Mr. John Hannigan:

CALF and CREL being one fund would be eminently sensible. What we are seeing and required to provide across most local authorities are mixed tenure schemes. At this time we have to make two separate applications to two separate elements of the one Department to get an answer. You are not guaranteed they will get the same answer. Having one approach for the delivery of social and affordable housing would be excellent.

On whether that will fix the current system, it will equalise the system and will get to the same problem, whatever it might be. That is one thing that can be guaranteed. We have different problems with the two different schemes. With CREL, the risk is on the cost of finance as well as the cost of delivery. The cost of finance now is a major issue. Regarding CALF and payment and availability, P and A, side of it, the issue is that the cost of delivery overall is a significant element. The variability between local authorities determining which element of CALF you get or how much CALF versus how much P and A you might get also means you get a different element of delivery. Having one mechanism that covers the lot would be fantastically helpful. I do not know if it would resolve all of the issues but it would certainly move towards that resolution.

I will ask my colleague to speak about commencements in a second. The committee has heard about where we are with the CREL review. The decoupling issue is significant. It is going to cause some difficulty as regards valuations for the future. At the moment in Ireland, there is one valuation methodology, which is the red book methodology. There are different variations within it but it is effectively one methodology. Within that, there is no opportunity to say something is social housing versus private housing. We have the same valuation process based on market rents. If there is a decoupling from market rents and cost is used, the cost will be over the level of the value in a large proportion of schemes, particularly in higher cost areas. The difficulty with that is, when our balance sheet is reviewed, our auditors say we are overvalued and we have to write down the value of that property in our balance sheet, which causes concerns for raising private finance because people start to see that the book is overvalued.