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

I will pick up on Deputy McAuliffe's point because this is an important discussion. Dublin city will have a problem both on affordable cost rental and affordable purchase under the affordable housing fund. Deputy McAuliffe outlined price ranges and if we go to the suburbs or the project mentioned by Mr. Doyle earlier, they are generally out of inner urban Dublin sites in various ways.

That is how you get those. If you look at the tender prices Dublin City Council has been receiving for its social housing projects of schemes of more than 50 or 100 units in Dublin city, you would be lucky to get €400,000. In fact they are coming in at €420,000 or €450,000. Those two sites mentioned will be very interesting to watch because if they are not coming in below €400,000 then we have a real challenge. Likewise with cost rental. This is more relevant to the housing bodies. Currently we cannot deliver cost rental anywhere in urban Dublin because the all-in development cost of those apartments is so high. Even with the cost rental equity loan we cannot do it. It is currently not possible, being subject to ongoing negotiations between an approved housing body and the Department and Dublin City Council for O'Devaney Gardens. The real issue is why in the past couple of years before cost inflation was a matter of discussion, the tender prices that AHBs and Dublin City Council within the canals were getting were so much out of kilter with areas elsewhere, albeit further out from the canals and closer to the suburbs. If we cannot get those hard costs inside or close to the canals, not just to €300,000 but down to the €270,000s, €260,000s or €250,000s we will not be delivering anything that is affordable for people either to rent or purchase. That is an important question.

I have a couple of quick comments and then some final questions. On Home Building Finance Ireland, HBFI, I have spoken to many small and medium-sized builders who say not only can they not get access to loan finance but even when they get offers, it is too expensive. It has shifted its approach to financing large institutional investors rather than the small and medium-sized builders for which that fund was designed. Not only should the Irish Council for Social Housing, ICSH circulate information to members, I think members should be part of that growing lobby of people in industry saying that HBFI should have added value of the small and medium-sized builder sector and until it does that, it is not doing its original mission. It is way off course. I encourage the committee to do that. On competition, I do not think any of us is concerned about competition between the approved housing bodies and the local authorities for social housing because the relationships are so well established. Some of us may be critical of some local authorities we think find it easier to give more work to the AHBs but that is a separate battle. The concern we have, and Mr. Doyle alluded to it, is the increased competition that will come from Project Tosaigh particularly when the pressure is on to deliver targets, and Cost Rental Equity Loan, CREL. That is the difficulty. It would be much better if there was a single State agency in each geographical area that everything was filtered through, without being overly bureaucratic. As the pressure mounts to meet the targets particularly in respect of turnkeys - they are still a large part of delivery, I am not complaining about that - we could get competition albeit from the cost rental side because the LDA will be able to spend more per unit than ICSH members will be; that will be a problem. If we want the ICSH sector to get into mixed tender developments with social and affordable rental and maybe some special needs in there as well, it will want some of those bigger schemes and the LDA can outbid. I am not asking for an undiplomatic response but I am just putting that on record.

In regard to the speciality housing, I am not suggesting that for example the model the Peter McVerry Trust has at the moment, that kind of pepper-potting particularly of ICSH Housing First, is a problem. It is not and it works very well. However, in speciality housing, as we get to larger-scale developments we need to have greater mixture. That means a mixture not just of what traditionally was called special needs housing. That is going to require a single point of approval in the Department to make ICSH members' lives really easy or for them to be able to sit in alongside a local authority or another AHB to manage it. Currently I understand that is really tricky. We have to tackle that.

My questions are to Ms Hegarty whom I also invite to come back to the earlier question that was asked. I think her critique of the speculative level of the large developers in our big urban centres is fair. I do not think it applies to the same extent outside of Dublin and inner city Cork. Has she any observations on that? In regard to Mr. Doyle and Ms Donaghy, I hear Mr. Doyle's remarks on VAT but in some senses VAT in the public sector is circular. You have to charge it but you get repaid by the State for it and it repays itself for it. Would it really make that much difference? If I thought it would, I would be interested in it, but it is a circular payment. How does Mr. Doyle think that would make life easier for the non-profit sector? That is the first question. On the payment and availability agreements, there was a review. Do we know where the review was done? Has there been any engagement with the sector or are we still waiting? As I have said at this committee before, my view is it should be from cost recovery. It should never be pegged to market rents. It costs X. You need X plus management and maintenance, plus sinking fund. That is the payment and availability. All I am saying is that its full cost recovery should be the model, whatever it is. Is there any update on the review?

Finally, Ms Donaghy mentioned two acronyms. We hate acronyms in this committee so we will ask her to explain them, as they sounded very interesting: PVC2000 and GCCC I think she mentioned in terms of different contract types. If she can either explain them to me or give some information to the committee I would be interested to hear. To come back to Ms Hegarty, it is the same question. I refer to that contractual complexity of which she talked, and more sophisticated contracts. Obviously one of the issues that give rise to nervousness when people like me hear that is how to prevent cost overruns. The one good thing about the incredibly over-bureaucratic management of costs in the social housing sector is we do not get overruns. There are cost ceilings above which you cannot go. I am open to making our contracts more flexible so long as we do not get into the difficulties that other public sector bodies have with albeit more complex projects in terms of egregious cost overruns. How do we manage that tension?