Oireachtas Joint and Select Committees

Wednesday, 14 November 2018

Joint Oireachtas Committee on Housing, Planning and Local Government

Financing of Social Housing: Discussion

9:00 am

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

I apologise but I have to be in the Chamber at 10.30 a.m., so if there is not time to get all of the answers I will read them in the Official Report.

Ms Bryce said there might be some efficiencies by the time we get to bundle 3. Does she have any idea what those efficiencies are? I presume by efficiencies she means a reduction in timeline.

I do not think it is fair to say that there is nothing the NTMA can do about planning or procurement. For example, Part 8 planning permissions are now the shortest planning permissions one will get following the legislative changes made when the Tánaiste, Deputy Coveney, was Minister for Housing, Planning and Local Government. Many Deputies and councillors work very hard to ensure Part 8s get through. That is the case for even the very controversial Part 8s, such as the PPPs, which Deputy Ellis and I dealt with in our constituencies. Even though we did not like the funding model, we still did everything we could to make sure they got through because we wanted to make sure the units were brought into stock. Planning is not the problem here.

In terms of procurement, there is nothing to stop the Government allowing local authorities having regional framework agreements for build in the same way as they have for maintenance. One might have to stagger those and have one framework agreement for builds below 20 units or below 50 units, for example, but that would significantly speed up the delivery of individual projects. There would be a big tendering process at the start, every three years, but then one would not have to go out to tender for every single project. If it makes sense to do that, as I think it does for maintenance contractors, it has to be within the remit of the local authorities and the NTMA to do that. I think we could do an awful lot of speeding up in terms of procurement.

It concerns me what was said about good schemes. In fact, all of the schemes I am looking at currently, irrespective of the delivery mechanism are of exceptionally high quality. We have social housing developments that have been delivered through the more standard model that are exceptionally high so I do not understand how one can say that by involving people in the way a PPP does, that it delivers better quality schemes. In fact, our experience from the collapse of previous PPPs suggests otherwise.

On benchmarking, my question is whether we are comparing a fictional cost of the full cost recovery of a local authority to deliver the units and maintain them over 25 years with the private sector bids or are we comparing the real world actual money a local authority gets for that, because they are two very different things. Ms Myler's point is very well made. I would like to believe Ms Bryce but I will have to wait to see the figures. Even if she were my sister I would be saying the same thing. I want to see the figures. I cannot understand the approach, given the additional cost factors of the private sector, and that private developers will want full cost recovery plus a premium, and that the State does not get full cost recovery at all, let alone a premium.

The National Development Finance Agency, NDFA, says it comes in below the benchmark but I suspect the benchmark does not reflect the reality of what local authorities get for building and maintenance over a 25-year period. Any reassurance on that would be wonderful. I am delighted the public sector benchmark is to be published. It would be great if Ms Bryce could tell us when it will be published. Our problem is that we are scrutinising the cost after the fact. What we have seen in the Comptroller and Auditor General's report and in a similar report on the use of public private partnerships for major infrastructural projects across the European Union, which was published earlier this year, is that when we finally get to scrutinise the cost after the fact, there are many additional costs which show that the PPP was not, in fact, more cost-effective. With regard to the point on competition and bidding, that happens with every social housing project. Given that every social housing project goes out to a competitive tendering process, I do not see how that works any differently.

A house is not a school. This is one of the big things shown by the British experience. People live in houses and them far more, which means depreciation, damage, repair and maintenance have a greater effect than they would on a school or water treatment plant. Therefore, the possibility of maintenance costs fluctuating over the 25 years is far greater. We also know that we have other problems with which we have to deal in some of our housing estates. It is not that the experience of PPPs in other sectors is not relevant; of course it is. I would hope, however, that Ms Bryce will accept that the nature of housing and the purposes for which it is used results in greater cost variations and risk factors which make a straight comparison with a school or water treatment plant difficult.

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