Mr. Seamus McCarthy:

The 2017 appropriation accounts for Vote 34 - Housing, Planning and Local Government records gross expenditure of just over €2 billion in 2017. As the figure indicates, housing-related expenditure accounted for 63% of that expenditure. The Housing and Sustainable Communities Agency, usually referred to simply as the Housing Agency, operates under the aegis of the Department of Housing, Planning and Local Government. The agency’s role is to provide a range of support services to assist the Department, local authorities and approved housing bodies in the discharge of their functions. This includes implementation by the agency of the pyrite remediation scheme.

The Housing Agency is mainly funded through State grants. Its income in 2017 was just over €34 million. Expenditure in the year was €33.1 million, of which payments under the pyrite remediation scheme accounted for €25.3 million. The agency has two roles relevant to housing provision that might not be immediately obvious from the principal financial statements. First, in 2016 and 2017, the agency received capital grant funding of over €70 million from the Department which it used to establish a revolving fund for social housing acquisition. Using the fund’s resources, the Housing Agency acts as an intermediary, purchasing targeted suitable residential properties from banks, investors and other owners. The properties are then sold on to the relevant approved housing bodies, which are not-for-profit organisations that provide and manage housing for people with a housing need. Second, at end-2017, the agency held 243 ha of residential development land in 72 locations. This land was transferred to the agency from local authorities under the land aggregation scheme that operated between 2010 and 2013. The agency does not have the authority to dispose of or develop the land without ministerial sanction, and carries the land at a token value in the financial statements.

I turn now to chapter 10 on funding and oversight of approved housing bodies. Both local authorities and approved housing bodies are outside my audit remit. As Members are aware, the local authorities are subject to audit annually by the Local Government Audit Service. I felt it might be useful to examine how the Department gains assurance about the effectiveness of the use of the resources being channelled through the local authorities to the approved housing bodies. That examination resulted in the chapter that is before the committee today.

The report sets the context for operation of the approved housing bodies by outlining the range of schemes used to provide social housing or to support households in rental accommodation, and the associated costs in 2017. When we tried to match the scheme expenditure with output data, we found the Department does not currently report outputs on a scheme-by-scheme basis. We also found that the Department does not report the size of the social housing stock. It has figures for local authority stocks but not for social housing held by the approved housing bodies.

In 2017, the Department provided capital funding of just over €180 million to the approved housing bodies through four schemes. The schemes involve varying degrees of complexity in terms of flow of funds between the Department, the local authorities, the Housing Finance Agency and the housing bodies. We have tried to summarise those fund flows in diagrams in the chapter. The key message from this analysis is that the bulk of the capital funding for the housing bodies' stock of properties comes from public sources.

We found there is currently no statutory regulation of the housing bodies. An interim regulation office was set up within the Housing Agency which launched a voluntary regulation code for such bodies in July 2013. By mid-2018, 246 bodies had signed up to that code, which represents less than half of the housing bodies registered with the Department. However, the Department has pointed out that the bodies that have signed up for the voluntary code account for an estimated 95% of the housing stock of the sector.

The chapter recommended introducing a process for identifying inactive housing bodies so that they do not retain approved status indefinitely. The Department has committed to tidying up the register prior to the introduction of statutory regulation.

In December 2015, the Local Government Audit Service published a report on the oversight role of local authorities in the provision of social housing by approved housing bodies. That report recommended that a review and reconciliation of all mortgages charged on housing body properties should be carried out and that a comprehensive management information system should be put in place in local authorities to record details of properties and their tenants. As we were completing the chapter in September 2018, the Local Government Audit Service was reviewing the implementation of its recommendations.

The chapter also makes a recommendation aimed to ensure that the standard requirements in regard to the management of Exchequer grants are met in regard to the oversight of public funds provided to approved housing bodies. The Department is undertaking a review of all circulars relating to approved housing body activity.