Oireachtas Joint and Select Committees
Thursday, 8 March 2018
Public Accounts Committee
Vote 34: Housing, Planning, Community and Local Government
9:00 am
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
We are dealing with Vote 34 - Department of Housing, Planning, Community and Local Government. We are again joined by Mr. John McCarthy, Secretary General, and officials from his Department, namely, Ms Maria Graham, Ms Mary Hurley, Mr. David Walsh, Mr. Maurice Coughlan, Ms Nina Murray, Ms Theresa Donohue, Ms Janet Jacobs. We are joined from the Department of Public Expenditure and Reform by Ms Patricia Coleman.
Because of the late hour and that the opening statements submitted by the Comptroller and Auditor General and Mr. McCarthy have been circulated, we will take them as read, note and publish them. We will proceed to the first speaker, Deputy Alan Farrell who will be followed by Deputies Peter Burke, Jonathan O'Brien and Catherine Murphy in that order.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I thank the witnesses for providing their opening statements in advance. I thank Mr. Seamus McCarthy and his team for the clear audit and Mr. John McCarthy for the work his Department has done in ensuring its books will pass muster.
I note with thanks the work of the Department and the local authorities during the recent eventful weather event. Their efforts were most appreciated.
In the light of the clear audit, I have only a few questions to ask. Will the Comptroller and Auditor General elaborate on his comment that the usefulness of the programme analysis was compromised by the existence of and separate accounting for the local government fund. The issue arises from the multiple sources of funding and accounts maintained. I have no idea to what the Comptroller and Auditor General was referring when he noted a consolidation account in the Department of Employment Affairs and Social Protection. Will he provide some more detail on that point?
Mr. Seamus McCarthy:
The suggestion I was making was that because the local government fund was so big, relative to the Vote, looking at effectively the business of the Department through the lens of the Vote and the programmes in it would not give one a true reflection. In discussions with the Accounting Officer since I prepared my opening statement the way in which the Vote will appear from 2018 will be different and more meaningful. The funding for Irish Water, for example, will go through the Vote. In the future the programme analysis will be more meaningful. If I had read my opening statement, I would not have read that point. Perhaps the Accounting Officer might like to add to it.
Mr. Kevin McCarthy:
The Deputy will see a reflection of it in the briefing paper we provided before the meeting. The overall figures for the Vote in 2016, 2017 and 2018 are shown on page 4. The Deputy will see that the gross amount increased from €1.399 billion in 2016 to €3.263 billion in 2018. Obviously, some of the increase reflects a significant increase in funding for housing. However, a big chunk of it reflects the fact that funding that would have gone through the local government fund is now coming through the Vote. Therefore, it presents a more complete picture in the Vote.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
That is appreciated. The Comptroller and Auditor General has alluded to the fact that we will have one more year-----
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I appreciate that the Comptroller and Auditor General would not have read the point if he had read his opening statement beforehand.
Mr. Seamus McCarthy:
The point I was making about social protection was that the Votes for social protection and the Social Insurance Fund both dealt with the same type of problem, that is, income support. In order to get a comprehensive view, one has to put the two together to get a view of the supports for people of working age, those in retirement and so on.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I will spend a little time discussing the Mahon tribunal which features under the heading of audit. I was surprised to see that it was still current, given that the tribunal's report had been published in 2012. I would have expected the tribunal to have been concluded in 2013 or 2014, yet it appeared in the 2015 Appropriation Accounts. Expenditure amounted to €120 million and a ballpark figure of €40 million for additional undetermined expenditure is provided. What is that about?
Mr. John McCarthy:
The Deputy is absolutely right. It is three or four years since the final report was published - my apologies, it was published on 31 July 2013 - and 21 years since the tribunal was established. To update the Deputy on the figures, at this stage we have spent just over €131 million on the tribunal. The big outstanding piece at this stage is the claims for third party costs. Arising from the tribunal, there are 319 claims, if one likes, for third party costs, of which 245 have been dealt with. They are managed by the State Claims Agency on our behalf. There are, therefore, 74 live files.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Are they particularly complex?
Mr. John McCarthy:
Much of it is down to when the actual claim was submitted. Through the process, we are trying to ensure that, as far as possible, outstanding claims will be submitted as quickly as possible in order that we can dispose of them. There are 74 live files, within which there are 35 in hand within the State Claims Agency.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Does the figure provided reflect the total amount requested in the outstanding claims?
Mr. John McCarthy:
The sum of €9.2 million is what has been requested on foot of the 35 claims, but the expectation is that they will be settled for about €8 million. The estimate from the State Claims Agency is that for the remaining claims that have yet to be submitted, one is probably talking about a similar figure. There is, therefore, a figure of another of €16 million in total for third party claims. In overall terms, the updated estimate from the tribunal as of last month is that the overall cost will be about €149.5 million. Previously, the tribunal estimated that the figure might be as much as €159 million, but the experience of the State Claims Agency is that it has managed to secure significant reductions between the third party costs claimed and for what it has settled them.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
The longer the process goes on, the more likely it is that a law firm or barrister will settle, as I know.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Was there any particular reason? The Accounting Officer stated it was dependent on when bills were presented. Surely a cut-off date should have been applied. We cannot keep funding this process, given that the report was published six years ago.
Mr. John McCarthy:
We explored this issue previously and it seems that legally we do not have a strong hand to bring a curtain down on it. However, the indications from the tribunal are that it expects all of the outstanding claims to have been submitted and resolved by the end of next year. That should be the back of it.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Has the administrative and secretariat side of the Mahon tribunal been completely disbanded or is it still in operation?
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Is there still a payroll cost to the Exchequer arising from it?
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Flowing from the Mahon tribunal and its findings was a recommendation that an office of planning regulator be established. Unfortunately, the recommendation has not been implemented. In 2016 a budget was provided for the new office, but it remains unexpended. The relevant legislation has been delayed repeatedly and is before the Seanad. I appreciate the Department's involvement in a range of areas in recent years, whether housing, water services or dealing with planning issues such as lapsed planning applications and applications for planning extensions, which has probably taken up its time in terms of dealing with the legislative process. However, given that the Mahon report was published in 2012, although it only became formally available in 2013, it is disappointing that a planning regulator has still not been appointed. I say this as a Deputy who has supported the Government since 2011. The findings of the tribunal relate primarily to matters in my constituency and former politicians in it. As such, the need to get planning processes right is close to my heart. This issue is worthy of attention.
Chairman, given the amount of money this State has had to pay, I wanted to highlight the inappropriate bribery and-or whatever else one wants to call it back in the day by very prominent local and national politicians. I still cannot believe that we are so many years post-fact and still we do not have a planning regulator in place.
Thanks to the work of the Department there is not a huge amount of surprising elements in this part of the Vote other than the Department's failure to expend part of its voluntary and co-operative housing budget, which I understand was €53.3 million in the budgetary year of 2016. The situation was not quite as bad then as it is now, in terms of housing demand, but it was still very bad in an historic sense. Why did the Department not expend the money?
Mr. John McCarthy:
In 2016, we were really in a state of trying to crank up the public housing programme. We encountered some successes in some areas and some slowness in others. We, in a conscious way, tried to operate that whatever the total funding that was available to us for housing would be expended. We tried to fire the fuel into all of the engines and get them all up and running so that in some places, where there was a slower than expected response, we had other parts of the housing programme where we were able to deliver. In overall terms, yes, some elements of it were slower to get back up and running but we accelerated in other areas to ensure that we were able to move money and get the product, in terms of critically important housing, delivered in overall terms.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
The sum is €53.3 million. That is a lot of money not to have spent.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Can the Secretary General explain, even if he has to break it down into individual subheads or programmes, how the Department did not expend, or how the voluntary and co-operative housing agencies did not spend over €50 million that was given to them for housing purposes?
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Was the ability to deliver overestimated on the part of those agencies? Did a problem delay delivery? Was housing delivered in February 2017, for instance?
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
The capacity.
