Mr. John McCarthy:

Chairman and members, I am pleased to be here this morning, as Accounting Officer, to assist the committee in its examination of Vote 34, insofar as it relates to housing supply issues, and its consideration of chapter 10 of the Comptroller and Auditor General’s annual report 2017, concerning the funding and oversight of approved housing bodies, AHBs.

I am joined by a number of colleagues who the Chairman has already introduced. As requested, I have provided some advance briefing on housing expenditure and delivery, as well as a range of notes on specific issues of interest that had been raised by the committee, so I will keep these opening comments brief.

In terms of Vote 34, the Department’s gross voted expenditure on housing programmes, as set out in the subheads of the appropriation account before the committee today, totalled some €1.3 billion in 2017. This includes an additional €100 million that was provided to the local authority housing and regeneration subheads by way of Supplementary Estimate towards the end of 2017, to meet costs arising from the level of housing-related activity then under way across the country. A further €98 million was also made available in 2017 from surplus local property tax, LPT, receipts to fund housing programmes, bringing the overall total resourcing for the Department’s housing programmes to over €1.4 billion in 2017.

The implementation of the Government’s Rebuilding Ireland action plan is the core focus of our daily work in the Department and, indeed, across central and local government, as we strive to make meaningful, tangible and sustainable progress towards a better housing landscape. I and my colleagues in the Department, together with our Ministers, are firmly committed to achieving the maximum outputs possible from State investment, both current and capital, while ensuring that close attention is paid to delivering value for money and tangible housing outcomes for citizens. We are committed to regular review of policy and delivery and work very closely with colleagues in the Department of Public Expenditure and Reform in this regard.

Rebuilding Ireland is a six year action plan, with a very firm emphasis on delivery across the full range of housing mechanisms. All stakeholders agree that accelerating the delivery of new build activity is absolutely critical. At the outset of the programme, however, we knew that establishing viable pipelines and building local authority and AHB capacity to expand new build delivery would take time, taking particular account of the significant extent to which house building, both in the general market and of social housing, had contracted. Therefore, in parallel with driving increased capacity building, we focused also on harnessing the potential of the available housing stock.

In summary, Rebuilding Ireland seeks to achieve the delivery of some 50,000 additional social housing homes through build, acquisition and leasing schemes, out to 2021. A further 87,000 households will have their needs met under the housing assistance payment, HAP, and rental accommodation, RAS, schemes. The relative contributions of individual programmes to overall delivery is to shift significantly over the course of the six years, taking particular account of the substantial increase in the delivery of new build social housing homes as the programme progresses.

During 2017, significant progress was made to deliver on the commitments in Rebuilding Ireland. In overall terms, housing supports were delivered to some 25,900 households last year, through the range of social housing measures in Rebuilding Ireland, which were significantly ahead of the target of 21,050. Within this, almost 2,300 new build social housing homes were delivered, more than three times the level in the previous year. In addition, wider housing supply continued to grow, with the number of new homes becoming available for use reaching 18,222 in 2017, an increase of 29% on 2016.

Significant progress was made in 2017 in advancing many social housing projects, through the range of delivery mechanisms and programmes. By the end of last year, a substantial construction pipeline was in place, which will result in further increases in the number of new social housing homes being built this year and in the coming years.

This year is a critical year for delivery. Pipelines established over the last two years, in particular, are yielding fruit, with the number of private and social homes on-site and completions increasing quarter on quarter. While this is welcome, there remains very significant further progress to be made right through to the end of the Rebuilding Ireland action plan. There is absolutely no room for complacency and we continue to actively monitor, refocus as necessary and mobilise the range of players involved in order to achieve our ambitions in what is a very challenging landscape.

Nowhere is this more evident than with regard to homelessness. It is essential that supply continues to increase if we are to address both the backlog of housing demand in the system, and also new demand arising. While Rebuilding Ireland is heavily focused on this, in the interim we must, and are, continuing to work to provide the most appropriate accommodation possible for those of our citizens who find themselves in immediate housing need. The programme of family hubs is intended to provide more family-friendly transition accommodation, and the implementation of the HAP placefinder service will further assist families in various types of emergency accommodation to transition into more long-term housing solutions. One of our key areas of focus is on prevention and avoiding the use of emergency accommodation wherever possible by matching families and individuals in need with appropriate accommodation.

