Dr. Donal McManus:

I thank the Chair and members for inviting the Irish Council for Social Housing, ICSH, to engage with the committee on what is probably the most significant issue affecting the sector in recent years. I am CEO of the ICSH. Accompanying me are Ms Karen Murphy, director of policy, and Mr. Gene Clayton, who is chair of the ICSH housing development and supply working group, chair of Housing Europe's internal market group and CEO of the Iveagh Trust. We have included a number of papers on the issue which the ICSH prepared last year and since the recent CSO recommendation last December.

The ICSH is the national federation of housing associations, with over 250 members that collectively own and manage over 32,000 homes at affordable rents for families, older people, people with disabilities, the homeless and single people. The ICSH is part of Housing Europe, the EU social housing federation, which has over 22 million homes in the social housing sector including those owned and managed by housing associations throughout Europe. One common factor to all these jurisdictions is the presence of support from the state, direct or indirect, to house people in the social housing sector, including housing associations or approved housing bodies as they are known in Ireland. With no state support, it is likely that many households in the social housing sector would not be housed. We are not aware that EUROSTAT has directed other EU member states to examine classification of housing associations operating in the social housing sector.

Over the past 15 years, the approved housing body sector in Ireland has increased from just under 15,000 homes in management to over 32,000 homes in ownership and management. Members of the ICSH range from the larger tier 3 bodies, which manage from over 300 to 5,000 homes located throughout the country with significant plans and programmes for delivery, to local and regional tier 1 and tier 2 approved housing bodies, which often provide housing and related support services to vulnerable groups in local communities, responding to specific local housing need and support services. Therefore, there is a broad range of approved housing bodies that work in partnership with local authorities and the private sector in meeting housing need.

The boards of approved housing bodies decide on their plans in terms of delivery and output. The highest output was previously achieved in 2009 when the sector provided 2,012 homes. However, with the changing funding environment since then and the introduction of loan finance as a new delivery mechanism, approved housing bodies provided an estimated 2,000 plus homes in 2017 for people and families on the waiting list and in need of housing. These homes were delivered by means of new construction, acquisition and some leasing. It is likely that up to half of this delivery will have been in the form of new construction. With additional vacancies that arise in the sector throughout the year, this will bring the total number of households that the sector accommodates into the region of 3,000 for 2017.

The Government's targets for delivery by AHBs indicate that up to one third of social rented homes are to be delivered by 2021 under Rebuilding Ireland. A number of AHBs are also actively engaged to deliver affordable and cost rental housing. Those approved housing bodies that have been using loan finance in recent years have significantly altered their organisational structure to reflect the need for finance and development expertise and have had to develop new relationships with the private sector.

The recommendation by the CSO to EUROSTAT to reclassify tier 3 bodies has caused initial concern within the sector in the context of a number of areas. These include: the Government's commitment to support existing AHB projects in the pipeline and those under contract; meeting Government social housing targets; the implications and impact for reclassified AHBs on their ability to borrow and any new consent that may be required to borrow and function; and the proposed Bill on AHB regulation.

If EUROSTAT confirms reclassification of tier 3 bodies, as well as tier 1 and tier 2 bodies subsequently, it is important that there be as much clarity as possible on the issues that influenced such bodies being reclassified. Although the CSO pointed to three areas that influenced its recommendation to EUROSTAT, further clarity is still required from EUROSTAT on a number of issues. Such clarity is essential to ensure that there is no moving of the goalposts over the coming years, with additional issues having to be addressed. This has already been done by the CSO as recently as 2014, when it indicated that the balance of control rests with AHBs and debt financing transfers all risk to the AHB.

In the event of EUROSTAT confirming reclassification, we need a robust process that involves cross-departmental support and agreement, as well as input from the sector directly affected, to address policy and operational issues that may need amending. The ICSH and its members have been meeting on a regular basis and would welcome the opportunity to input into this process and build on the engagement we have already had with the Department of Housing, Planning and Local Government and the Minister. However, there needs to be a common agreed position by all of Government on the overall strategic objective of reclassification. The ICSH supports the position of seeking to return AHBs to an off-balance sheet status. Such agreement across Government will then inform at an operational level what is required to effect changes.

Even focusing on the three areas the CSO identified, we believe that all these issues can be resolved. That would allow to sector to further develop as a non-profit private institution and not as part of the local government sub-sector. We are committed to working with all the key stakeholders to ensure there is no disruption to housing delivery, which would create uncertainty for AHBs, tenants and funders. We hope all other stakeholders would have the same commitment.

I thank the Chair and look forward to taking any questions that arise.