Mr. John McCarthy:
-----the steepness of the curve in terms of coming out of it. We were very conscious of that. We made sure that we did deliver through other programmes that would compensate for it so that in overall terms the product that we needed to get, in terms of important housing delivery, was delivered overall.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Perhaps the Secretary General can provide me with information on the capital assistance schemes that have been specifically referenced in subhead A.4. I do not mean right now. I would like a breakdown of the figures and the Secretary General can supply that information to the Clerk of the Committee in writing. This is the first opportunity that the Committee of Public Accounts has had to assess the capacity of the Department and its agencies to deliver on housing because this matter was really not applicable in 2015 to the same extent. I would like to know the details. Such information would help all of the Members of the Oireachtas to determine the capacity of the Department, the local authorities and, in this particular instance, the voluntary and co-operative housing sector.
I wish to raise another matter.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Can I clarify a matter?
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Yes.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
The Secretary General has used the term "capital assistance scheme". People here who work in the system will understand the term but I ask him to explain what it means for the benefit of the viewers and the public.
Mr. John McCarthy:
The capital assistance scheme, in effect, is a line of funding made available to approved housing bodies for the delivery of social housing. It very much focuses on special needs social housing so it is for people with a disability, the homeless or older people.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
I thank the Secretary General. Deputy Farrell, I am sorry for the interruption.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
It was no problem. I probably should have made that point. On page 29 of the report there is an extraordinarily large High Court judgment in respect of a land swap arrangement for €2.51 million. Can the Secretary General give me some information on the matter?
Mr. John McCarthy:
Yes. That was the subject of a previous report by the Comptroller and Auditor General going back to 2014, I think, if my memory serves me right. It dated back, and I am speaking from memory now, to a land swap that was undertaken in the mid-2000s whereby a public site in Harcourt Terrace, rather than being sold and the money used to deliver affordable housing, was swapped for discounts on housing which made them affordable. There were problems, ultimately, with the vacation of the site. The counter party to the transaction took legal proceedings and there was a judgment against the State.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Please. That was prior to my time on the Committee of Public Accounts.
Alan Farrell (Dublin Fingal, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I am only a recent addition, in 2016.
Finally, I wish to re-emphasise what I said at the start. The Department has done extraordinary work over the past week or so and has my sincere thanks.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Deputy Peter Burke is next.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I wish to reiterate the remarks made by Deputy Farrell. I thank the Department for the heroic efforts of its staff over the past week. Today has been a very long day for witnesses and I thank them for their patience.
I shall focus on the mortgage-to-rent scheme and will break it down into two sections. First, I will deal with the local authority sector. I think a pilot scheme was conducted by the local authorities in Dublin and Westmeath. I ask the Secretary General to outline the logistics of the scheme.
Mr. John McCarthy:
The local authority mortgage-to-rent scheme was, indeed, piloted in Westmeath and Dublin city a number of years ago and then extended to all other local authorities. A bit like the mortgage-to-rent scheme for private mortgage holders, the scheme was targeted at people who are clearly in an unsustainable mortgage situation. In effect, what happens with the local authority mortgage-to- rent one is that the local authority takes ownership of the house and the household becomes a social housing tenant of the local authority. In the private mortgage-to-rent scheme, an approved housing body takes ownership of the house and the household remains on in the house and becomes a tenant of the approved housing body.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Let us say a mortgage is worth €130,000 but the market value of the house is just €65,000 so €65,000 of debt must be crystallised. There is a fund called the mortgage arrears resolution process or MARP. A premium is put on the interest rate of local authority mortgages to finance such crystallisation through the Housing Finance Agency, HFA. What is the premium on the interest rates started when the mortgage-to-rent scheme started? How much money remains in the MARP fund?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
In terms of trying to keep homeowners in their homes, are there many suitable mortgage-to-rent clients left in the local authority system?
Mr. John McCarthy:
From that point of view, if one wants to look at the local authority mortgage arrears situation, one will be looking at the proportion of the local authority mortgage holders who are in significant arrears.
At the end of 2017 there were a total of just under 16,000 local authority mortgages and 3,807 of those were in arrears of over 90 days. That is approximately 24%. That is down from almost 30% at the start of 2015. While the profile has improved there still is a significant proportion of local authority mortgage holders in the more than 90 days arrears category. I am not saying that all of those will be ultimately in unsustainable situations. Clearly, according as household circumstances change and improve that will have an impact, but there certainly is a cohort of people within the 3,800 who are likely to end up in a mortgage-to-rent type situation.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
What is the variable interest rate for local authority mortgages at present?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
In terms of reductions that were implemented through the Central Bank, if interest rates were to increase, for argument's sake, how would that affect local authority interest rates with regard to tenants not having the reductions passed on through this increase or premium that is put on them?
Mr. John McCarthy:
Generally, when the HFA, working through the NTMA, has secured new borrowings or refinanced borrowings those reductions have been passed on to mortgage holders. The 2.3% is incredibly competitive versus what is available on the market. However, if the interest rate environment were to change, it is likely that according as the cost of funds to the HFA increases, that cost will probably have to be passed on to customers.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
In how many cases per year would the local authority be processing a mortgage-to-rent?
Mr. John McCarthy:
I will give the figures for the total number of local authority mortgage-to-rent cases at this stage. It started in 2013, when it was being piloted, and there were 18 cases concluded. At then end of 2017 there were 370, so over the last four years it is an average of between 80 and 90 per annum.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
If we box that off, that is how the process works in the local authority system. It is the State's housing stock. One can see the clear process of how it is funded and how the target is to keep people in their homes. Let us move to the private sector and people who have mortgages from financial institutions. I believe there are 12 participating lenders through seven approved housing bodies. Can the witness talk about how the mortgage-to-rent system is working? On average, how many applications are processed per annum?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Does Mr. McCarthy accept it is not working?
Mr. John McCarthy:
I believe it is working better than it was. We probably have yet to see some of the streamlining arrangements that were put in place in 2017, but certainly the timescale from start to finish for the completion of a transaction has come down over that period of time. However, there is still an element of that which needs to work through.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
What about numbers?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Is that since its inception?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
That is absolutely incredible in terms of the failure of the system. PTSB issued a statement which I believe was its second statement following its intention to package loans. It stated in the last paragraph that, potentially, there are 1,000 customers who may be suitable for the mortgage-to-rent process. One can assume that those are unsustainable mortgages, yet Mr. McCarthy says such a paltry number have been passed since its inception. There is something seriously wrong here. We have not even moved on to the other banks yet in terms of mortgages that may be unsustainable and the huge ambition of trying to keep homeowners in their homes and to facilitate them in that process. I am trying to figure out why this scheme is not working. There is a massive failure here. Why is it not working?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
With regard to ineligible, is that because they are outside the parameters in terms of income limits and the value of their property, be it in Dublin or outside Dublin?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Who would put the cases forward if they did not meet the conditions of the scheme?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Do the banks not know this?
Mr. John McCarthy:
They should. Given some of the changes we made early in 2017 in the eligibility requirements, we probably addressed some of the issues there in respect of both the value of property that can come into it and the extent to which people may be over-accommodated. As time goes by, we should see that-----
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Can Mr. McCarthy talk through the precise process, step-by-step, for a private lender and an individual who has a mortgage with the lender when they wish to go through the mortgage-to-rent process? We have discussed how it works in the local authority sector. Logistically, how does it work in the private sector, step-by-step?
Ms Nina Murray:
The mortgage-to-rent scheme is available to those who have been deemed by the lender through the mortgage resolution process to have an unsustainable mortgage. There is a series of interventions and forbearance measures before somebody would reach a situation where he or she is having a discussion about handing over his or her home.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
It is established that it is an unsustainable mortgage. It is a hugely stressful process for a homeowner to go through in terms of realising that he or she might have to give up the home and rent it afterwards. That is massive in itself for a family. However, let us say somebody comes to that conclusion and wishes to enter this process. Where does the person go from there?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
To whom do they submit the application?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I am sorry for interrupting, but let us assume that the criteria for social housing are met. To whom is the application submitted?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Is that an approved housing agency or-----?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
The application is submitted to the agency. What happens then?
