitating the delivery of future demand growth.

I expect the Commission for Regulation of Utilities to shortly publish its minded-to decision on price review 6. PR6 will see the CRU approve by year end the investment in the grid spanning the four-year period 2026 to 2030. ESB Networks, as part of the PR6 process, has requested a baseline investment in the onshore grid of €10.1 billion, with the potential to grow to €13.4 billion. This is an increase from the €4.4 billion approved under PR5.

In conclusion, PR6 will assist in Ireland maintaining a reliable and resilient electricity network to meet the needs of customers and society, delivering additional network capacity at all voltage levels.

Mortgage Interest Rates

Deputy Séamus McGrath

I thank the Minister of State for being here to take this question. It is critically important that we continue the downward pressure on interest rates in Ireland. I acknowledge significant progress has been made in recent times in reducing mortgage interest rates across this country and bringing them somewhat more in line with EU averages but, unfortunately, we are still above EU averages.

As the Minister of State knows, we are now at a time when the banks are very profitable. The State has divested its interests in AIB recently and, of course, in Bank of Ireland previously.

It is critically important that the focus does not slip in respect of mortgage interest rates. This topic has been raised many times over the years in this Parliament. It has been highlighted repeatedly. Progress has been made, and I acknowledge that. However, we have to continue to shine a light on this to ensure that mortgage rates continue to fall.

As we know, mortgage repayments represent a very sizable part of household expenditure on a monthly basis - the basket of expenditure. It represents a very high proportion of that. Of course, we have seen recently that Ireland is a very expensive country in general compared with other EU member states. We are the second most expensive country in the EU, and that is a significant issue.

Regarding interest rates, it will alleviate the pressure on many households if we as a Government can continue to put pressure on to ensure that mortgage interest rates continue to fall. Figures in April show that the average mortgage interest rate in this country was 3.7%. That has probably fallen since April, and that is very welcome. However, we are still below the EU average. Our interest rates are the fifth highest in Europe. Some countries in the EU are paying less than 2% on average in their mortgage interest rates, which is a significant difference.

There have been new entrants into the market in Ireland, and that is very welcome. Hopefully that has contributed to the downward pressure on interest rates.

It is a critically important area. I want to ensure that the Government continues to pressure. That is the reason I am raising this as a Topical Issue. While progress has been made, it would be very easy for us to take the foot off the pedal on this issue, but that is not what we should do.

While there is momentum on this issue and progress is going in the right direction, we must continue to ensure that we move to be more in line with EU averages. As I said, the banks are now in a very healthy position and back in a very profitable position. As we know, there is talk of executive salaries increasing significantly. While that type of narrative is out there, it is critically important that the end customer sees the best value for money possible in relation to banks. Of course, the mortgage payment is the most essential part of that for most customers across this country. I ask the Minister of State to please keep the focus on this issue. I look forward to his reply.

Deputy Jerry Buttimer

I thank Deputy McGrath for raising this very important issue. I am taking the matter on behalf of the Minister. As Deputy McGrath will know, the formulation and implementation of monetary policy is an independent matter for the European Central Bank, ECB. As it sought to combat excessive inflation, the ECB increased official interest rates on ten occasions, to 4.5%, in the period 2022 to 2023. However, since last summer, the ECB has reduced its official rates on eight occasions and, together with a change to the way it implements its monetary policy, this has had the effect of reducing its main official lending rate by 2.35 percentage points, to 2.15%.

Official interest rates influence the level of interest rates in the wider economy. However, other economic and business specific factors, such as the cost of funding, market conditions and contractual frameworks, will also influence the retail rates charged by individual lenders. Therefore, in a market economy, the determination of retail and business lending rates are commercial decisions for individual creditors. The Minister for Finance has no specific function or role in such decision-making matters by credit institutions or other mortgage entities, except in the case of most tracker mortgages, where the contractual terms of the mortgage provide that the interest rate will adjust in line with changes in the main ECB lending rate. The contractual provisions of other types of mortgages usually afford a greater degree of flexibility to the mortgage provider in the adjustment of interest rates. Accordingly, the determination of the initial interest rate and the contractual positions for the subsequent adjustment of the interest rate in non-tracker mortgages is a business and contractual matter for the individual lender. In the case of a fixed-rate mortgage, the contractual terms will provide that the interest rate will not adjust during the period the interest rate is fixed.

The latest publicly available data on retail mortgage interest rates, published last week by the Central Bank of Ireland, is for April 2025 and indicates that, overall, the average interest rate on new mortgages in Ireland was 3.72%. This represents a reduction of five basis points, from 3.77% in March, and is 52 basis points lower in annual terms and demonstrates a sustained reduction. The equivalent euro area average increased slightly last month to 3.34%. While acknowledging that the euro area average rate is somewhat lower than in Ireland, it is worth pointing out that the vast majority of new Irish mortgages, some 81%, are now at a fixed rate, up from 70% in April 2024. This will protect borrowers in the event of a rise in official and market interest rates, at least for the period the interest rate is fixed. In addition, the weighted average interest rate on a new fixed-rate mortgage agreement was 3.55% in April 2025, three basis points lower than in March this year and 58 basis points than in April 2024, which also makes for encouraging news for borrowers.

