Oireachtas Joint and Select Committees

Thursday, 21 February 2019

Public Accounts Committee

2017 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 34 - Housing, Planning and Local Government

Dr. Mary Lee Rhodes (Approved Housing Body Interim Regulatory Committee) andDr. Donal McManus (CEO, Irish Council for Social Housing)called and examined.

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are dealing with matters relating to housing, planning and local government in respect of Vote 34 of the Appropriation Accounts. Before we proceed I wish to make one remark about our work programme. The Secretary General of the Department of Public Expenditure and Reform had written to us saying he was available for 7 March. We confirmed this morning that he will attend the meeting on that day. I understand the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach is also seeking his attendance before it. No doubt he will be able to attend both committees at a suitable time interval. We look forward to seeing him on 7 March.

In terms of Accounting Officers, recently we had the Secretary General of the Department of Health before the committee dealing with the children’s hospital and he also went to the Oireachtas Joint Committee on Health on another day. It is normal that Secretaries General should attend their line committees and the Committee of Public Accounts. It is not a case of one or the other. We are proceeding on the basis of his letter indicating that he will attend on 7 March.

This afternoon we have representatives from the Irish Council for Social Housing and the approved housing bodies interim regulatory committee to help our consideration of the housing Vote, which we will be examining next week. Neither of the bodies are accountable to the Committee of Public Accounts but are here to help our understanding in our examination of the Department's vote. I stress the point that they are here voluntarily to assist us in our understanding of the housing issue.

We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness to the committee. He is joined by Ms Deirdre Quaid, deputy director of audit. From the Irish Council for Social Housing we have Dr. Donal McManus, chief executive officer, who is joined by Ms Tina Donaghy, Mr. John Hannigan and Ms Karen Murphy.

From the approved housing body interim regulatory committee we are joined by Dr. Mary Lee Rhodes and she is accompanied by Ms Susanna Lyons and Mr. Pat Fitzpatrick.

I remind members, witnesses and those in the Public Gallery that all mobile phones must be switched off entirely. That means putting them on airplane mode, as merely putting them on silent mode will still interfere with the recording system.

I wish to advise the witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person or entity, by name or in such a way as to make him, her or it identifiable.

Some of those present may have time commitments so we will take the two opening statements and then we will allow committee members to ask questions. I invite Dr. Mary Lee Rhodes to make her opening statement, followed by Dr. Donal McManus.

Dr. Mary Lee Rhodes:

We are pleased to be here this morning to assist the committee in its review of the oversight and regulation of approved housing bodies. I am accompanied by my colleagues, Ms Susanna Lyons, head of regulation and Mr. Pat Fitzpatrick, approved housing body services.

The interim regulatory committee was set up in 2014 by the then Minister of State, Deputy Jan O'Sullivan, as a non-statutory committee to oversee the implementation of the voluntary regulation code for the approved housing body sector and to advise the Department on the development of statutory regulation. The regulation office was established to implement the code, pending enabling legislation. It sits within with Housing Agency and is overseen by the interim regulatory committee. After five years of development and operation of the voluntary code, we have a robust regulatory framework to which a large number of AHBs have voluntarily signed up and which is being applied transparently, effectively and with meaningful consequences for non-compliance.

For brevity, I will henceforth refer to approved housing bodies as AHBs and the interim regulatory committee as the IRC. As members will be aware, there are four statutory agencies with relevant oversight responsibility for various aspects of AHBs. These are local authorities, the Residential Tenancies Board, the Charities Regulator and, for some AHBs, the Health Information and Quality Authority. However, as pointed out by the Comptroller and Auditor General in his recent annual report, the AHBs nevertheless "function as arms-length bodies with their own legal status and with the capacity to transact business in accordance with their own constitutional arrangements".

Until the establishment of the voluntary regulation code, there was no active, centralised oversight of these organisations following their approval as AHBs. The voluntary regulatory code was launched in 2013 and set out key requirements relating to governance, financial viability and performance management to which all AHBs signed up to the code are required to adhere. The regulatory framework has developed over the past five years, with the establishment of the governance, finance and performance standards and related protocols.

Oversight has increased significantly through the regulation office and the IRC, and the AHB sector has demonstrated advancement relating to best practice and compliance across all areas of the regulatory requirements. The current framework provides for an open, transparent, proportionate, and risk-based regulation based on the principles of comply or explain. Larger AHBs and those planning significant growth are subject to more rigorous regulation than smaller ones.

Each year the regulation office issues an annual report and sectoral analysis with detailed information on housing stock, funding and finance, staffing, assets and performance management, thereby providing an important overview of the AHB sector. More importantly, each year the regulation office reviews the annual returns provided by the AHBs and issues an assessment report and assessment outcome. The assessment outcome is linked to eligibility for Government funding and is required by the Housing Finance Agency in order to approve loan finance.

In the 2017 to 2018 cycle, 83% of AHBs signed up to the code demonstrated substantial compliance, with 9% requiring additional written clarification. Where areas of non-compliance relating to governance, financial viability or performance management were identified, organisations were required to enter into a process of engagement with the regulation office. A total of 14 AHBs were deemed to require ongoing engagement to bring them into compliance. Following due process and due diligence, three AHBs were deemed unsatisfactory due to significant non-compliance and the Department was informed of these. As of September 2018, the IRC also provides a list of all AHBs in engagement to the Department. Circular 15/2016 states that only those AHBs having received a satisfactory assessment will be eligible for funding from the Department.

However, a statutory regulatory body would have investigation and enforcement powers which are currently absent from the existing voluntary framework. The absence of these powers and the existing terms of reference of the IRC limit the ability of the regulation office to go beyond deeming an AHB to be unsatisfactory. In addition, the lack of a statutory basis for the regulator impacts on the ability of other Government agencies to enter into memoranda of understanding regarding protocols, a situation that can delay appropriate follow-up on significant issues.

That brings us to the other subject of this invitation, on the nature of the interactions between the IRC and the Department of Housing, Planning and Local Government. I have already outlined the interaction in relation to the voluntary regulation code and note that an official from the Department is a member of the IRC. As stated in the introduction, the IRC has two main objectives, the second of which is to advise the Department on the development of statutory regulation. That was a substantial element of the IRC's work to June 2017. After that date, the ongoing work to bring legislation to the Government has largely been in the hands of the Department, with the IRC providing input on an as-requested basis. A new draft of the proposed legislation has recently been provided to members of the IRC and discussion of same will be on an upcoming agenda.

At the request of the Department, the IRC is reviewing its terms of reference and protocols between the Housing Agency, the regulation office and the Department of Housing, Planning and Local Government. Those are being reviewed in light of questions around the sustainability of the existing framework in advance of the introduction of a legislative framework.

In conclusion, the establishment of the voluntary regulation code and the regulatory framework developed by the IRC and the regulation office has provided proactive centralised oversight of organisations following their approval as AHBs. This ensures public investment in AHBs signed up to the code is safeguarded. It also provides assurance to key stakeholders, lenders and investors that the AHB sector is well governed, well managed and financially viable. The regulatory framework established has been successful to date. It has, however, a number of limitations, as highlighted above. It is important that the framework advances to a statutory footing, with the appropriate independent powers and functions, as soon as possible. A statutory regulatory body will be of significant benefit to tenants, the AHB sector itself, the Government, local authorities, lenders and, in future, investors. I thank the committee and I will endeavour to answer any questions.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I thank Dr. Rhodes. I call Dr. McManus to give the opening statement on behalf of the Irish Council for Social Housing.

Dr. Donal McManus:

I thank the committee for the invitation to address it today. The Irish Council for Social Housing, ICSH, is the national representative federation for housing associations. Accompanying me are my colleagues, Ms Tina Donaghy, vice president of the ICSH and head of development with Fold Ireland, Mr. John Hannigan, ICSH council member and CEO of the Circle Voluntary Housing Association, and Ms Karen Murphy, ICSH director of policy. We have supplied the committee with a number of background papers which I hope will provide members with further understanding of the sector. I refer to two aspects in particular, the role of the sector and its engagement with other stakeholders.