Ms Nina Murray:
If the applicant meets the criteria in terms of the valuation of the property, the applicant has been deemed by the lender to be in unsustainable mortgage arrears and the applicant has met social housing criteria, it is then made available to approved housing bodies to purchase. A number of approved housing bodies are engaged with the scheme.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
It is seven.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Let us stop there and refer to the crystallisation process for the debt that is in this mortgage account. We were speaking earlier about the local authorities and I referred to €130,000 where the house is worth €65,000 so there is €65,000 to be crystallised. The Department has a budget for that. Is that correct, or where does it go?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
The Department does not offer anything to that. The lender takes that write down.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Will Ms Murray repeat that?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
In theory, the Department is relying on these seven agencies for the success of the scheme.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Where is the problem then, if the cases are so small? Something definitely does not make sense here.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
I have raised this issue by way of parliamentary question and received zero answer on it. The issue is as follows and it relates to the current mortgage-to-rent scheme. A pilot scheme was being looked at after the last mortgage-to-rent scheme was up and running. At the end of the pilot scheme, they will do a handful and in another year they might roll out some more. Ms Murray has answered the question. She said the matter is between the lender and the homeowner. The lenders still reserve the right to come after the renter for the negative equity. That has never been stated by the Department. The Department always says it is not matter for the Department. It is between the lender and the borrower and the Department does not interfere with that. If one looks at the agreements as I have, they reserve the right to contact the renter who has given up the title to the house at any stage in the future to discuss that matter. Officialdom is blind to that as it is not a matter for them; it is between the borrower and the lender. That has put a lot of people off. Under the new arrangements and the pilot scheme being looked at now, I understand the new companies coming into this field have agreed not to pursue the negative equity and to make it absolutely clear when they do the deal with the voluntary approved housing body that it is the end of the matter. Those companies will take the write-down whereas previously lenders were not giving that absolute commitment. I have encountered those cases. It might not be the answer for it all, but it is certainly an answer for some of them.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
It is a part of it but in terms of the approved housing bodies - the seven agencies - are they operating efficiently in relation to their component of the transaction?
Ms Nina Murray:
They are purchasing individual units on a single acquisition transaction basis which, in itself, is cumbersome. There are a lot of conveyancing issues, there is a borrower, a lender and a purchaser. We are all agreed and the February review to which the Secretary General referred was about building scale in mortgage-to-rent. Part of that is bilateral agreements and discussions approved housing bodies have with lenders to make the process more efficient. Certainly, there are upwards of 300 families who have remained in their homes and are now the tenants of approved housing bodies.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I accept that fully but it is not a ringing endorsement of the seven approved housing agencies. Is it fair to say that?
Mr. John McCarthy:
When one looks at the numbers that are either ineligible or opted out during the process, they account for the lion's share of the 3,857. One of the issues that arose prior to the review we completed early last year was whether all banks were really engaging with it. One of the requirements we introduced was that if a bank is not putting its mortgage holder towards the scheme, it must set out in writing why that is the case.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Can Mr. McCarthy repeat that?
Mr. John McCarthy:
One of the issues raised with us when we were doing the review was that it was very much left to the bank to decide whether it put a particular client in the direction of the mortgage-to-rent scheme. Where it chose not to do so, no one really knew why. One of the requirements we have introduced is that where a bank is not going to put a client towards the mortgage-to-rent scheme, it must set out in writing why that is the case.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Who deals directly with the approved housing body on the application to finalise that end of the transaction?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Is there any concern about the locations of properties or the stock the housing bodies take on? Can they refuse an application in theory if they feel the property may be unsuitable for them in the future?
Ms Nina Murray:
There is no obligation on an approved housing body to take any unit. They are purchasing it and that is the subject of a business decision. We have built into the finance we provide to approved housing bodies lots of support for them and they have been building capacity for the last number of years. The supports are there.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
What has changed that will lead to an improvement in the figures?
Mr. John McCarthy:
There are two things. One is that we still have to see some of the benefit of the new arrangements that were introduced post February 2017. Ms Murray mentioned that it is operating on a transaction by transaction basis. There are some private finance entities which have expressed an interest in coming into this at scale where the property would remain in private ownership - by private I mean the finance house - and be leased back to the local authority. There is a market testing and expressions of interest exercise taking place at the moment on that. If it yields an outcome, that could see a real step up in scale as one would then be dealing with a small number of finance houses that would take on a chunk of potentially eligible mortgage-to-rent properties.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Mr. McCarthy is talking about a private investor entering the market on a major scale. The State would rent the property from the investor. Is that it?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
For how long?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Would that have implications for the State's balance sheet?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
What about maintenance and all of that?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
How far advanced is that?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
As to scale, are we talking about massive private investors?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
If somebody wants to do 1,000 units, is that feasible under the pilot scheme or is there a limit to the number of houses being considered initially?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
What figure, approximately?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
From private finance?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Can the witnesses go through the staged process a local authority housing scheme must go through to get final approval from the Department? If one starts with a greenfield site, what stages does it have to through? I am not talking about massive scale. If there are ten houses, what path does that take through the Department?
Mr. John McCarthy:
Under the capital works management framework, there are nine stages technically which apply to capital projects and these have been sweated down to four. The four stages are: an initial capital appraisal to set out some fairly basic information and establish if it makes sense; the design stage; the tender stage, and the tender approval. We have done a lot of work on this with local authorities over the recent past and put a targeted arrangement in place whereby a timeline is set for each stage of a project as to what the local authority and the Department have to do, respectively, to satisfy the requirements of the capital works management framework.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
How long on average should it take to go through the four stages?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Fifty-nine weeks.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Is that a guideline?
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
So the Department is now working to 59 weeks. What was the average turnaround during the past two years or beyond that?
Mr. John McCarthy:
It would have varied quite widely. Some of the rapid build projects we have put in place have been much shorter than that while some of the more significant capital-intensive projects may have taken longer. We are going to track things against the 59-week period, which has only recently been put in place, to be able to target that. It is important to note that during that 59-week period, the project is only with the Department - in terms of its work - for 15 weeks. Sometimes one hears commentary about the four-stage approval process as if the process is in some way slowing the thing down. In reality, within that 59-week period, a project will need to be designed and go through planning and the actual tender process. If we had no four-stage approval process, it would only take 15 weeks out of those 59 weeks because that is the time the Department is allowed to complete its work.
Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I know Mr. McCarthy said the Department had changed to a four-stage process. While I am someone who would not compromise on quality of work, value for money etc., I also am conscious that we pay directors of services and county managers in this country very well. They are paid to take responsibility. I am concerned about what I hear anecdotally from talking to and meeting people that some people still seem to be frustrated at the pace. If we are talking about ten houses in a small scheme in a local authority that has the staff and knows what needs to be done, there is frustration that questions are going back and forth, someone is on holidays and things get delayed repeatedly.
Mr. John McCarthy:
One hears it from both sides. I am not saying we are always right because we are not. That is the reality. This is why we have put the targeted timelines in place and monitor them. As we also have a single-stage process for projects of up to €2 million, it is one stage for those smaller schemes and it is a case of "on you go" after that.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
I welcome the officials. This is my first Committee of Public Accounts meeting and I wish it was my last.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
I do not think I will be that lucky so I might have to apply to be leader of the party next year so I can vacate it. Page 16 of the submission concerns the housing programme. I wish to discuss some of the housing supports that are provided such as HAP and RAS. I do not have the figure relating to HAP because it is all combined into local authority housing. I know there was an additional €10 million in 2016. Do we have an overall figure for what we are currently spending on HAP?
Mr. John McCarthy:
The HAP scheme was piloted in 2014 and has been rolled out progressively over the past few years. It has been available in all local authorities since 1 March 2017 so it has been in operation nationally for one year. As the cost has increased in parallel with that phased roll-out, in 2016, the outturn for HAP was €57.7 million while in 2017, it was just under €153 million.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Obviously with HAP, the inspection of a property must take place within nine months. Is that correct?