Regarding interest rates on an outstanding mortgage, Deputy McGrath may wish to note that at the end of March 2025 the average mortgage interest rate with banks was 3.5%. However, the national interest rate on mortgages with non-banks was higher, at 4%. In relation to variable mortgage rates, options are also available for some borrowers, in particular creditworthy variable rate mortgage borrowers who have now built up equity in their home, to look at alternative mortgage options to reduce their mortgage costs. In this context, new lenders have entered the market. This is providing more competition and, in turn, may provide better value to consumers. Other lenders are also enhancing their presence in the market, including one particular entity that is now moving to provide a fuller range of banking services to Irish financial consumers. Furthermore, established and relatively new mortgage lenders are increasing the range of their mortgage offerings and a wide range of mortgage types, with different types of interest rate product, LTV products and green mortgages now available.

While interest rates increased in the period 2022 to 2023 and were challenging for the mortgage market, the most recent reduction in mortgage rates in the past 12 months will help many borrowers. Despite the inflation rate fluctuations, the mortgage market has remained resilient over this period. New residential mortgage lending amounted to almost €12.6 billion in 2024, compared with €8.4 billion in 2020. I have a substantial further contribution to provide to Deputy McGrath and I am happy to give it to him later. I thank him for raising this matter. He is right that it is a very important issue we need to keep on top of.

Deputy Séamus McGrath

I thank the Minister of State. His reply very much focused on the climate of reducing interest rates we are now in. As I said in my initial remarks, this is very welcome and exactly why it is important to raise this point now. The Minister of State referred to the ECB reducing interest rates on eight occasions since last summer, and again this is all very welcome. The ECB covers the entire EU, though, so this begs the question as to why Ireland is still higher on average than the rest of the EU in terms of interest rates. As I said, we are the fifth highest, albeit with progress having been made. The Minister of State repeated the figures I gave in relation to the April figures. For new entrants into the mortgage market for new mortgages, 3.72% is our average, whereas the EU average is 3.34%. This is approximately 0.4 percentage points of a difference per month, and on a mortgage of €300,000 represents a difference of more than €100 per month in repayments. It is a significant difference for mortgage holders across this country.

Why are we outliers in Europe in relation to our mortgage interest rates? Despite the fact we have reduced the difference and the disparity, we need to continue this pressure. I accept the Minister does not have a direct role in this; of course I do. As we know, however, mortgage interest rates have been debated over and over again in this House and across this Parliament over many years. This pressure has been applied and has made a difference. I want to raise this matter now and it is timely to do so. While we are in a climate of reducing interest rates, we need to reduce the differential between Irish mortgage interest rates and EU mortgage interest rates. This is something in which the Government has a role to play indirectly in terms of highlighting the issues and reminding the banks of their responsibilities to Irish citizens to ensure they give the best possible value for money and that we are more in line with EU averages.

Deputy Jerry Buttimer

The Deputy is right to raise the matter. It is an issue vexing many of our neighbours and friends. The Government is acutely aware of the impact of the rising interest rate environment and the strain it has caused for some borrowers, and has responded with various initiatives to assist those affected. Following engagement with the then Minister for Finance in 2023, the mortgage industry put in place several measures to assist their customers experiencing difficulties to provide enhanced clarity on eligibility criteria for switching mortgages.

I emphasise that all regulated entities, including banks, other regulated mortgage lenders and loan owners and services, are required as a matter of law to follow the statutory Central Bank code of conduct, including the code of conduct on mortgage arrears and the consumer protection code. These codes are not voluntary and there can be no question of regulated loan owners not following them. The failure to do so can result in the Central Bank of Ireland using its range of powers to ensure adherence to codes, including its administrative sanctions, procedures or legal actions where appropriate.

In addition to the protections available to consumers under the financial legislation and regulatory framework, a consumer also has recourse to the Financial Services and Pensions Ombudsman, FSPO. If consumers are not satisfied with how a regulated firm is dealing with them in relation to the handling of their mortgage or believe a regulated firm is not following the requirements of the Central Bank codes and regulations under financial services law, they should make a complaint directly to the regulated firm. If consumers are still not satisfied with the response, then there is an option to go to the independent financial services office provided for in law to adjudicate on complaints consumers have with regulated financial services providers.

Again, recent Central Bank data indicates that the average interest rate on outstanding mortgages held by bank and non-bank regulated entities has declined over recent years. Deputy McGrath is right to raise this matter. We cannot be complacent. We have an obligation to ensure we advocate on behalf of and work for our constituents and people we know well. The decline in this regard is a welcome one and, from a general perspective, the ECB is reducing official interest rates and the Government expects all mortgage creditors to keep their lending rates under review. Where mortgage rates had in the past increased in line with ECB increases, they should now in the new interest rate environment also appropriately adjust downwards. The Central Bank will continue to liaise with regulated entities on this matter.

Cuireadh an Dáil ar fionraí ar 9.49 a.m. agus cuireadh tús leis arís ar 10 a.m.

Sitting suspended at 9.49 a.m. and resumed at 10 a.m.

Dáil Éireann debate - Wednesday, 25 Jun 2025