The ICSH was established in 1982 by a number of voluntary, non-profit and co-operative housing associations that believed non-profit housing associations working together could play a more significant role in meeting the housing needs of specialist groups, such as older people, people with disabilities and formerly homeless households, as well as the housing needs of low-income families, using new housing management approaches. These housing associations had witnessed social housing being provided throughout the rest of the EU by a range of not-for-profit housing associations and co-operatives. That was in addition to housing provided by the public housing authorities. It was felt Ireland was missing out in not providing additional options for those households in need of social housing.

The ICSH has almost 260 members. These comprise a small number of larger, tier 3, organisations, many active throughout the country, as well as a large number of smaller community or regionally-based organisations that have provided a specific type of housing service in a local community. Approved housing bodies also work in partnership with local authorities in the refurbishment, rejuvenation and management of local authority estates, in urban and rural local authorities, towns and cities. As well as providing and managing social housing, AHBs have provided supports to tenants to improve their quality of life. In some cases, that has involved providing supported housing, and ensuring older people do not have to move to nursing or care homes prematurely, or providing supports to vulnerable families and children.

Some ICSH members have been active providing rental housing for families since the 1890s, such as the Iveagh Trust in Dublin, and still continue to deliver new housing today. The sector, therefore, has a long-term commitment to providing housing and investing in local communities. By the 1980s, it was estimated that non-profit housing associations owned and managed around 2,000 homes throughout the country. Much of that early success was achieved by local voluntary effort, such as raising finance and securing the donation of sites and properties. ICSH members, also known as housing associations or approved housing bodies, have a social mission and purpose and assist local authorities in addressing housing needs. The recent expansion of the sector from the 1980s, in providing homes and new types of housing services to address gaps in housing provision, was facilitated by the introduction of two State capital funding schemes by the then Department of the Environment. They were the capital assistance scheme, CAS, in 1984 and the capital loan subsidy scheme, CLSS, in 1991.

These schemes yielded over 27,000 new homes, with CAS comprising over 60% of the total. As well as being supported by central government and local authorities through the subsidised sites scheme, as well as Part 8 schemes, approved housing bodies also sourced sites locally themselves. Those have delivered an estimated 6,500 new homes. Output figures for the sector, contained in the background paper, show that delivery of homes by housing associations increased from a few hundred in the 1980s to more than 2,000 homes in 2009. That was before the property crash and Government cutbacks in social housing expenditure. During the 1990s and 2000s, it is estimated that housing associations provided between 20% and 30% of all new social housing annually.

Currently, within the commitments under the Government action plan on housing and homelessness, Rebuilding Ireland, the sector is earmarked by Government to provide one third of the total 50,000 social rented homes. In 2018, approved housing bodies delivered approximately 38% of social rented homes via build, acquisition and long-term leasing. In 2017, approved housing bodies delivered 2,330 homes, the highest ever total, through new build, acquisition and long-term leasing, more than 1,000 of which came through new construction. This is a significant increase in delivery since 2013-14 when only a few hundred homes were delivered due to the reduction in capital expenditure and the elimination of the capital loan and subsidy scheme.

Since 2010, there has been a significant change in the capital financing of approved housing bodies. A mixed funding scheme has been introduced comprising a capital advance leasing facility, CALF, and payment and availability agreements. This includes a maximum of 30% State capital loan, with the remaining finance of 70% being raised either through the option of the Housing Finance Agency, HFA, or private financial institutions. This new approach of taking on more risk through borrowing loan finance has necessitated significant organisational change and upskilling within approved housing bodies wishing to increase their capacity to provide more homes. This transition to mixed funding for the sector occurred incrementally over 34 years in EU member states, whereas in Ireland we have fast-tracked it within five to ten years.

Since the economic crash, AHBs have been working with private sector developers. An example is completing unfinished estates to make them available for social housing. Alongside these new capital funding arrangements, there has been a range of new statutory, regulatory and compliance requirements for AHBs. AHBs now come under the remit of the Residential Tenancies Act, the Charities Act and HIQA in some cases, as well as the requirements of the voluntary regulation code, VRC, and various covenants of financial institutions, to name a few. These are in addition to the contractual requirements with local authorities comprising the terms and conditions of the capital funding schemes.

Importantly, there are a number of strategic issues which the sector is encountering and will be encountering in coming years. These include continued access to sites to meet targets for delivery, the reclassification of AHBs as part of the local government sector, which is a particular focus for those developing approved housing bodies with significant delivery plans and that wish to reverse classification, access to affordable and cost rental schemes, the new statutory regulation framework and increased delivery of supported housing particularly for older people.

The delivery of housing for people with specific needs remains challenging, particularly given the current restricted nature of homes available. Different approved housing bodies within the sector have different ambitions and capacities. A number of larger approved housing bodies are focusing on significant scaling up of social housing delivery using loan finance, as well as seeking to deliver additional forms of intermediate rental housing. Others approved housing bodies are focusing on consolidation and succession planning. Although approved housing bodies will develop in different ways, the sector will still rely on a coherent policy framework on finance and regulation from the Government to enable the AHBs to play its part in meeting housing needs. We look forward to any questions.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I thank Dr. McManus. I call Deputy Cullinane.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I thank the witnesses for appearing before us on a voluntary basis. I also thank them their opening statements and for being in a position to help us with our work in this area. I will start with Dr. McManus and develop some of the points he made in this opening statement on how approved housing bodies are funded. He spoke of the changes in 2010, I think it was, to a mixed funding. AHBs, however, are funded first of all by a 30% upfront capital loan. That is the capital allowance loan facility, CALF, which comes from the State. The other 70% is then financed by the approved housing bodies themselves. That can come from other borrowings, the Housing Finance Agency or a combination of both. How does it work normally or what is the popular model?

Dr. Donal McManus:

The dominant form at the moment is accessing loan finance from the Housing Finance Agency. As the report of the Comptroller and Auditor General mentioned a few years ago, there was very little finance coming in compared with the Housing Finance Agency. Mr. Hannigan will comment further on that aspect.

Mr. John Hannigan:

It is predominantly from the Housing Finance Agency at present but these models of operation are very new. Although the AHBs have been in operation for 30 years, given this classification, it is effectively a new sector. There has been a ramping up of seeking to attract other funders to come into the market in the past five or six years. We in the Circle Voluntary Housing Body, for example, have just undertaken a loan with Allied Irish Bank. Other AHBs have utilised other pillar banks in Ireland and there have also been those AHBs that have used special purpose vehicles, SPVs, with foreign banks now coming into the market.

The reality is that classification has changed the way we look at things. We need a broader base of funders in this sector to meet the classification requirements. We are progressing that very quickly. At this point, probably 90% of the funding is coming from the HFA, but over the next two to three years there will be a dilution of that through other borrowers coming into the market.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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There is some element of it, and it is quite small, that might come through banks or private investment.

Mr. John Hannigan:

Quite a significant amount will in the next two to three years.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Okay. Where does the Housing Finance Agency finance come from?

Mr. John Hannigan:

My understanding is that it comes from the issuing of Exchequer stocks by the State or borrowing from the wholesale markets by the HFA. The HFA goes to the markets behind the banking system.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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In that case the dominant funding model would be 30% upfront loan, the capital advanced leasing facility, CALF, payment as it is called, and more often than not the majority of the 70% has come from the Housing Finance Agency.

Mr. John Hannigan:

That is right.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The State pays the approved housing body a monthly payment for 25 years. Is that correct?

Mr. John Hannigan:

It is up to 25 years. It can be shorter. There have been some that have been as little as 15 years and others are up 25 years.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The approved housing body would then pay down the loan, and when that is done it would repay the State the 30%. Is that correct?

Mr. John Hannigan:

Yes.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Who owns the property then?