Mr. John McCarthy:
Under the legislation, if a property has not been inspected within the previous 12 months, it must be inspected within the following eight months. We are engaged in a process with the shared services centre in Limerick, which provides the back office support for all local authorities with regard to HAP, to get better data with regard to this issue because some local authorities had pre-existing IT systems that recorded private rental inspections and we need to do a matching exercise between those records and what is on the HAP system to be able to better understand the extent to which-----
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Is it fair to say we not have a figure for HAP properties that would comply with the legislation in terms of an inspection within the first nine months?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Does anyone have that figure? Do the local authorities have those figures?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
This is the problem I have with it. Based on my experience as a Deputy, the number of properties that are not inspected is significant. Last year, we paid €153 million to landlords, many of whom provide substandard accommodation. Examples include no heating, damp and windows that do not open in clear breach of safety regulations and legislation. Is the Department comfortable knowing that we are giving public moneys to rogue landlords who do not comply with the law and who are putting citizens' lives at risk?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Should the Department not have done that before we decided to spend an extra €100 million on HAP this year?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
What percentage?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
So it is a small percentage.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
If a property is inspected and fails the inspection, what is the next step in the process?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Are there guidelines around the make-up of households for HAP? I can give an example of a single mother with three children living in a one-bedroom flat who is in receipt of HAP.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
As the Accounting Officer, would Mr. McCarthy be comfortable knowing that public moneys are being given to a private landlord who was providing a one-bedroom apartment to a single mother and three children?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
This is the issue. As I said, it is my first meeting as a member of this committee and I am still trying to find my feet as to the types of questions we can ask. It was my understanding that the Committee of Public Accounts looks at public money, how it is spent, whether we are getting value for money, controls, processes and accountability and does not really deal with policy issues. We clearly have a breakdown in policy here, however, which is impacting the controls that are being put in place.
As a member of this committee and a Member of the Oireachtas, I am not comfortable with the fact that public money, amounting to €153 million, was paid to landlords in 2017 and we do not know how many of those landlords are providing substandard, dangerous accommodation to some of our most vulnerable citizens. I have not heard anything yet from the Department about how we are going to resolve that. Mr. McCarthy has said that the Department is looking at the two systems and trying to bring them together into one system but how long is that going to take? When can we expect such a system to be put in place? Even when it is put in place, can we be quite confident that any public money paid to private landlords is paid on the basis that they are providing a secure and safe environment in which people can live?
Mr. John McCarthy:
What we are trying to achieve with regard to HAP properties specifically is to satisfy ourselves that the requirements that exist in terms of inspections are being met. In overall terms with regard to the private rental sector, we are trying to get to a point where by 2021 we are inspecting 25% of rental properties generally.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
In my opinion, 25% is not very ambitious. That means that 75% of properties in receipt of public moneys are not inspected and we have no idea of the standard of those properties.
Mr. John McCarthy:
I may be confusing matters somewhat but there are two things at play here. There is a very specific requirement with regard to publicly-funded properties through the HAP scheme. We need to get our systems talking to each other so that we can actually satisfy ourselves that we are meeting those requirements. In the case of HAP, the point we are working towards is ensuring that if a property has not been inspected in the previous 12 months, it will be inspected in the following nine months. That needs to apply to every publicly-funded property. The broader target is to ensure that the standard of properties in the private rental sector generally is acceptable.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Mr. McCarthy is talking there about properties that may not be in receipt of State support.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
That is where the 25% figure applies. Is that correct?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
So, in terms of HAP properties, we are trying to reach a position where if such properties have not been inspected within the previous 12 months, they will be inspected within the following nine months. That requirement will apply to every single HAP property. How long will it take to get to that position?
Mr. John McCarthy:
That depends on the outcome of the datasets matching exercise and what that tells us in terms of where we are at the moment and what further progress needs to be made. We hope that by the end of quarter 2 this year we should have a better picture of that. Obviously, when it comes to prioritising activity from an inspection point of view, our first port of call as we increase the programme of inspection activity will be to focus on properties that should have been inspected but have not been so that we satisfy that statutory requirement in the first instance.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Who will carry out the inspections? Can the Department instruct the local authorities on that? Can it give them data on the properties that have not been inspected and set targets for them or do the local authorities set their own targets? Does it depend on how many inspectors the local authorities have? Some local authorities have very few inspectors.
Mr. John McCarthy:
Going back to the 25% general target, we have written to the local authorities setting a target for them. We have funding available this year so if they need to take on additional resources to reach those targets, funding will be available to them to do so. The intention is that the inspection funding line will increase over the next few years as the level of ambition increases. Depending on what picture emerges from the data matching exercise, we would then engage with each of the local authorities to ensure that they are deploying the additional resources to the priority areas.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
I am not familiar with the committee rules so am unsure if I am allowed to ask my next question. I ask the Chairman to stop me if I am out of order.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Keep going.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Is the Comptroller and Auditor General comfortable with the knowledge that public moneys are potentially being paid to private landlords who may not be adhering to legislation and best practice in terms of safety and so forth?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
I appreciate that we have increased it by €100 million but by how much will it be increased this year? What is the figure for 2018?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
We are doubling it again. Is that correct?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
So we have gone from €57 million in 2016 to approximately €245 million in 2018.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
In that period of time have we seen any significant increase in the number of inspections?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Does Mr. McCarthy know of any HAP properties that have been withdrawn from the scheme because they have failed an inspection? If so, does he have a number for such properties?
Mr. John McCarthy:
In terms of exits from the HAP scheme, there were 687 compliance exits. Some of those would be because of compliance issues with landlords or because of anti-social behaviour. I do not have a breakdown of that 687 but some of it would relate to property standards. Standards would certainly be a component of that 687 total.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
It would be appropriate to try to find out how many of those 687 exits from the scheme were because the properties failed inspections.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
One aspect of this is dealing with the fact that we have landlords who may fail inspections. Inevitably, part of that 687 figure will include people who will just leave a HAP property because it is substandard. In my experience people have come into my constituency office - and I am sure to the offices of other Deputies - and reported that they are living in a HAP property which is substandard. In those circumstances, I have written to the local authority reminding it of its obligation to carry out inspections but those inspections are not being carried out. They are simply not being carried out and that must be addressed. What is happening as a result is that people are exiting the HAP scheme.
A similar issue arises with the rental accommodation scheme, RAS. It is my understanding that the relevant legislation states that before a property can become eligible for the RAS, an inspection must take place up front. There is no nine month period of grace. The property is inspected and if it is deemed to meet the criteria it can be eligible for the RAS. Is that correct?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
How many of those inspections are being carried out before properties become RAS properties?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
There is a reason for that which I will come to in a moment. I am just wondering how many inspections of RAS properties are carried out?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Does Mr. McCarthy know how the local authorities satisfy themselves of that? Is it by carrying out inspections?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Is Mr. McCarthy aware of landlords providing letters of comfort to say that their property is up to standard?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
If we are saying that a RAS property is up to standard on day 1, why do we have people coming into our constituency offices who have been in RAS properties for less than six, 12 or 18 months with complaints that the property is not up to standard? Issues include no heating and in some cases, no hot water. In some cases there are windows which cannot be opened. Tenants are actually exiting the scheme. They do not want to be RAS tenants any more but want to try to get back onto the local authority housing waiting list. That poses a problem because once a tenant accepts a RAS property, there are consequences for that. Do we know why people are exiting the scheme in such huge numbers? I am sure some of it is because they are transferring to the HAP or other schemes.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
I will finish on the issue of housing. I will reiterate that I am extremely uncomfortable with spending €300 million on HAP this year when we have no idea what standard of accommodation we are providing to people. It is bizarre. It is something the Department needs to get a grip on very fast. It is not acceptable that that amount of money is being spent on private landlords who are screwing the system.
I will move on to the issue of PPPs.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Which section is it?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Housing PPPs.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Mr. McCarthy got the list of issues on which the Deputy asked them to come back regarding the people who have left the HAP scheme.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
And the number of properties.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Just in case it is glanced over now, the request has been made by the committee.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
The majority of PPPs are not in housing. They are primarily in education and roads, although maybe not so much in roads nowadays. There are still a number of housing PPPs, perhaps on the regeneration side and house building. One of the issues I have with PPPs is that we are unable to get any cost-benefit analysis of PPPs so we do not know if we are getting value for money. It is an issue the IMF has raised. It has flagged concerns about it. How do we know we are getting value for money for PPPs if we cannot get access to cost-benefit analysis? Every time I have raised the issue with the Minister for Finance I am told that commercial sensitivities prevent him from providing it. Other countries can have cost-benefit analysis but we cannot. Will the Comptroller and Auditor General comment on it?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
That is exactly the topic of the next meeting. We have PPPs, the Department of Finance and-----
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
So I have to come to another meeting.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
-----the Department of Education and Skills.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
So I have to come to another meeting.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
That is the sole item on the agenda on 22 March. We will have all the people in that the Deputy is talking about.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Will Mr. McCarthy comment briefly on how much the Department spent on PPPs for housing this year or last year, if he has the figures?