While the numbers presenting to homeless services continue to be very challenging, the numbers for whom pathways to more sustainable housing solutions are secured are also increasing significantly. A record 4,729 adults exited homelessness into an independent tenancy in 2017, with a further 2,332 adults in the first 6 months of this year.

Overall, in the first two and a half years of Rebuilding Ireland up to the end of the second quarter of 2018, housing solutions have been delivered for over 57,000 households across all delivery streams. The impact of this delivery can be seen in the year on year reduction in local authority housing waiting lists.

In addition to highlighting outputs, it is critical to mention the pipelines for future delivery, particularly new build homes, that are now being put in place. The latest social housing construction status report published on the Department’s website provides significant detail on projects at various stages of advancement across a range of delivery schemes led by local authorities and AHBs as at the end of the second quarter of this year. Overall, we can see a substantial increase in the scale of the build programme since end 2016, when it included over 500 projects, delivering more than 8,400 homes. By end of the second quarter of 2018, the programme had virtually doubled in size to over 1,060 projects and 16,350 homes. Some 3,518 of these homes have already been delivered, 4,602 more were on site and under construction, and a further 1,577 were at the final pre-construction stage, with the remainder progressing through the various stages of planning, procurement and design.

In the second quarter of 2018 alone, projects delivering almost 1,100 homes went on site, an increase of 27% on the previous quarter and an increase of 239% on the second quarter in 2017.

Table 1, which I have circulated in the briefing paper, sets out for the information of the committee the key Rebuilding Ireland targets for the period 2016 to 2021 and details the progress that has been made to mid-2018. Delivering on this scale, and committing to doing even more, is crucially dependent on effective cross-organisational co-operation. Within the policy and legislative decisions made at political level, the Department provides the funding streams to support delivery. However, on the ground activity and delivery can only be accelerated by local authorities, the Housing Agency and AHBs working in partnership.

Turning to chapter 10, as I have highlighted, AHBs play an important role in our work to address housing need. Indeed in terms of social housing delivery, it is expected that AHBs will deliver up to one third of all build, acquired and leased social housing homes out to 2021. Given that the sector has been mandated to deliver on this scale, it is imperative that appropriate structures and oversight mechanisms are in place. Chapter 10 of the Comptroller and Auditor General’s annual report provides an account of the range of the housing programmes generally, including detail on AHB delivery and the associated funding and oversight arrangements for local authorities to deliver social housing supports in partnership with AHBs. Funding under these programmes is provided by

my Department directly to local authorities, which in turn advance the funding to AHBs, as appropriate, with robust arrangements and agreements in place in order to ensure value for money and quality delivery.

A number of years ago, the Department recognised the need to put in place a more comprehensive regulatory regime for the AHB sector, beyond that which had been put in place historically under the Housing (Miscellaneous Provisions) Act 1992. Rather than wait for the development of legislative proposals for this purpose, in parallel, a voluntary regulation code, entitled, Building for the Future - A Voluntary Regulation Code for Approved Housing Bodies in Ireland, was put in place as an interim step. The implementation of the code is overseen by the interim regulation committee, IRC, based in the Housing Agency. Since the code was put in place, any AHB applying for housing funding from the Department and local authorities must furnish proof of compliance with the code. This interim arrangement will be built on by a new statutory regime, which will include placing the code on a statutory basis. The Department is at an advanced stage in preparing the necessary legislation under which the regulator will be responsible for approving and registering housing bodies, setting standards for the sector and ensuring AHB compliance with the standards, and will be provided with the necessary powers to fulfil that role. Subject to Government approval, it is expected that the Bill will be published in the coming weeks.

In these opening remarks, I have touched on the important work of my Department, local authorities, the AHBs and other partner bodies to address the housing challenges that we face and to support our most vulnerable citizens, while managing long-term programmes to create a clear pathway to a more stable and sustainable housing sector. I and my colleagues will be happy to respond to questions or issues that emerge in the course of the committee’s work today. Thank you, Chairman.