Mr. John Hannigan:

The AHB.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Is there any issue there with regard to State ownership? Much of this started in 1991 so the first stream of housing from that process will be coming into the ownership of the approved housing bodies. Since 1991 these schemes have been funded primarily through State funding, yet the approved housing bodies will end up owning the properties. While it might be illogical that they could decide to do something else with them or one might say that would not happen, essentially the State has no guarantee that these properties will remain as social housing. Would that be a concern? Has Dr. McManus's organisation explored or examined that or is it aware of any debate on this?

Dr. Donal McManus:

We have had debate in the sector. A number of mortgages have come out of the period, especially the capital assistance scheme, CAS-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mortgages?

Dr. Donal McManus:

Mortgages under the CAS, for example, are mortgages where the contract is between the approved housing body and local authorities. Where there is a mortgage in place for 20 years, initially with the capital assistance scheme, there are certain requirements the local authority housing has with the approved housing body for 20 years. Some of those have come out of mortgage. Where they have come out of mortgage with the local authority, the housing associations continue to provide the rental housing to the people on the waiting list. By and large there has been no change for those organisations in terms of their raison d'être. It is also because they are charities. They are not in the business of selling off properties to make gain. Their social mission is to provide social rented housing.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I asked because it is an issue that has been dealt with in the Committee on Housing, Planning and Local Government. A special committee on housing was established after the previous general election and it examined a range of issues relating to housing. One of the main issues was that we do not have enough public or social housing. In fairness to the approved housing bodies, they do not see themselves as filling that gap for the State, but given that the State has not built a large amount of public housing, they fell into providing perhaps more of the social housing that the State provides or has some influence over than was intended. The witness is correct that in some cases it might be unlikely that they would change the use, but there was some discussion in the committee as to whether there would be guarantees built into the contracts, given that the majority of funding is coming from the State, that the properties would remain for public or social housing, and if it was the case that an approved housing body was of a mind to vary the use, sell or whatever it is for whatever purpose, the State would have the first opportunity to buy through the local authorities. However, there is no conditionality in it. Notwithstanding what the AHBs may or may not do or the logic of what they might do, the fact is that there are no guarantees. Once they have repaid the loan and they own the properties, they can do what they wish with them. Is that the position?

Dr. Donal McManus:

In theory, yes, but because-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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It is not a theory. It is the case.

Dr. Donal McManus:

It is the case, but they do not anything with it in terms of selling it. The new regulation coming into place will help as well from that point of view. It is a new regulation being brought in under statute. That will help the process of keeping a link with the social housing by AHBs in the longer term. We would be keen to have those options explored.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That brings me to Dr. Rhodes. Will she expand on that point? What role will the regulation play in terms of ownership of the properties, given that the State played a significant part in making sure these properties were funded and then they are in the full ownership of the approved housing bodies? What protections are there to ensure those properties remain in use for public and social housing?

Dr. Mary Lee Rhodes:

Currently, there are no protections that those properties will remain in State ownership. The legislation went deeply into that point and I believe a great deal of information was provided to this committee in another report regarding the disposal of assets. How to deal with that in the regulation remains a key question for members of the committee and the Department. On the other side, that specific point created issues around classification in other jurisdictions. We do not have an ability to control that now and we could if it is written into regulation, but writing it into regulation has issues as well.

Ms Karen Murphy:

There is an additional safeguard. Each company is a company limited by guarantee and has charitable status. As such it must have within its memorandum and articles of association that it is providing housing for vulnerable people or people in disadvantage or wording to that effect. To get approved status in the first place, the bodies must have that in their memorandums and articles of association, and having it in the memorandums and articles of association is what gives them their charitable status. It is an additional safeguard that exists already in charity law.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That might be the case for some. How many approved housing bodies are there?

Ms Karen Murphy:

There are 270 in our membership organisation and they would all have companies.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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They are very diverse. My point is that some of them might have an ethos but we just do not know-----

Ms Karen Murphy:

No. Under charity legislation they are guided by their memorandums and articles of association.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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If at some point they owned the properties, the charities legislation would not prevent them from using the properties for a different purpose.

Mr. John Hannigan:

Yes it would. They would have to change the memorandum and articles and also seek permission from the Charities Regulator to be able to do something different with the properties. There is a degree of protection around that. In theory, they could change it but the process to go through would be quite convoluted and would require the Charities Regulator to give approval of it too.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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My next question is about the notion that funding for approved housing bodies could go off-balance sheet. Am I correct that it is the stated intention of the Department, or at least its desire, that this would be the case?

Dr. Donal McManus:

We have heard that it wants it off-balance sheet. One of the key players in that is the Department of Finance. It has to give direction on that and on how it wants to go. The Department of Housing, Planning and Local Government would like to do that but we need a commitment from the Department of Finance for it to happen.

Mr. John Hannigan:

Language is important on this because it is quite a technical issue. Off-balance sheet does not mean off-balance sheet. It means it is off the State's balance sheet but it would still remain on the balance sheet of one of the bodies associated with or part of a-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I should have been more specific. I meant off the State's balance sheet. That is the stated intention of the Department but it would have to get approval from EUROSTAT for that to happen.

Mr. John Hannigan:

Absolutely.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Do the witnesses know the position with that at present? The Central Statistics Office, CSO, would have a role and EUROSTAT would have the final say. What opinion do the witnesses have on that as an ambition? Do they know the position with it?

Dr. Donal McManus:

We are not quite sure where it sits at present. I believe there is a working group to be set up in the Government to progress it. We have made submissions both to the Department of Housing, Planning and Local Government and a working group set up under the Department of Finance on this. I am not quite sure of the position with that. In terms of the process, we looked in detail through the reasons for the classification. In some of them the issues can be addressed fairly easily. We thought some were probably more spurious issues. Some are quite challenging issues in terms of the level of finance. Mr. Hannigan mentioned the need to spread the level of finance to other financial options. There are also controls around lettings and allocations.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That is really why I wanted to tease out the first part as to how they are funded. The second part concerns the ambition to get it off the State's balance sheet. I imagine the mixed funding model of 30% CALF funding, and then a bigger portion of the 70% of funding that comes from the Housing Finance Agency at present coming from the private sector, is in part, driven by the ambition to get it off the State's balance sheet. Is it a factor?

Mr. John Hannigan:

Yes, it is, but it is not the defining factor. The requirement is from a business perspective. They are businesses as well as charities. The requirement is to spread the risk in terms of having a single funder. At this time, a large proportion of the funding comes from a single funder. It is and operates as a bank. Therefore, it has all of the same risks as any other bank might have, even though it is State-backed. I have worked in the UK and Irish markets in respect of social housing for a long time and there are other mechanisms by which funding can be obtained at a much lower rate, which would be beneficial in the delivery of social housing in Ireland. These models are different from using HFA moneys. Getting it off the balance sheet is a factor. It was off the State's balance sheet, but it is now back on it. It used to be that for every euro the State invested in social housing, the AHBs could generate €3 to deliver three times the amount. This may be more restricted in the future. It is not definite yet, but the signs are that it is likely to be restricted, particularly when there are potential overruns on one particular type of project versus another on the State's balance sheet and given the longer-term impacts this may have.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Do the AHBs charge market rents?

Mr. John Hannigan:

No, they are below them. In the majority of cases referred to in one of the supplementary papers provided-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I imagine it would be an impediment in trying to take it off the State's balance sheet. If they are not market rents, EUROSTAT might have a concern. It would also have a difficulty with the fact that, at present, it is predominantly State funded. Who allocates the properties?

Mr. John Hannigan:

They are 100% allocated by the local authorities.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The State.

Mr. John Hannigan:

Yes. The rental side is not that much-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Are increases in the sector driven by market rents?

Mr. John Hannigan:

Yes. The issue is not that they are at market rent - there is a subtle issue here - but that they are linked to a market mechanism. If rents are charged that are 40% to 60% below market rates but are dependent on market movements, as they are at this time under the payment and availability agreement, every three to four years they will be marked to the market and whatever is happening in the consumer price index or the market index-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Are rents charged by the approved housing bodies based on similar models to that used by councils-----

Mr. John Hannigan:

There are two types and two elements.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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-----the differential rent system?