Mr. John McCarthy:
It was minimal, if anything at all. From memory, there were some very small costs for land but the costs were quite minimal because the process has not moved on through procurement yet to a point where significant costs are incurred. The PPP programme in housing is looking to deliver 1,500 social housing units in three bundles. The first of those is currently at procurement stage. The sites for the second bundle of 500 have been identified and are going through planning. I expect the sites for the third bundle of 500 to be identified later this year. It will probably be towards the end of 2019 before we actually start to see constructed units coming from the first phase.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
As Accounting Officer for the Department, does Mr. McCarthy believe we should be getting a cost-benefit analysis of them? Would he like to get them?
Mr. John McCarthy:
There is a framework in place through the Department of Public Expenditure and Reform for how value for money is to be assessed for PPPs. The most fundamental part of that is the development of the public sector benchmark which the National Development Finance Agency advises on. The public sector benchmark is a calculation of what the provision of the asset and its management and maintenance over the period involved would actually come to if it was delivered through normal mechanisms in addition to taking account of the value of risk that is transferred to the private entity. Subject to the bidding process and what emerges through it, there is a comparison done between the cost proposed by the PPP bidder versus the public sector benchmark. A project will only proceed if the cost through the PPP process is less than the public sector benchmark.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
I appreciate it will be dealt with at the next meeting but the difficulty I have is even when one looks at the risk cushion, I could not get information on how it is calculated. That is a worry. We are talking about risk cushions but I could not find out how they are calculated. I am quite willing to leave it until the next meeting but I want to flag it. I was not aware it was coming up at the next meeting.
On the estate regeneration and social housing improvement, the appropriation accounts for 2016 show we underspent by €22.2 million. It says the savings that accrued were allocated to other housing programmes. Do we have an idea what the other housing programmes are? Are they within this Vote?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Yes, within the programme.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
We know it did not go to voluntary and co-operative housing because there was a saving there as well. We know it has not gone to subsidies and allowances. The only place it could have gone to is local authority housing and I presume most of that went to some of the housing supports.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
The accounts show there was an overspend of €62.357 million on local authority housing. I presume a lot of that was on purchases because the Department was not building a lot.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
The savings we made in other areas went to purchases.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
It was up by about €4.4 million.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Do those savings have to be spent within that particular programme?
Mr. John McCarthy:
It is possible in the ordinary course of a year, depending on circumstances, to look for money to be vired between programmes, but given where we were and where we continue to be with housing, we would prioritise any savings in housing for housing. In 2017, the progress that was made during the year saw us get a Supplementary Estimate of €100 million for housing, given the priority attached to it.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Will Mr. McCarthy send us a detailed note, because he has it in his folder, about the three PPPs that are in train, the one that is at procurement-----
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
The three different projects Mr. McCarthy mentioned, the three different bundles.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Will Mr. McCarthy send a detailed note to the committee?
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
There is a Government cap of 10%.
Jonathan O'Brien (Cork North Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source
Is that 10% across all Departments?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
I have a very quick question before the witnesses finish giving their evidence. In his opening statement, Mr. McCarthy said that as part of overall social housing delivery, 5,714 homes were built, refurbished, leased or acquired in 2016, exceeding the target of 4,240 homes.
How many of the 5,714 were directly built by local authorities? I do not mean including those by approved housing bodies. I mean specific construction by the local authorities.
Mr. John McCarthy:
While someone gets that information, I will break down, to the extent that I have the details in front of me, the overall figure the Deputy gave. Direct build accounted for 657. This includes both local authority and AHB builds. I will get the Deputy a breakdown of that in a minute. Acquisitions accounted for 1,957; leasing accounted for 792; the refurbishment, or voids, programme, accounted for just over 2,300. The local authority direct build within that 657 was 218, if I am reading these figures correctly.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Of some 6,000 homes, 218 were directly built by local authorities. That is it.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
In 2017, what was the figure for direct build in local authorities?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Is that separate from approved housing bodies?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
What did the approved housing bodies do then?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
How many direct build projects coming from the local authorities to the Department are awaiting funding approval where land is in place? How many of those are before the Department? What is the cumulative return we would get? What would the yield be, that is, the cumulative total of the yield that is before the Department awaiting approval?
Mr. John McCarthy:
If the Deputy bears with me for one second, I will get him that information. We publish every quarter what we call our construction pipeline. As the update for the end of the fourth quarter of 2017 is being finalised at the moment, the following figures are as of the third quarter of 2017. I do not have these broken down between local authorities and AHBs but I can come back-----
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Please do. It is important.
Mr. John McCarthy:
-----on that piece. We spoke earlier to Deputy Burke about the four-stage approval process. The figures I gave are sort of related to that. At the end of the third quarter of 2017, there were almost 2,900 units at stage 1, more than 1,600 at stage 2, 738 at stage 3 and just under 2,000 at stage 4, which is the tender report stage. There were 3,600 on site, and 1,460 units in the programme had been finished.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
The Department obviously holds regular meetings of city and county managers regarding their upping their game and coming forward with schemes seeking approval from the Department. I see these meetings on the television. What is the average size of the schemes from each county coming forward for delivery?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Again, I am not talking about approved housing bodies; I am specifically talking about county councils.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
That is just as important.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Regarding the long-term strategy, the Department is dealing with both the county councils and the approved housing bodies that do such fantastic work. The Department is dealing with the matter through acquisitions. I am harping on this issue because building has unquestionably flagged over the last decade or so. I saw very little building during my time on the local authority. We now have a scheme approved by the Department in my town, where there are about 5,000 people on the housing waiting list. The scheme is for 42 units and delivery is coming in at a cost of €11.1 million, which works out at around €280,000 per home. That is the cost of it. That was approved. The Minister of State with responsibility for housing represents my constituency. I spoke to Mr. McCarthy about this site this time last year, I think, when he was before the committee about Farganstown. This is just one example. In that big town with 5,000 people on a waiting list, that is what we are getting: €11.1 million, which is a lot of money, to deliver 42 homes. The Department is tackling this problem across a number of areas but, from the point of view of empowering the county councils, the Department faces a big challenge to make sure they step up to the mark. I would love to know what they are telling the Department. I would love to know what all the city and county managers are saying. They are all in the room together. I see them on the television. What are they saying? I have heard money is not a problem. If money is not a problem, where is the plan from their point of view to meet their targets outside of the acquisitions, the HAP schemes and so forth?
Mr. John McCarthy:
In overall terms, the ambition in respect of social housing is to deliver 50,000 units by 2021. It was 47,000 and it went up to 50,000 on foot of additional funding provided in budget 2018. This flows to some extent from the Oireachtas special committee report that was done in 2016 which referred to 50,000 as the level of ambition. Back in 2014, I think, or maybe it was early 2015, local authorities were given targets from 2015 to 2017 to be achieved. Now that the level of ambition has increased, the engagement the Deputy talks about - if he is referring to the engagement on television, I presume it was the one about five or six weeks ago - was around the targets for 2018 all the way to 2021 for each local authority to be delivered both by themselves or working in partnership with AHBs. We have told each local authority what its area is, the targets we have set and how we have broken down the targets in draft form. We have asked them to consider these. They are based on the latest housing needs assessment, the most recent of which was done in autumn of last year. Local authorities are now coming back to us on how they will deliver on that target. In the next few weeks we will finalise and publish those targets for each local authority.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
In meeting those targets the Department sets a headline figure, which is fine. Is the Department trying to get them to ensure a very good equitable spread across all areas in meeting those targets, or does it not care one way or the other as long as they deliver an overall figure? In the Department's report it is just an overall figure. I had to ask for the breakdown. Is there an aversion to a policy of direct build by councils? Is there an aversion on the part of the Housing Agency to the construction of council estates again in tackling this issue? Is there an aversion on the part of chief executives of county councils to building council estates of the nature of 150 or 200 homes? If so, why?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
I do not want to be rude at all. I mean county council estates, the county council estates that I knew. I grew up in the middle of the town of Navan. All the estates around me in the middle of the town were county council estates. They were finely built estates from the 1950s and 1960s where people reared their families. The issues pertaining today that people see, such as social problems, were not the issues then. We had plenty of problems in 1980s Ireland, but for whatever little money we had, we did not have the problems we see now. We were able to house our people. Is there an aversion to the creation of the council estates that I knew in my youth in my town and every other town across Ireland?
