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

I will make some opening comments and then ask some questions.

I have a real concern about how long it has been since EUROSTAT's decision in March 2018. Notwithstanding the fact that both Departments have outlined the action taken to date, I am not hearing a coherent plan or strategy to get the approved housing bodies back off-balance sheet. While it may not be a problem today, our difficulty is if there is any change in macroeconomic circumstances. We have the ESRI speaking this morning in its bulletin about the possibility of a recession in the context of a no-deal Brexit. That immeidately has implications for capital expenditure by the Government and, therefore, AHBs to meet their targets. If everything goes well, we will be fine, albeit that will depend on the extent to which AHBs ramp up borrowing and spending. However, if something negative happens, as happened before, and capital dries up, AHBs will be sucked back to very low levels of delivery. We know that if there is a reduction in output, it takes a very long time, whether in the local government or AHB sector, to return to appropriate levels of output. Last year the approved housing sector delivered perhaps 2,000 units between builds and buys. It is a very important supply. My questions come in the context of frustration that we are almost two years in. Across the water in Britain it took about two years to get approved housing bodies off-balance sheet. I am not saying I like the way they did it. I have concerns about where its approved housing bodies have ended up, but still it has happened.

My questions are as follows. First, it is important that the committee get a sense of how much we are actually talking about. Therefore, I ask both Departments to consider whether they can answer these questions. What was the level of expenditure in the approved housing bodies sector across 2018 and what is the expected level of expenditure in 2019? What is the broad level of revenue in approved housing bodies, whether last year or expected this year? What was the level of borrowing last year and what will it be this year? Crucially - this may be a question that is more appropriate to the Department of Finance - how much fiscal space does all of it occupy in the context of the current budget? I do not have the level of expertise of officials in the Department of Finance, but I ask the question in the following context. Let us imagine the fiscal space in the context of where AHBs are on the balance sheet is currently €100 million or €200 million approximately. That might be tiny in the context of Government debt, but we are about to have a budget which the Government tells us will include a figure of only approximately €700 million in extra fiscal space. An extra €100 million or €200 million would be very significant in that context. As such, if the officials could provide clarity on that issue, it would be very helpful.

I am not hearing a great deal about meetings since December 2017 between the three crucial players, namely, the Department of Finance, the Department of Housing, Planning and Local Government and the approved housing bodies sector. Clearly, there has been engagement. I am not saying there has not been. However, if the amount of fiscal space occupied by the AHB sector is of the order of several hundred million euro, it is a big prize for the Government and, subsequently, the Departments to resolve the issue as quickly as possible, notwithstanding the fact that they are confident AHBs will continue to secure funding and meet targets in the next couple of years. Am I wrong in saying that? Have there been meetings held this year? The Department of Finance stated there were meetings with the Department of Housing, Planning and Local Government in January and June last year and May with the AHB sector. Are there other levels of engagement?

What I am really interested in hearing about is the plan. One of my major concerns is that EUROSTAT added a significant additional concern in its conclusions on the CSO's determination. EUROSTAT added a much more profound commentary on what it believed was the non-market nature of the AHB sector in terms of both its principal aims and its rent setting approach, which is to say how rents react or, in EUROSTAT's view, do not react to market movements. Crucial is the issue of how all of that influences or does not influence the investment decisions of AHBs on supply. If one were to meet the requirements of EUROSTAT to get AHBs off-balance sheet, the core mission of AHBs - to be non-market operators and not-for-profit providers of subsidised housing - would have to change. One would then be on that pathway to where British AHBs have gone. In essense, they have become sub-market operators. My concern is that I do not see a plan and do not know how any plan would ensure the AHB sector would continue to do what it now does very well, namely, provide non-market housing at subsidised rates for people who would not be able to afford even sub-market housing, as is emerging in the United Kingdom.