Mr. John Hannigan:

There is the differential rent system and the P and A agreement element linked with it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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For the people watching, will Mr. Hannigan explain what he means by the "P and A agreement"?

Mr. John Hannigan:

The payment and availability agreement.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Will Mr. Hannigan explain what it is?

Mr. John Hannigan:

It is the element that is agreed to and approved by the Department for the repayment of debt over a period. It is linked with market rents in a particular area, based on the local authority's understanding of what rents in that area look like. It is usually marked below them, at 80% or 92% of current market rents.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I do not really have a strong opinion on it either way but my point is that if the ambition is to get these off the State's balance sheet, EUROSTAT will look at issues such as how they are not based on market rents, how it is the local authorities that allocate homes and how the rents charged are based somewhat on differential rents and the model Mr. Hannigan has outlined. Is there then the potential that the ethos of the approved housing bodies must change to suit the ambition to take the approved funding for such bodies off the balance sheet? In other words, how do we get to the point where we take the approved housing bodies off the State's balance sheet without having an impact on what they do at present?

Mr. John Hannigan:

It is complex, about which there is absolutely no doubt. It is based on a number of elements that must be market related, not market based. In other words, it fluctuates with the market in some shape or form. That does not mean that we need to change the ethos of the organisations to deliver it. What we need is a change to the mechanisms they operate. For example, Circle, Fold and many other AHBs have been in existence for many years and are charities by nature. They want to continue as charities and will do so. A body does not have to be a non-charity to meet the requirements of the new mechanisms to receive funding. What they have to do is change the mindset about how the mechanisms work. It is complex. As Dr. McManus pointed out, we need to work with Departments to influence the right people in the CSO and EUROSTAT to see that some of what has been said does not add up in some cases. There may be other elements that may require to change or be marked differently for the facilitation.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Mr. Hannigan's responses are helpful and I thank him for them. He may have answered my next question. From his organisation's perspective, does he support the ambition that approved housing bodies be taken off the State's balance sheet? Having listened to what he said, is he confident that this can be done, if it is something he supports, without having a significant impact on how approved housing bodies are funded and deliver and how homes are allocated? Does Dr. Rhodes have a view on the matter from a regulatory perspective?

Dr. Donal McManus:

On the policy side, our objective is to get them off the balance sheet.

Mr. John Hannigan:

On the financial side, we are going to have to change the mechanisms by which we access finance, about which there is absolutely no doubt. On how it might be allocated, we would like to see the very strong partnership we have at present with local authorities continue. My understanding is that it can continue. There are other mechanisms to support rents in the private sector-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The problem is that in other areas outside housing where EUROSTAT has come into conflict with an ambition of the State, certainly where there is a heavy State influence, it is not as simple as that. A few tweaks will not always do it.

Mr. John Hannigan:

No.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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While I need not raise some of the bigger challenges the State has faced, we have seen this. I hear what Mr. Hannigan is saying-----

Mr. John Hannigan:

I am not underestimating the challenge but I do not think it will impact on the nature of the ethos of the organisations involved or the partnership arrangements in place, particularly for the allocation. Even in the private landlord sector, under the housing assistance payment scheme and the rental accommodation scheme, there is still a 100% allocation from the local authorities. That will continue and we want to see it continue in terms of the partnership in place.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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In order that the people who are listening are clear, what is the big advantage in taking it off the State's balance sheet?

Mr. John Hannigan:

It is gearing up to be able to provide more social housing. It is as simple as that.

Dr. Mary Lee Rhodes:

Mr. Hannigan and Mr. McManus have covered the ground ably. From a regulatory perspective and specifically the interim regulatory committee's perspective, we were established at a time when the AHBs were off-balance sheet and much of the regulation process was taking place on the assumption that the sector would be off-balance sheet. It came as a bit of a blow to the committee when this occurred.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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In what year did it occur?

Dr. Mary Lee Rhodes:

At the end of 2017.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Was it as a consequence of EUROSTAT's ruling?

Dr. Mary Lee Rhodes:

Yes. It has been a year since it happened and the initial draft of the regulation was completed in June of that year. It has created some uncertainty in the environment. I have been a member of the committee for five years. One of the main contributions the regulation could make is creating a stable, well regulated and well financed sector that could access private funds to deliver more houses without using Government assets.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I welcome the witnesses and thank them for coming before the committee. It is very helpful to have a discussion with them before we meet officials from the Department. There is a major housing crisis but we have so many agencies involved which is difficult to understand. When I began to list them, I gave up. How many approved housing bodies are there? We also have the Housing Agency, the Housing Finance Agency, the Land Development Agency, 34 local authorities and the land aggregation scheme. That is just the beginning of the list. Coming from Galway in particular, where people have been waiting on the list since 2002, it beggars belief. There is plenty of land in public ownership, including Ceannt Station, the docks and Dyke Road.

It is mind-boggling. How many approved housing bodies are there in total?

Ms Susanna Lyons:

There 547 approved housing bodies registered on the Department's website.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Approved housing bodies registered.

Ms Susanna Lyons:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How many come under Ms Lyons' organisation?

Ms Susanna Lyons:

As of today, 260 organisations have signed up voluntarily to the voluntary regulatory code.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that 260 of the 547 bodies?

Ms Susanna Lyons:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thank Ms Lyons for her clear answers. Why have the others not signed up?

Ms Susanna Lyons:

It is a voluntary environment, number one.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Ms Susanna Lyons:

Number two, the organisations may have already been dissolved and no longer exist. We can identify organisations that are no longer registered with the Companies Registration Office. Organisations may have been set up in order to develop. However, they never developed but they did not de-register.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes, but 260 organisations out of a total of 547 is a sizeable proportion.

Ms Susanna Lyons:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Can Ms Lyons tell me if her organisation has analysed the situation? How many organisations have fallen by the wayside or just decided not to proceed?

Ms Susanna Lyons:

We know that 42 AHBs that are registered today on the Department's website actually are dissolved. We also understand, via the Benefacts database, that 200 AHBs that are not registered with us have approximately €572 million of assets.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that €572 million?

Ms Susanna Lyons:

Yes, that is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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They have not signed up.

Ms Susanna Lyons:

That have not signed up.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Which organisation have they signed up with?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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For the voluntary code.

Ms Susanna Lyons:

With us.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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With the regulatory committee.

Ms Susanna Lyons:

Under the voluntary regulatory code.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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So there are 260 organisations. How many of the organisations have signed up with the regulatory committee?

Ms Susanna Lyons:

Two hundred and sixty organisations.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How many bodies have signed up with the other organisation? That is where I am getting confused.

Dr. Donal McManus:

We have around 270 organisations and a majority of those would have been signed up to the voluntary code.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Are most of the people who have signed up with Dr. McManus's organisation?

Dr. Donal McManus:

Are members. Just to give nuance to Deputy Connolly on the issue about "active". Each-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Ms Lyons was in the middle of answering my questions. Can I hear her complete response first and then I will get back to Dr. McManus?

Ms Susanna Lyons:

I was just saying that there are 547 in total.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I have that, yes.

Ms Susanna Lyons:

Two hundred and sixty are signed up to us.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes, I saw that.

Ms Susanna Lyons:

I was saying that we have visibility-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That means 287 organisations are not signed up.

Ms Susanna Lyons:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Forty-two have fallen by the wayside.

Ms Susanna Lyons:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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If one subtracts 42 from 287 leaves 245.

Ms Susanna Lyons:

Yes. That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What did Ms Lyons say about those bodies? Does 200 of those bodies-----

Ms Susanna Lyons:

Two hundred of those-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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-----account for €572 million?

Ms Susanna Lyons:

I am just going to give the Deputy a sense of the size and scale of them.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Please.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes.