It is not that they do not seem to be getting built - they are not being built. Is the aversion from the Department; is it policy from the Housing Agency or from the chief executives of the councils?
Mr. John McCarthy:
The policy goes back to 2007 in the Delivering Homes, Sustaining Communities document. It is very much around making sure that we build sustainable communities. We have had experience over 20 or 30 years where we developed very large monotenure housing developments, some of which have worked. An awful lot, however, have not worked. Subsequently we have had to go in and do very significant regeneration projects. Each project would be considered on a case by case basis because each one is location specific. One could certainly envisage a 100 unit social housing project in an area where there is no social housing currently. If one wanted to put a 100 unit social housing project in to an area where there are already 500 or 600 social housing units that would be a different issue. On the overall scale there is no aversion-----
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Does this include the Housing Agency?
Mr. John McCarthy:
Absolutely. The Department has set the overall targets and the breakdown. I spoke about the figure of 50,000. Some 33,000 of this 50,000 is targeted to be built, some 6,500 is to be acquired and some 10,000 will be through leasing. Many of the leasing units will be new build also. Two thirds of the 50,000 is to be through building.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Mr. McCarthy has made the point about areas that have required major regeneration. I put it to Mr. McCarthy - and during my time on the council I continually made this point - that if the ancillary facilities were built at the get go when creating the communities in which we live, we would not experience half of the social problems that come down the line later on. Local government has a massive role in this. This does not just apply to social housing; it is also for private housing. Planners in our councils have zoned vast tracts of land, especially during the 2000s, and they did not make in any of the development plans the actual requirement for the types of social facilities required. That time bomb is coming like a train down the tracks also. Big time.
With regard to councils meeting the housing targets, when the councils comes back to the Department with their plans and they say they will meet their targets, in trying to do with direct build how many viable landbanks on average do the councils have? By viable I mean ready-to-go landbanks or landbanks that will avail of the local infrastructure housing activation fund, LIHAF? We have no available landbanks in my county and we are one of the biggest commuter counties with nearly 5,000 people on the social housing waiting lists.
Mr. John McCarthy:
We are engaged in a process allied to the implementation of the targets I have spoken of. At this stage we have mapped more than 700 sites across the State for housing. As part of the process of local authorities delivering on the targets that have been set for them we have asked the local authorities to prepare strategic management plans for sites in their areas so that we can-----
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Are those 700 sites State-owned parcels of land?
Mr. John McCarthy:
Yes. They are either owned by the relevant local authority or, in the case of some 70 sites, owned by the Housing Agency. The intention is to nail down the target setting process because there is no point in having part of the target delivery being reliant on direct build when access to land is a problem. We are trying to match those up. In some places it is quite a different picture. Some local authority areas have very decent landbanks in the right locations and other areas do not. In some cases, where local authorities do not have land where they want it, they have partnered with private developers who have planning permission to build but have not been able to access finance. We have put those together to get social housing built through the public funding programme that is available. We have a delivery team in place in the Department of Housing, Planning and Local Government, which visits all the local authorities to go through all these issues. I believe the team has been to 22 of the 31 local authorities at this stage. I am not sure if Meath is one of those.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
I know we do not have landbanks. We have the one, to which I referred, where the 42 units are being built. There are 85,000 people in the county on the waiting list, and a huge number of these, nearly 5,000 people, are in my home town. How is the Department assisting councils in the acquisition of land?
Mr. John McCarthy:
The priority in the first instance is to take existing land opportunities where they exist. This is why we are trying to go through the 700 sites that have been identified to be able to work out clearly which of those are in the right place and capable of early delivery. The second priority we have pursued, which I have already mentioned, is other lands that are not in public ownership, but with planning permissions or a developer with capacity to build other than for lack of finance. We put the public finance and the land together because significant prices are being paid for land at the moment and I am not sure it is the healthiest thing for local authorities to get in to land bidding wars and put up prices even further. This is why we have tried to max out the potential from the existing landbank, or through the associated landbank of developers. Obviously if there were still no opportunities coming through in particular local authority area we would have to look at proposals they might have to acquire land. The cost of the land is a critically important piece of it.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Okay. That is something I am aware of in the context of my county. I do not wish to delay the witness here but I would like to re-engage with Mr. McCarthy on the matter.
With regard to the cost of the refurbishment, there is a breakdown of 5,714 homes in 2016, and 2,300 of the homes are refurbishments, which is a very significant number. These are homes that were already in our existing stock. It is a huge number. What was the total cost of the 2,300 refurbishments and what is the average cost, generally, at the moment to refurbish voids and so on? I am aware that this dominates council budgets.
Mr. John McCarthy:
I will get that now for the Deputy. One of the consequences of the aftermath of the downturn was that local authorities found themselves presiding over increasing numbers of vacant stock, which they did not have the capital resources to refurbish. In 2016 the figure for voids was €34.8 million. It was a combination of three elements: the main void programme, the smaller derelict units programme and the very small two-into-one programme, where units were the local authority merged maisonette units into a modern unit. On average-----
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
What was the total spend?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
€34.79 million for those 2,300 refurbishments?
Mr. John McCarthy:
Yes. So if one looks at the three programmes I mentioned, within that there was 2,090 of what we might call voids in the normal sense. They came to just over €25 million. The 164 derelict units, which were the more serious projects, came to €7.8 million. There were 54 two-into-one units, which came to €1.89 million.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
It is massive money-----
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
----- on housing stock that we already own and are refurbishing. This is not an indictment. This is frustrating for Mr. McCarthy as it is for every public representative. Deputy Jonathan O'Brien spoke to the Comptroller and Auditor General about signing over the HAP figures. This is a serious amount of money that we are spending - €35 million - on refurbishments. I am sure Mr. McCarthy could enlighten us as to why local authorities have to board up properties at a time of a housing crisis. I can walk through certain estates and properties are boarded up. They are in a deplorable state and we have to spend €35 million on refurbishments.
Mr. John McCarthy:
I do not know the particular estate the Deputy is talking about, but in general terms because of this investment programme, the quantum of voids and boarded-up houses is very much reduced. I can recall talking to the team in South Dublin where I think from memory it has a social housing stock of just over 6,000 units and at any point in time it would have about 40 that would be in that category. Some of those are units that are boarded up for very short periods. In terms of estate management, as soon as a unit is vacated, the local authorities very often will need to go in and secure the unit to avoid antisocial behaviour or otherwise. It can actually be boarded up for short periods.
Fundamentally going back a number of years ago when we introduced this significantly increased voids programme, the situation we faced was that we were still in a very resource-constrained environment, as were local authorities, and yet we were seeing increasing numbers of vacant units. In terms of addressing the housing situation we face, the first step has to be if we have a specific number of vacant units, we need to get those back into stock so that we can get families into them. That was why even in the resource-constrained times we found ourselves in, we siphoned off a line of funding to support local authorities to bring those back into use because otherwise they would have just continued to lie idle.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
As it is 5.52 p.m., I will try to be helpful. What is the up-to-date position on the office of the planning regulator?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Where is it at the moment?
Mr. John McCarthy:
It is provided for in the Planning and Development (Amendment) Bill 2016 which was published in January 2016. It has had a slow passage through the Houses. We have had a number of legislative priorities that have intervened. Equally, other Departments' legislation has bumped us off the agenda on quite a few occasions. It has completed its work through the Dáil. Has it completed Committee Stage in the Seanad?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Will the national planning framework, NPF, also come under this?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Is this legislation responsible for tomorrow's publication of the draft Meath development plan being postponed?
Mr. David Walsh:
We had hoped that Bill would have been in place and enacted well in advance of this current time. We have proposed an amendment that is up for consideration in the Seanad on trying to defer the long work that will take place at local authority level. There is a 99-week process to get city and county plans through the system. There are a number of plans that are either starting or about to be published.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Draft plans.
