Mr. Seamus McCarthy:

I resume my opening statement at chapter 11. Departments are obliged to demonstrate that they have used funding provided by or under the authority of Dáil Éireann for the purposes intended and to good effect. This requires them to have relevant and reliable measures of their performance that are linked to identified lines of funding. The annual appropriation accounts present details of the amounts made available by the Dáil in the Estimates for each programme and how much was spent. Information about what has been achieved with that spending is more difficult to find and to understand. For this report, I wanted to look at the €2.4 billion housing programme, to assess the kind of performance information that is available in social housing delivery. The main objective of the assessment was to establish if the performance measures used and published by the Department provide a complete and accurate account of what is being achieved by the spending in a timely way.

At the outset, I want to acknowledge that monitoring and reporting on the performance of the various public bodies involved in social housing support is a complex process. Authorities in many jurisdictions are working to improve their own performance measurement systems in this area and those systems evolve over time. As part of the annual Estimates process, the Department reports on a range of key housing-related output and activity measures. The data presented indicate that the Department has achieved or substantially achieved most of the performance targets it has set. These are predominantly output targets that measure aspects of the programme-funded activity. However, we found that the measures used are not well aligned with the nature of the activity that is funded. Some substantial funding lines in the Vote have no output or activity measures associated with them. Some measures appear to relate to a number of funding lines, so it is difficult to see what contribution each spending channel is making. A number of the measures and targets relate to incremental values rather than to the full scale of support provided through the funding stream. For example, one measure relates to the number of new housing assistance payment, HAP, tenancies put in place in the year. A better measure relating to the annual spend on HAP would be the average weekly number of HAP tenancies supported in the year. We found that none of the measures focus on economy or efficiency aspects of performance. There was more focus on target outputs than on planned outcomes for households in need of support.

The report makes a number of recommendations for improvement in the Department’s performance reporting. For example, we propose that they could develop new outcome and effectiveness metrics; they could express targets in percentage terms to facilitate benchmarking; and they could examine the potential to introduce qualitative indicators. The report also highlights some performance measurement issues, with implications across all votes.

Turning to chapter 12, progress under the land aggregation scheme, LAGS, the scheme was established in 2010 to provide assistance to local authorities with land purchase loans that were maturing. The local authorities had bought the land for social and affordable housing purposes but were not in a position to go ahead with housing development. In return for LAGS funding paid from the Vote, local authorities were required to transfer the related land to a special purpose body called Housing and Sustainable Communities Ltd., known as the Housing Agency. No new applications for site transfers under the scheme were accepted after December 2013.

The position at September 2020 was that 68 of the 73 sites approved under the LAGS had been fully transferred by local authorities and registered in the ownership of the Housing Agency. For the remaining five sites, beneficial ownership had transferred to the agency but title registration had not yet been completed. In a 2018 strategic development plan, the Housing Agency categorised 36 of the LAGS sites as ready for immediate development. Those sites were assessed as having the potential to accommodate 3,370 housing units. At the time the report was signed off, 98 social housing units had been completed on the sites and a further 792 units were at various stages of development.

The 2018 development plan stated that the remaining 37 sites were not suitable for immediate development for housing.

Chapter 13 deals with the pyrite remediation scheme. As members may know, pyrite is a common mineral found in certain types of rock that can swell and lead to structural problems in buildings. Towards the end of the development boom over a decade ago, pyrite-related damage emerged as a problem for homeowners. The majority of the identified cases were located in two local authority areas: Fingal and Meath. In 2013, the Pyrite Resolution Board was established to direct and oversee the implementation of a pyrite remediation scheme. The Housing Agency is responsible for the administration of the scheme, on behalf of the board.

Initial estimates were that over 10,000 homes might be in need of expensive repairs. The outturn has been significantly less. Up to the end of 2019, 2,110 applications had been approved for inclusion in the scheme and a further 301 were at the application or assessment stage. By the end of 2019, remediation works were completed on 1,890 properties and the scheme had cost the Exchequer nearly €126 million. Costs per home remediated have averaged around €65,000. Future projections up to 2023 indicate the scheme will cost approximately €210 million and will remediate approximately 3,140 dwellings.

Under the Act, the board may recover from any party with a liability, and the capacity to pay, all or part of the costs of remediating damaged dwellings. Costs of the scheme recouped from third parties to the end of 2019 amounted to just under €1.8 million, representing 1.4% of total costs.

Support to the value of a further €1.8 million had been received from HomeBond, which had provided structural defect guarantees or warranties for an estimated 74% of the eligible scheme applications. This support was in the form of technical and project management services.

The board estimated that by the end of 2019, it had spent just over €887,000 on remediating non-pyrite related defects that it could potentially claim from HomeBond. Just 6% of that amount had been recovered from the company. The report recommended that the board and the Housing Agency put in place a more robust process to quantify and recover the cost of remediating such non-pyrite related defects.