Ms Susanna Lyons:

They have approximately €575 million in assets.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Ms Susanna Lyons:

However, the assets signed up to the voluntary regulatory code account for €1.9 billion. We estimate that we have approximately 82% of the social housing stock covered under the voluntary code.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does Ms Lyons think her organisation is doing well with 82% coverage? What is the ambition? What target has been set for the voluntary code?

Ms Susanna Lyons:

From a voluntary perspective, it is actually quite a high percentage in relation to the number of housing units.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Ms Susanna Lyons:

Obviously, it would be much more beneficial to have all organisations under the remit of a statutory regulator providing the State with full visibility in relation to their investment, the number of homes-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Presumably, that is what we are moving to when we get the legislation through.

Ms Susanna Lyons:

That is what we moving to.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It will no longer be voluntary and everybody will have to sign up.

Ms Susanna Lyons:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What have the bodies signed up to? What do the bodies that have not signed up find so difficult?

Ms Susanna Lyons:

We look at three areas, namely, governance, financial viability and performance management. Each year organisations sign a charter of commitment and in that charter of commitment they agree to comply with the requirements of the code.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Ms Susanna Lyons:

They submit, on an annual basis, details in respect of their governance, finance and performance management, at which point the regulation office conducts a detailed assessment of the information submitted alongside their financial statements and any other available information. We issue a regulatory assessment report or outcome statement to each AHB that is signed up. In that statement, it provides them with an outcome such as "satisfactory" or "satisfactory with key recommendations". More importantly, the outcome is tied into the eligibility for funding. In other words, that the State-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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A body will not get funding if it does not pass.

Ms Susanna Lyons:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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A small percentage has not passed. What number has not passed the test?

Ms Susanna Lyons:

We have only deemed three organisations to be "unsatisfactory", which represents 1%.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Whatever about the 1%, how many people in houses do they represent?

Ms Susanna Lyons:

Eight hundred and forty-three homes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Eight hundred and forty-three accommodation units, to use the terrible jargon that they use now.

Ms Susanna Lyons:

Correct. Unfortunately, they use that jargon.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Ms Susanna Lyons:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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So 843 homes come under that body that has not-----

Dr. Mary Lee Rhodes:

There are three bodies.

Ms Susanna Lyons:

There are three bodies.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There are three bodies that account for the 843 homes. What risks are involved?

Ms Susanna Lyons:

As the Deputy will appreciate from this morning, we identified a number of governance issues in terms of the organisations.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Was that for the three organisations?

Ms Susanna Lyons:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Plus the IRC could not give them the "A" or "B" mark.

Ms Susanna Lyons:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What are the risks for the 843 homes?

Ms Susanna Lyons:

The risk is that the organisations, as assessed by the voluntary regulator, are unsatisfactory in relation to the operation.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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In what way are they unsatisfactory?

Ms Susanna Lyons:

Their governance or financial viability.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Would it be wrong to say there are serious concerns?

Ms Susanna Lyons:

We have concerns, Deputy, yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Are they concerns about governance or financial viability?

Ms Susanna Lyons:

Financial viability. Each organisation has slightly different-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I understand. I want to hear about the general issues for these ones. This is separate from other ones, which would have issues but would pass.

Ms Susanna Lyons:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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But they would still have issues.

Ms Susanna Lyons:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Are the issues so serious that the organisations cannot pass the test?

Ms Susanna Lyons:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am sorry for interrupting Ms Lyons when she was discussing governance.

Ms Susanna Lyons:

This is where the three organisations represent organisations with substantial non-compliance issues, and they are complex and varied. They stem from governance. They stem from related party exposures-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What does that mean?

Ms Susanna Lyons:

-----non-functioning boards-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Non-functioning is very serious.

Ms Susanna Lyons:

It is. That is why we must follow due process and due diligence before we deem an organisation unsatisfactory.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Ms Susanna Lyons:

Within the terms of reference of the IRC, we are only allowed deem an organisation unsatisfactory.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I understand the organisation has no power until we-----

Ms Susanna Lyons:

No power, correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Which is terrible.

Ms Susanna Lyons:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is the big lacuna. What should go into the legislation?

Dr. Mary Lee Rhodes:

We were set up five years ago with the idea that it was in anticipation of statutory legislation.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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On an interim basis.

Dr. Mary Lee Rhodes:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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And interim has become long term.

Dr. Mary Lee Rhodes:

Yes, exactly. We are operating now to the point where we are a pseudo regulator, in fact, and we are finding issues.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Without power the IRC is like a toothless tiger.

Dr. Mary Lee Rhodes:

But we have no real-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Dr. Mary Lee Rhodes:

There are consequences. The funding is the main consequence but there is no way to follow it up.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Has funding been withdrawn from the 843 units?

Ms Susanna Lyons:

Eligibility for funding. Under circular 15/2016, they are now deemed ineligible by the Department. That means that-----

Mr. Seamus McCarthy:

Deputy, just maybe to make a distinction. Capital funding, which is for new units-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes, and revenue.

Mr. Seamus McCarthy:

-----or new homes to be acquired would perhaps not be the regular thing. They would not be getting recurrent funding so that issue does not arise. There is not a scheme in the Vote. It is for new acquisitions that it would be in question.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thank the Comptroller and Auditor General for his clarification. At the same time, for these units of accommodation, serious concerns have been identified. To where have the regulatory committee's concerns about the units gone?

Dr. Mary Lee Rhodes:

Multiple places.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Dr. Mary Lee Rhodes:

As for the terms of reference, the first thing we do is report it to the Department and the Department acts, based on the circular.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What does the Department do?

Dr. Mary Lee Rhodes:

The Department acts on the circular.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Forgive me, it is getting late in the day.

Dr. Mary Lee Rhodes:

I am sorry about that.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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No, it is me. It is getting late in the day.

Dr. Mary Lee Rhodes:

Yes, there is a little bit of an echo. The funding is the first thing. We also inform other statutory bodies that we believe need to be informed.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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In terms of the units, how many entities have been informed? Have Departments been informed?

Dr. Mary Lee Rhodes:

Yes. The Department, the CRA, and the Ombudsman.

Ms Susanna Lyons:

We would have informed the Department and two statutory regulatory bodies.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Which bodies?

Ms Susanna Lyons:

The CRA and the Ombudsman.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does the approved housing body interim regulatory committee anticipate that action will be taken? Has there been any feedback?

Ms Susanna Lyons:

No, because they are statutory bodies and they must act according to their own legal status.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I appreciate the work done on the ground by the voluntary housing associations. I come from a background of thinking that local authorities should provide housing at all times. The AHBs should be additional. Housing should not be based on charity. Charity should have no role anywhere. That is just my personal preference on public housing. In regard to tenure, I always understood that AHBs had discretion on the allocation of housing to tenants. Our guests are shaking their heads. I am delighted, but I did not understand that and I spent a long time at council level, much to my regret. They have no discretion. Is it correct that all the bodies signed up with our guests' organisations take 100% of the names from the local authority lists.

Dr. Donal McManus:

There are one or two issues. I mentioned the CAS in our submission. It started with 25% discretion to house people-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is from where I got the idea.

Dr. Donal McManus:

That is probably from where the Deputy got it. That still applies if a body does not use 100% of the finance from the State. If it brings its own assets to the table, it can still use that 25% discretion. Flexibility is also allowed for the Safe Home Ireland scheme.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I did not catch that.

Dr. Donal McManus:

Safe Home Ireland is a scheme to repatriate elderly Irish people to Ireland. Housing associations and local authorities have been involved, and there is a 25% flexibility in respect of that scheme. Participants in the capital loan subsidy scheme generally draw all their tenants from the waiting list. They are assessed by the local authority-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Dr. McManus used the word "generally". Are all the tenants drawn from that list? Not generally-----

Dr. Donal McManus:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I might follow up on that.