Mr. David Walsh:
These are draft plans that will be up for consideration and go out for public consultation. The challenge is that they are still working off the existing regional planning guidelines that have been in existence since 2010. For those that we were about to start, we are asking if it would be better for them to wait until the new regional spatial economic strategies are in place so that they are working off the most up-to-date information and therefore would be consistent because it will be a six-year process.
In relation to Meath, I know currently the intention is actually to have that draft plan published either today or tomorrow.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Tomorrow.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
There is no instruction-----
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
----- from the Department to the director of planning or the chief executive to postpone publication, which has been postponed from tomorrow.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Exactly.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
The circular that has been circulated to the councillors refers to the interaction with the Department.
Mr. David Walsh:
We have had discussion with councils and with directors of services and their planning teams obviously with the huge work arising now from the NPF and the preparations of the regional spatial economic strategies. However, as it stands at the moment Meath is in a very difficult position in that other councils are beginning their work to research and prepare, but the actual deadlines according to the legislation as it stands for Meath to meet that deadline-----
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
It was on a sound statutory footing to go ahead and publish that plan. This plan has been in preparation since the autumn of 2016 and has involved a huge number of stakeholders and statutory public consultation. It is extremely important for the development of one of the biggest counties outside Dublin, and just this week with 48 hours' notice, it has been postponed. Mr. Walsh is telling me there was no directive from the Department to the council to postpone that.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
There was no advice to Meath County Council to do so.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
I find it very strange that the chief executive and the director of planning would pull the plan which had been due for publication tomorrow. There are 40 elected members who are extremely concerned for the lives of the 200,000 people that this impacts. This would offer the county a chance to thrive economically. This is as a result, as Mr. McCarthy has said, of this legislation having been stalled for ages. There is no guarantee this will be done in the Seanad by the end of April. Will anyone here give me a guarantee it will be done in the Seanad by the end of April?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
That leaves that plan in a legal limbo. Has the Department offered any legal advice to this local authority in this respect?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Okay. Would Mr. Walsh not be concerned for all of the people given the prospective economic development and housing development, because many landbanks are impacted by this in terms of the legal standing of both the current plan and the draft plan?
Mr. David Walsh:
On the legal status, a number of years ago a few local authorities were behind in their schedule in terms of being able to review their plans within the six-year timeline. Legal advice was given to a number of authorities, if they sought it, that until such time as the new plan was enacted, the existing plan continued to have effect.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Will it continue to have effect ad infinitum?
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Could a challenge to that be taken? Could anyone reasonably challenge that?
Mr. David Walsh:
Of course, anyone can take a challenge. I think it is a matter for Meath County Council and the executive to assure themselves that any steps they are taking in relation to their plan do not leave themselves exposed to those kinds of issues. I know of one local authority whose plan was months behind schedule. It received legal advice.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Okay, that is fine. Mr. Walsh has clarified that there was no directive and no advice of any nature - implicit or explicit - to Meath County Council to postpone the publication of that draft plan tomorrow.
Mr. David Walsh:
They are aware of the measure that has been proposed in relation to those authorities that will be beginning their process and that, if the legislation is passed, it will allow them to defer the publication of their plan.
However, they are equally aware that that provision is still just a consideration in the Seanad.
Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Finally, I note that at the Committee on Public Petitions yesterday there was a petition in respect of city status for Drogheda. I thank Mr. Lemass who wrote a supporting letter providing background information in respect of that. Because the petition sought to annex a large part of Meath, in particular, Laytown, Bettystown and Mornington, its credentials effectively were null and void. I welcome the Department's intervention in that respect. I ask that a similar circular would issue if there were any attempt to afford a Dublin mayor executive powers over any part of Meath in the same vein.
Mr. John McCarthy:
I will say briefly in response that under the programme for Government there was a commitment given that a number of local government issues would be the subject of reports, initially, to Government, and then on to the Oireachtas. Two reports have been sent to Government in the last couple of weeks in relation to town local government and boundary issues between local authorities. They are being readied for publication and they will go on to the joint Oireachtas committee shortly for consideration.
There is a third report in relation to what we call "metropolitan governance" and we are working on that one. I suppose what I am saying is that issues in relation to that space will again by the subject of a report. It will go to Government, it will go to the Oireachtas for consideration and then it will come on to the policy decision process after that.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
At this stage, I will call Deputy O'Connell.
Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I thank all the witnesses for being here today.
I thank the officials all for the work they have done over the past couple of weeks with the snow preparations. It was apparent that correct management saved lives. I thank them all for their commitment in that regard.
I am new to this. I am not new to the theatrics of committees which this seems to take to a new level in here. I look forward to it and hope to contribute to those in time when I find my feet.
On the €35 million being spent on refurbishments, it is a question of how long is a piece of string. I am sure it depends what state the houses are in. It depends on whether they need a lick of paint or have structural problems. For anyone to make a claim that spending €35 million on refurbishments is an awful lot of money, obviously, it is a lot of money but it depends on how many houses one is refurbishing.
If there is €35 million being spent on refurbishments, it is quite clear the Department has figures to show that some houses have a greater need. Do the officials have those figures here for us? Is it clear the ones that need a lick of paint and the ones that need a boiler? I refer to State property that is boarded up. I am sure there is significant structural issues with many of the Victorian houses. I suppose a EuroMillions figure of €35 million is a lot of money but I am sure refurbishment covers everything from gutters to foundations or whatever. In light of the previous contributors comments, Mr. McCarthy might elaborate on that.
Mr. John McCarthy:
The voids programme that we are talking about here would be the more serious cases where refurbishment is required. These are not necessarily longstanding because a property can become vacant and when the local authority goes in, it can find that the property is in pretty bad nick. We would expect local authorities to be doing the more routine lick-of-paint type of stuff that Deputy O'Connell talks about as part of their ordinary ongoing maintenance and we have a programme in place now to work with the local authorities to move to a much more formalised and structured planned maintenance programme.
The voids programme that we were talking about is, as I say, for the more seriously damaged properties. We have, if you like, a budget of a maximum of €30,000 per unit that a local authority could claim but that is broken down between individual component parts. In reality, the average under the voids programme is €18,000 per unit. As I say, it depends on the nature of the damage or the condition of the individual unit as to what exactly needs to be done to it.
Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Following on from that, if the price is estimated at €35,000, what happens to that unit?
Mr. John McCarthy:
I suppose we would probably expect that the local authority would make up the balance. We would certainly look and we try to be as helpful as possibly. Going back to what I was saying to Deputy Cassells, we have a more significant programme beyond the voids which we call the derelicts programme and if something was to cost significantly beyond €30,000, it is probably more a derelict unit or, certainly, heading in that direction rather than what we call a void.
Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I am conscious that in 2004 Dún Laoghaire brought in a ten-year plan to deal with voids and that seems to have been very successful. I do not like to have a cut at members when they are not here but I believe, in 2004, it was Fianna Fáil that removed direct build from the local authorities, and Part V was used for developers. If Meath had done what Dún Laoghaire did, maybe we would not have had today's conversation. Mr. McCarthy might comment on that.
Mr. John McCarthy:
I will steer clear of politics. There is a reality. It would not be evenly spread across the country but in large measure, pretty much most local authorities found themselves in a situation where they had a build-up of void properties. According as the downturn hit, it was not only central government's financial position that was seriously compromised. The reality was that the local government system's financial capacity was also significantly compromised. Most local authorities saw a build up of units that were vacant in those circumstances for long periods of time that required significant investment and they just did not have it. As I was saying earlier, the situation that we had to get to grips with four years ago was we had a serious housing problem which we still have, we were faced with a situation of limited capital resources - significantly less than we have now available - and at the same time we were seeing this build up of empty units, and we had to take a slice of the available capital resource and for much less money than what it would cost to build new units, put that in to getting the vacant units back into use quickly. It was, with lesser cost, to get them delivered more quickly. Obviously, according as the capital profile has increased so much over the last number of years, we are moving much more further back into direct build activity, both by local authorities and AHBs.
Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source
I suppose my point is if one has a local authority where there are proactive politicians who see something in front of them and they decide to take action, such as Dún Laoghaire-Rathdown County Council did in 2004, changes can be made. I believe they turn around voids in approximately 12 weeks. It works. I believe the previous speaker was on the local authority in Meath at that time and spent ten years on it.
