Brian Stanley (Laois-Offaly, Sinn Fein) | Oireachtas source

First, I welcome the presentation by the Minister of State, Deputy O'Dowd, as well as by the staff of his Department and that of the Minister of State, Deputy Jan O'Sullivan. On the housing budget, while the Minister of State signalled that 300 new units would be brought on this year, there are small counties in which 300 units would only make a small dent in their housing waiting lists. Obviously, many eggs are being put into baskets of the rental accommodation scheme, RAS, the social leasing scheme and the buy-out. Has the Department of the Environment, Community and Local Government undertaken long-term projections on the cost thereof? The Department has bought into leasing for up to ten years from developers and private landlords. While this may be fair enough as a short-term measure, the Department is doing it as a long-term measure at a cost of €7,000 to €9,000 per unit per annum. This adds up to a substantial cost over a ten-year period when figures of between €70,000 and €90,000 are incurred. Moreover, as the aforementioned house must be released back to its owner in pristine condition after the lease has expired, a substantial financial time bomb has been written into the contracts in the form of the bill incurred to so do. In addition, the State and local government will miss out on ten years of rent that otherwise would be going to a local authority. Furthermore, in the case of a house built by a local authority with funding from the Department, the State and the local authority will possess an asset at the end of the five-year tenure period. One also should take into account the fact that the family involved has a home whereas in the case of long-term leasing or the RAS, the owner sometimes decides to sell within a couple of years and the local authority must then find another house for the tenant.

I refer to when the Department draws up the balance sheet in this regard, in particular if one considers the price of purchasing or building at present. I acknowledge the main part of the Minister of State's response will be the Government cannot do this because it does not have the cash and the capital is not available. While this is accepted, there are ways of leveraging the capital, particularly for projects like this when an asset is involved and when rental income will be forthcoming. Incidentally, when the sub-committee moves on to the next subject for discussion, namely, water, the Minister of State will be in a position to state how this is being done because the Minister of State, Deputy O'Dowd, will suggest that once a meter has been installed in a house, an income will be forthcoming. Similarly, once one builds a house one will have an income therefrom.

I will conclude by making the point that not unusually, one local authority is bringing in €3.5 million in rent. The good news is the cost to the local authority of maintenance of the houses concerned is between €600,000 and €650,000 and consequently, this activity nets almost €3 million for the local authority. What if that €3 million was used to pay off a capital sum? My question is whether the departmental officials, many of whom are present today, have undertaken a long or even a medium-term value for money audit on this measure? It is of huge concern and the dogs on the street are barking about it. While people are discussing this issue, I note that when members have tried to raise this issue, they do not appear to get anywhere with it. I acknowledge the Minister of State is anxious to provide social housing and is anxious to try to squeeze what she can out of the resources available to her. However, I believe that when the present Administration took office, this measure already had been put in place by the previous Government. While the senior civil servants obviously will go along with it, Deputy O'Dowd and Deputy Jan O'Sullivan are the two Ministers of State with the latter having responsibility for housing. My point is that members today have been provided with Revised Estimates that show precisely what will happen and the medium to long-term consequences must be worked through.