Mr. John Hannigan:

It is 100% based on the waiting list.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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If it is not 100%, it is because of a specific scheme with discretion over a certain percentage such as the 25% discretion attaching to the CAS.

Mr. John Hannigan:

Yes, but it is important to say that the proportion of the homes that are built under that is now very small. It is tiny compared to the other schemes, where 100% of the allocation comes from the local authority list.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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In the context of tenure, I always understood that AHBs were exactly parallel with local authorities. Controlled rent is not quite the same. There are two schemes. First there is differential rent, as with local authorities. The second scheme concerns tenure for life. Is it still tenure for life?

Mr. John Hannigan:

It certainly is in the end.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is great. Again, I see that some housing associations acquire assets through the NAMA or in some other way. Tenure seems to have been reduced. It is for five or ten years, but there is no guarantee of life tenure. What percentage is that?

Mr. John Hannigan:

Again, it is very small. A defined number of properties were under the NAMA scheme.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The NAMA scheme is just one. There are other ways of acquiring assets.

Ms Tina Donaghy:

There was 19 years' tenure under the leasing scheme.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I might follow up on that later. Mr. Hannigan is stating that there is life tenure in the vast majority of cases. There is no difference.

Mr. John Hannigan:

No. Moreover, under the payment and availability, PA, agreement pertaining to the HAP scheme, which is the predominant scheme at this point, it is for life.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I understand the reclassification has divided approved housing bodies into tiers 1, 2 and 3, depending on their size. What percentage is accounted for by tier 3?

Ms Susanna Lyons:

It accounts for 73%.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is the only tier that was reclassified, is that correct?

Ms Susanna Lyons:

Some 14 of the AHBs in tier 3 were classified in December 2017.

Mr. John Hannigan:

The committee should also know that this was the first tranche of work done by the CSO. The latter has started the second tranche of work on tier 2 and will eventually look at tier 1 as well. Whatever opportunity there might be for tier 3 bodies to return to where they were or to acquire a different classification, as a result of how the others are set up, if they are to be designated as on the State balance sheet, the likelihood is that they will never be removed.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mr. Hannigan has already clarified the problem with that. It restricts how housing bodies borrow. Due to changes in funding, housing associations will rely on funding from the private market in future, from whatever source. Is that correct?

Mr. John Hannigan:

Certainly we hope to expand borrowing from that area, as opposed to purely from the HFA.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How will the loans be paid back if the differential rent is maintained?

Mr. John Hannigan:

This is where the payment and availability agreement comes into play. That is the largest part of the repayment process, even with the HFA. The tenant only pays the differential rent. The local authority pays the amount set in the payment and availability agreement.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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This is the HAP scheme under another name.

Mr. John Hannigan:

One could say it is similar, but it is not the same.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What is the difference?

Mr. John Hannigan:

The HAP scheme tends to be short-term. It is in the private sector and is linked directly to the market rent. It is also a different percentage.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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This is different in the sense that the housing associations offer tenure for life.

Mr. John Hannigan:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is very good. This is also linked to the market, but the proportion is a bit smaller.

Mr. John Hannigan:

Yes, it can be.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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However, Government policy is to house people through the HAP scheme or via housing associations. That is, it relies on getting money through the market and plays around with the rent a little bit. Is that right? The gap between what the tenant pays and the market rent, which is not sustainable, is paid by the taxpayer.

Mr. John Hannigan:

Through the CALF.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Absolutely. As such, this is the HAP scheme under another name, albeit with a little bit more protection for tenure.

Mr. John Hannigan:

I would suggest there is a lot more protection.,

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I agree. I take that back. There is certainly a lot more protection for tenure, but not where rents are concerned.

Mr. John Hannigan:

Actually, the rent protection for the individual is the same as that offered by local authorities.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am talking about the gap, which has to be paid for by the taxpayer.

Mr. John Hannigan:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The maximum HAP rent for a certain category in Galway is €1,000. There is no way a tenant could get property in Galway for that, so he or she has to come up with €500 out of their own pocket. These used to be recognised as under the limit. Now they are over the limit and that is encouraged.

Mr. John Hannigan:

That does not happen in our sector, absolutely not.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What happens in Mr. Hannigan's sector?

Mr. John Hannigan:

In our sector everything to do with finance is based on what can be afforded under the payment and availability agreement, which is State-backed and paid by the local authority, and the differential rent. If the model does not deliver the property in that envelope it does not get delivered. We do not actually deliver it.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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A tenant in this sector does not have to pay anything like the HAP contribution. That is a big difference.

Mr. John Hannigan:

No, absolutely not. He or she will only pay the differential rent. That is based on the local authority whose area the property is in. Depending on what part of Galway it was in, for example, the property the Deputy referred to would be under the Galway scheme. The contribution would be based on the percentages that the local authority charged.

Dr. Mary Lee Rhodes:

To come back to a question the Deputies asked earlier, there is another very large difference between the HAP scheme and what is going on with the payment and availability agreements and the CALF. The funding that comes via the payment and availability agreement is being used to build up an asset base owned by charitable organisations, whereas the HAP goes to private landlords. That is not a public asset. The model of the CALF and the PA agreements creates a charitable asset that can only be used for charitable purposes. The HAP goes directly to private landlords, for the use of private assets and for private gain.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What is the overall debt of the voluntary bodies?

Ms Susanna Lyons:

The social housing assets are worth €1.9 billion and the deferred income, that is, Government grants, is €1.3 billion, with long-term loans raised through private finance amounting to €281 million.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that €281 million for all of the-----

Ms Susanna Lyons:

I want to preface that. We only have that level of detail for the large tier 3 organisations. The numbers I have quoted there are for just 15 tier 3 organisations which represent most of the stock we see.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can Ms Lyons go through those again? She mentioned €1.9 billion.

Ms Susanna Lyons:

That is the value of the social housing assets.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That figure refers to assets. The question was about debts, but Ms Rhodes threw in the assets figure.

Dr. Mary Lee Rhodes:

The debt is the second figure, €1.3 billion, plus €281 million.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thought the figure of €1.3 billion was the value of the grants.

Ms Susanna Lyons:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What is the €281 million?

Ms Susanna Lyons:

That is the outstanding value.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The figure of €281 million is the outstanding loans for the-----

Ms Susanna Lyons:

The €281 million is the private financing lent to those 15 AHBs.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is debt.

Ms Susanna Lyons:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It is €281 million in debt in respect of those 15 organisations that account for most of the housing in tier 3.

Ms Susanna Lyons:

That is correct.

Mr. Seamus McCarthy:

For clarification, most of that lending is from the HFA; it is not private lending.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The AHBs are, however, striving to get finance from private institutions.

Mr. John Hannigan:

Absolutely, we are.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That would allow the organisations to borrow more.

Mr. John Hannigan:

It would and also allow us to generate more social housing assets.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I would love to hear the words "public housing as of right" used.

Mr. John Hannigan:

I am happy to use "public housing".

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I would like some details on the sinking funds that were mentioned earlier.

Dr. Mary Lee Rhodes:

Is Deputy Connolly asking me to explain what a sinking fund is?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes, I am.

Dr. Mary Lee Rhodes:

A sinking fund is an account built up by an AHB for future use. It is usually for future maintenance of the assets. There would be depreciation of the houses on one hand, taking away value from the ability to save up, a sinking fund-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does that come under the remit of the approved housing body interim regulatory committee?

Dr. Mary Lee Rhodes:

We would look at the numbers.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What has been found in respect of the sinking fund? Is it adequate?

Ms Susanna Lyons:

We are only advancing that. As I stated, in respect of designated sinking funds for the 15 organisations, there is €57 million on the consolidated balance sheet. That is very close to the cash recorded as well, which is about €60 million. On performance and sinking funds, we are very aware that organisations need to invest in their housing stock. They will have planned maintenance, reactive maintenance and major repairs. In December just gone, we released the performance standard. In that context, the regulator expects AHBs to have a sinking fund provision in place. That means a stock condition survey has been completed. That will inform the executive and the board as to what needs to be planned in respect of cyclical reactive maintenance over the next 25 to 30 years.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The plan is necessary for the physical maintenance of the housing and the money needed for that is the sinking fund.