On what I intended speaking about before I got side-tracked by politics, the HAP scheme was raised earlier - I was at another meeting. There is sometimes a concern as to whether we are getting value for the HAP scheme. How does one control whether we are getting value? Maybe somebody could elaborate on that.
With big public sector construction projects, there is often concern about overruns, that the start price is not the finish price. Has the Department provisions in place to mitigate against overruns? Has Mr. McCarthy any examples of what sort of percentages of overruns the Department is looking at currently? What is happening at the minute? What are considered acceptable overruns due to unforeseen circumstances? Has Mr. McCarthy a list of what he would consider to be acceptable?
Finally, because we all want to get home, I imagine there are often issues around the public appointment process. It is a lengthy process and, I suppose, compared to the private sector, sometimes by the time people have gone through it they may not want the job anymore. One hears anecdotal evidence of that. Is there provision in place where the Department can bring people in on a short-term basis for a year and perhaps circumvent the lengthy process that may not yield people?
Could architects, quantity surveyors, site managers and so on be recruited on a short-term basis to help circumvent the lengthy process?
Mr. John McCarthy:
On the question regarding the housing assistance payment, HAP, in terms of value for money there are rent limits in place for each local authority area and there is discretion to go beyond those rent limits and these provide an important benchmark against which progress can be measured. As part of the annual budgetary process, all Departments work with the Irish Government Economic and Evaluation Service, IGEES, which is based in the Department of Public Expenditure and Reform, to identify a number of programmes for review. The HAP scheme was the subject of one of those exercises last year, which concluded that the rents being paid were below average price levels in the market. While it was concluded that we needed to keep rent limits under review, there are no plans at this stage to change them.
On construction projects, I made the point earlier to Deputy Burke that one of the most important mechanisms that we put in place to try to manage the cost of social housing construction projects is the four-stage approval process. It allows us to move to the tender process, that is, from stage 3 into stage 4, with as good an understanding as possible of a site such that we have a realistic budgeted cost for the project. Under the new contract arrangements that are in place, such projects are not affected by inflation. Obviously, if exceptions arise - and they do - those need to be taken into account. As the construction programme is still at an early stage of ramping back up, there is only a limited sample available for review in terms of projects that have completed. To the extent that we have done so, on average approximately 3% to 4% have gone beyond the agreed budget.
On staffing, I am always loath to use the word "circumvent" when before the Committee of Public Accounts. Local authorities can choose to take on staff directly or, in some cases, to take on professional expertise through contractual arrangements. In many cases, it is a mixture of both. They can bring in people on temporary contracts but they must do so through a recruitment process. Since 2015, the Department has approved more than 700 staffing requests for local authorities, specifically in the housing-related area. Yesterday, we issued the local authorities with a circular on how they can avail of supports through the capital programme to cover some of the staff costs associated with building projects, whether those costs are for contracted expertise in terms of a private firm or for staff they take on, permanently or on contract. As I said, we leave judgment in this regard to the local authorities.
Kate O'Connell (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source
Who pays the bill in that regard?
Mr. John McCarthy:
The Department makes a contribution towards staff recruitment. The circular that was issued yesterday outlined some improved terms as part of that process. In many cases, as architectural and quantity survey expertise is engaged by local authorities to do work on the housing programme, it also will be doing work on other capital projects and consequently, the housing programme would not necessarily fully fund that cost.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
On the national planning framework, perhaps Mr. McCarthy would send the committee a note on the cost involved in producing it, including the number of consultants and environmental experts involved and the amounts paid to them. I have no idea what producing the framework cost but I am sure it cost a lot.
Mr. John McCarthy:
As requested by the Chairman, I will send a note in that regard to the committee. From memory, the two significant pieces in terms of external expertise on the national planning framework were the underlying analysis done by the Economic and Social Research Institute, ESRI, and the strategic environmental assessment and flood risk assessment.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
How many houses will the Department acquire this year through the Part V mechanism?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Is Mr. McCarthy familiar with the report on unfinished housing estates that was published yesterday?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
The Department is nearly there and I give it credit for that. What interaction is there between the Department and the four local authorities concerned in respect of the completion of the 1,084 vacant units within the surveyed unfinished developments? I believe the Department indicated there were 256 such estates. There are four counties that have over 100 such units on their lists. These are all counties in which there is huge housing demand. What is happening between the Department and the local authorities to wrap up this issue?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
As I said earlier, most of the work is already done.
Mr. John McCarthy:
In regard to the remaining unfinished units, albeit a much reduced number, if there is no local demand there are commitments in the Action Plan for Rural Development to look at rural resettlement. There may possibly be some avenues open to us in this regard. I acknowledge this is a contentious issue in many-----
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
There are 135 vacant units in Laois which we could fill very easily without going outside of the county.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
It is stated on page 17 of the report that savings of €2.2 million arose owing to slower than anticipated uptake in the national taking-in-charge of estates initiative. Did the Department provide any funding under this heading last year or this year?
Mr. John McCarthy:
No. That was a 2016 exercise, which in some respects we wanted to be a learning exercise. We are at a fairly advanced stage on a report arising from that exercise which will inform us on what we might do in the taking-in-charge space into the future, but we did not provide any funding for it last year or this year.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
What number of estates per local authority have not yet been taken in charge?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Will Mr. McCarthy send on to us the number of estates-----
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Five thousand estates to be taken in charge-----
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Is it 5,000 housing units or 5,000 estates?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
A developer might not want to take it in charge.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
How many in the system are being considered for being taking in charge?
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Mr. McCarthy might send us those details. I was going to raise that anyway but the press release from Mr. McCarthy's Department yesterday refers to the unfinished housing estates and further states: "This knowledge [the knowledge the Department has obtained on that] and expanded capabilities can also now be applied towards matters of Taking in Charge and Vacant Homes Action Plans ...". We had the Minister flagging yesterday the taking in charge scheme and Mr. McCarthy is telling me today that there is no money whatever for that. I get worried when the Minister refers to the taking in charge in a press release yesterday and Mr. McCarthy is saying we have no funding for that.
Mr. John McCarthy:
I mentioned earlier that arising out of the programme we did in 2016 we have been preparing a report with the lessons and all of that from that, which will now be informed also by the work that has been ongoing on the unfinished housing developments more generally. Obviously, it will then be a decision as to what that tells us and what do we need to fund for the future.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
I will conclude on a sad note. In respect of the meeting today with the Department of Housing, Planning, Community and Local Government, we are here since 10.30 a.m. and nobody has mentioned the issue of homelessness. It is a sad reflection on the witnesses' side of the table and this side of the table that we have gone from morning to 6.30 p.m. without that word being mentioned once. It was not mentioned in an opening statement. I know there is a lot of nitty-gritty detail to be dealt with but I found it a bit depressing. That word is written in front of me all day. I have waited to hear it until now. We have got through a full meeting without it being mentioned. I am not pointing at the witnesses but it is remiss on the part of everybody here that we could go through what is effectively a full day meeting the Department of Housing, Planning, Community and Local Environment without anyone mentioning the issue of homelessness. There is a lesson to be learned from that, and I will let people take whatever lesson they want from it, but the fact that the matter was not mentioned speaks volumes. Mr. McCarthy can understand my point.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Mr. McCarthy answered the questions he was asked.
Mr. John McCarthy:
That is not what I am saying. I want to assure the Chairman that there was generous commentary from him and others earlier about what has been done in the past ten days. A huge amount of that, in terms of colleagues here and more generally, has been on homelessness. It is on our horizon-----
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Permanently.
Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
Okay. It has been a very long day and a very long fortnight. The members will be pleased to know that we will adjourn now until our next public meeting at 9 a.m. on Thursday, 22 March, when we will meet with witnesses from the Departments of Finance, Public Expenditure, Reform and Taoiseach and Education and Skills and Transport Infrastructure Ireland regarding public private partnerships. I want to thank the Comptroller and Auditor General, Mr. Seamus McCarthy, Mr. John McCarthy and all his staff. On behalf of the Members of the Oireachtas, I will conclude by thanking all the officials in Mr. McCarthy's Department and all public servants and voluntary communities who worked so hard to bring everybody safely through a very difficult period in the past fortnight. The meeting is adjourned.