Ms Susanna Lyons:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The role of the approved housing bodies interim regulatory authority is to monitor that and ensure there are sufficient moneys in the sinking fund. Where does that monitoring stand?

Ms Susanna Lyons:

We have seen a significant improvement in the provision of sinking funds over the past two years.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Will Ms Lyons spell out the practicalities? I am sure it is improving because that is why she is there. She comes across as very competent and professional. Where did the approved housing bodies interim regulatory authority start? What did it find out? Where are the sinking funds at now and what is required?

Ms Susanna Lyons:

That is a very good question. We started out with about 40% of organisations reporting they had a sinking fund in place-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Of some sort.

Ms Susanna Lyons:

Of some sort. What some organisations were not able to tell us was whether the amount within the sinking fund was in any way, shape or form adequate to maintain homes to an appropriate standard.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There were 40% of organisations reporting sinking funds in place to begin with. This means that 60% had no such funds.

Mr. John Hannigan:

I think it is important to point out, and I do not think that my colleague will mind me saying this as a former finance director, that in the early days a sinking fund is probably not needed. That is because the properties are new. Sinking funds are needed, though, as time passes and, normally, they are ratcheted up over time.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I have another question for the approved housing bodies interim regulatory committee. Regarding the 60% of organisations with no sinking funds in place, where do matters in that regard stand? When was it found out that the number in compliance was 40%? What is the approved housing bodies interim regulatory authority's target?

Ms Susanna Lyons:

According to the annual report, 94% of tier 3 organisations now have a sinking fund in place or are able to demonstrate they are generating enough income to provide for those funds. Some 73% of tier 2 organisations have stated that they now have a sinking fund in place, as do 72% of tier 1 organisations. Over the four years that the regulation has been in place, we have seen an improvement. This does not mean we can state that all of the moneys in place are adequate. The next step is to ensure those organisations complete stock conditions surveys. Those surveys will provide organisations with a full and detailed schedule of planned and cyclical maintenance over a period of 25 or 30 years.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We have 94% with a sinking fund in tier 3. Is it an adequate sinking fund? Are there any issues there?

Ms Susanna Lyons:

I cannot identify an organisation at the moment that we would state we have a concern over regarding the provision of the sinking fund or the ability to generate funds.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is good and that is in tier 3 where 94% of the organisations have a sinking fund in place. Will there be follow up with the 6% of organisations that do have a sinking fund in place?

Ms Susanna Lyons:

Absolutely, we work very much with the organisations.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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In tier 2, 73% of organisations have a sinking fund. Where are we at with the adequacy of those sinking funds and the follow up?

Ms Susanna Lyons:

At the moment, only 64% of tier 2 organisations have conducted a stock condition survey.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Only 64% have done the survey.

Ms Susanna Lyons:

Only 64% of the organisations have completed a stock conditions survey. Until we have the results of those surveys, we will not be able to definitively state to Deputy Connolly that those organisations have enough money in place.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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When will that be in place? Does Dr. Rhodes wants to come in?

Dr. Mary Lee Rhodes:

I want to clarify that there are two things going on. One is the sinking fund-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I understand that.

Dr. Mary Lee Rhodes:

-----and one is the stock conditions survey. Those two aspects together will give us the requisite information.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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They are interrelated.

Ms Susanna Lyons:

They are.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Regarding the 64% of organisations that have done the stock survey, is there a target for the remainder When will it be done?

Ms Susanna Lyons:

It is a voluntary code, so we can only persuade and influence. The issuance of the performance standard in December allows time for organisations to become compliant. It is scheduled over a period of two or three years.

Dr. Mary Lee Rhodes:

We are aiming for 100%.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am extremely critical of local authorities. I am concerned with holding them to account and all of the public service. This is a body that went unregulated. Charity is good and I know the work on the ground. The philosophy is good. The work of the Comptroller and Auditor General and his staff, however, in identifying that this was an unregulated area means we now have the approved housing bodies interim regulatory authority in place. Fault also rests with us in Government for not having legislation. The AHBs did not come under the Private Residencies Tenancies Board for a long time. How long have the AHBs been covered by that body?

Dr. Donal McManus:

Since 2017.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Since 2017, which meant there was a huge gap. There was no regulation either. The regulation in place now is voluntary, and even within that code only a certain number of organisations are doing what is necessary. Human rights did not come into it. At least local authority tenants had the benefit of housing as a right until fairly lately. That did not apply in this case. The AHBs were in a limbo land in respect of tenant disputes, etc.

Dr. Donal McManus:

Deputy Connolly mentioned the lack of regulation. There was regulation of different functions within AHBs at different times. Local authority contracts were almost regulation by contract. We now have a helicopter view being taken by the approved housing bodies interim regulatory authority. Different functions, therefore, were being regulated but not in the form of oversight of the sector. I am just clarifying that point.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Chair is being very generous. The turnover rate for houses going back into stock is about six to eight weeks.

Ms Karen Murphy:

The average is about eight weeks.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What is the maximum time a house would remain empty?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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One of the our guests has a commitment and is obliged to leave. The rest of are okay to remain a little longer. They should feel free to go. We were late starting and we understand they might need to leave.

Dr. Mary Lee Rhodes:

Are there any other questions for me?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I imagine that the colleagues of Dr. Rhodes will be able to answer our questions.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I apologise for the late start because it threw out the schedule. I hope approved housing bodies interim regulatory committee will be a full regulated body one of these days. I call Deputy Catherine Murphy.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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My final question was on the turnover of houses and I had asked it before there was an interruption. What is the maximum time a property is empty?

Ms Karen Murphy:

There would not be a maximum time set.

Mr. John Hannigan:

The Deputy is asking what is the longest time in practice.

Ms Karen Murphy:

The average is 8.3 weeks. In general, the sector tends to turn houses over.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I congratulate the AHBs on that. They might talk to the local authorities about their methods. We have 60 to 80 such houses empty in Galway and we have lost the information as to when they became empty. As the crisis worsened, we lost the date on which they became empty. Some of those houses, however, have been empty for two years and some for five or six. Well done on the turnover time.

Ms Susanna Lyons:

We do have some figures in our annual report that give the average length of voids. It is 11 weeks-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I saw six weeks, eight weeks and a variation. Anyway, I thank the witness.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Did we get a copy of the annual report?

Mr. Seamus McCarthy:

It is the document that is on screen at the moment.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I have it in front of me.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I thank the witnesses for their attendance. I am sorry for the delay in getting started. I remember the debate on the voluntary code. Some of us were very enthusiastic about making it a statutory code and being much more ambitious and quicker in doing that. I understand there is a bedding-in period but I refer to the ability at the time this was debated to get European Investment Bank money and other moneys. We were in the middle of a crash and it was early in the term of the then Government and it was becoming obvious that there was going to be a housing shortage. Maybe three or four years before it became very obvious in some parts of the country, it certainly had become very obvious early on in the area I represent. It was a lesson on where money can be got, rather than a matter of being told there is no money. The European Investment Bank had significant funds.

One of the impediments at the time - it is still an impediment - was that because approved housing bodies are governed by the charities regulations, they were precluded from making a loss. That was the impediment to being able to leverage the funds. The witnesses have said the Department of Finance will have to be involved when the code becomes statutory. Reference was also made to the ability to draw down finance. How will the impediment associated with charitable status be overcome? Does it involve a co-guarantor of the loan? How will it work practically?

Mr. John Hannigan:

Most funders, when lending, require one to make a degree of surplus so there will be what they call "interest cover". Thus, if one defaults, there is an amount of money large enough to allow the funder to take its interest, at least in terms of the year or period question. There is a covenant requirement. In the majority of cases, the funder does so much due diligence in respect of the organisations that the chances of a body to which it is lending making a loss should be reduced significantly. Where a loss is made, the circumstances are normally considered over a period of time. The Charities Regulator has also got to the point where, in any particular year, it is does not allow the organisation to budget for a loss. It does not like the organisation to plan for a loss. If it makes a loss, regard is had to how it has performed over a period and whether it has reserves that can cover it for the period in question. Obviously, if an organisation continued to make losses over a longer period, it would probably go into a default situation. The regulator would be asking why that is occurring and whether it is down to poor governance, poor management or financial viability issues. Our colleagues behind us are expert in this area, as they have already demonstrated.

Overcoming the problem involves consideration of the value of the assets. If one defaults, the bank, regardless of whether it is a State bank, the HFA, or another, will take possession. That has never happened in this sector in Ireland. Actually, it has never happened in the sector in the United Kingdom either. That sector has been in existence for roughly the same time, but on a much bigger scale and involving much bigger figures. At this point, we have a very well-run sector. Very shortly, I hope, it will have a statutory regulation. There is still quite a lot of oversight by local authorities and the Department in terms of each scheme that we have to go through. There is a significant amount of due diligence work done by both local authorities and the State in terms of each scheme that we provide at this point in time. The circumstances are also examined by the relevant third-party bank, be it the HFA, EIB or a private lender such as Allied Irish Banks or Bank of Ireland. Therefore, there is a significant amount of due diligence done that I hope will mean we will not see a default that would put the assets at risk.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Obviously, there are significant amounts of money on deposit in credit unions and pension funds. Personally, I do not have any issue with public housing or housing that comes from the public waiting list being delivered through voluntary housing bodies, approved housing bodies or others so long as there is security of tenure and the rents are regulated and affordable. Can we have more of it, please? That would probably be my call on it.

I am aware it was going to be tier 3 in the first instance, and then tiers 2 and 1. In my constituency, I have quite a bit of experience right across the spectrum in this regard. The bigger organisations tend to be the ones that run into fewer problems. It might just be in my area but I certainly have come across serious problems with some of the organisations further down the food chain. There have been cases where rents were not collected, insurance was not paid and there were very significant risks. What is the timeline for the regulation of tiers 2 and 1 to give some guarantees? There are problems and I suspect the regulators will run into serious problems with some organisations.

Ms Susanna Lyons:

We have oversight of quite a substantial number. There are 179 tier-1 organisations and 50 tier-2 organisations regarding which we have visibility. I mentioned earlier that we have a premise of governance and financial viability. One of the key tasks of the regulation office is to ascertain whether organisations are operating with a surplus or deficit, whether they are operating with a deficit for more than two or three years in a row, what their liquidity looks like, and whether they are generating positive cashflows. When we talk to the organisations, we indicate they will not make it in the long term if they are not able to pay in the short term. We have come across organisations that have struggled in regard to financial viability for reasons that the Deputy identified. Maybe they did not collect rents in the most effective or efficient way, or maybe they had a percentage of voids or had to pay a large maintenance bill. When we are speaking to the tier-1 organisations, we speak in that language and ask them to ascertain whether they are sustainable, where the risks lie, how the risks are managed and how their financials are managed. Regulation is not just about compliance; it is also about education and putting in place some management tools to help the organisations reach their objectives.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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So there is oversight.

Ms Susanna Lyons:

There is.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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But just not to the extent that will eventually be the case.

Let us consider the asset base. Let us say there is a fairly decent asset base and 30 houses built in the 1990s that are coming towards the point where there will no longer be a mortgage on them. I have come across cases where bodies have quite a bit of money on deposit, more than they would require for a sinking fund, and where they are functioning very well, collecting the rents and all the rest of it. What is the position on the reinvestment of that money? The bodies cannot keep accumulating where the asset could be beneficially used for the same purpose.

Ms Susanna Lyons:

This is the balance between being a regulator and overstepping. These are independent legal entities. It is up to the boards and executive to decide how and when they are going to reinvest.

Certainly, when we sit down with organisations and we see very high cash balances, we ask if that is the most effective use of resources, whether they be charitable resources or housing resources. For the larger organisations, it would be asked if that fits with its treasury management policy. There seems to be no benefit to an organisation just holding on to such moneys and not reinvesting and providing more homes where that type of money is available to invest in a community or parish to deliver more. In some cases it may be that they do not have the capacity to do so themselves. They may in fact be run by volunteers.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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As we go down to the tier 1 organisations, that is typically what will be found.

Dr. Donal McManus:

In more recent years organisations have merged together and are using their former organisation to help deliver another. Progress is slow. Fewer than 20 organisations have merged but the trend now is that more boards, for succession planning purposes, have decided to finish and to transfer to another AHB. That has happened in a few cases. It is small at the moment but we think that is a trend going forward to manage the assets over the long term.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The allocations are made from the housing waiting list but there is a difference in how that happens. For example, typically, the local authority sends a list of names that can be selected from. Some organisations will do courses such as tenancy courses. One criticism of the sector is that there can be a degree of cherry-picking and that the local authority will perhaps not do the tenancy courses and end with people who have more difficulties, and that is a more difficult situation to manage. How would the witnesses respond to that?

Ms Tina Donaghy:

If I may respond, I disagree. If we do receive large numbers of nominations at a time, it is because we probably have a new development to let. If a development of 20, 30 or 40 units at a time is being let, a level of refusals is being planned for various reasons. That is the reason, on occasion, that we would be sent a list of names to allow for any slippage or refusals. We work in partnership with the local authority. We work, not only to house people but also to meet their needs, not only now but into the future. We look at tenancy sustainment issues and whether people are best placed to create a new community, so to speak, so that there will be cohesion within the community and rather than putting people together who are going to cause conflict. We work in partnership with the local authority. I have examples from my own organisation where we have saved nominations that we thought possibly might not be able to sustain a tenancy in an environment independently. We work with the local authority, accept the nomination and the referral, and work with it to sustain tenancies. Sometimes they do not succeed but we work with the local authority as well to find an alternative that will succeed.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Okay, I thank Ms Donaghy for her response. In terms of a social mix, where there is a very big development, although we do not have many obvious examples of that, as rather than hundreds of units, a big development would be perhaps 100, where does that fit in with the allocations policy? I had understood initially that when those were set up, the 25% was to allow for us to get to a point where it is almost a cost rental, but that was not the case.

Ms Tina Donaghy:

I think there was an aspiration to get to those mixed sustainable communities both in terms of economic and other measures. However, within my organisation we have larger numbers. We will have a development coming up at the end of this year involving 103 units. The intention is that they will all be aimed at older people, those aged 55 and older. I do not think we have any big examples where we have delivered mass housing accommodation for families.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Is it sometimes in conjunction with other components within the same development?

Ms Tina Donaghy:

Yes, and we work with other organisations and providers to ensure that we are investing in the community as well to make sure there are other community facilities there and buy-in from other community organisations to create community cohesion.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I thank Ms Donaghy.

Mr. John Hannigan:

In terms of the cost rental situation, as it were, the 25% was never aimed at that because the 25% would have been on the same rent calculations as everybody else, so it would have still been a differential rent or a fixed rent based on the delivery of the capital assistance scheme, CAS, for example. It would have been at a very set level. It was never to bump up the potential income streams, as it were, or even the types of tenancies that might be there, and it was more to do with the social cohesion element of it, where there may be individuals who cannot live with others for a particular reason or who were not able to. That element of the 25% is gone. It is now 100% in the vast majority. In our programme at the moment, we have about 350 houses which will be delivered in 2019. Of that, probably about 60 properties come under CAS, so the kind of differentials there would be in terms of the numbers under that scheme can be seen. Under CAS, we still take 100% from the local authority as well.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I know the witnesses are looking at another draft of the legislation. Is there any indicative timeline the organisations are working towards? Have they been given any indicative timeline?

Ms Susanna Lyons:

I cannot really answer the question. We were given a number of different timelines and it might be best to ask the Department about that. The interim regulatory committee was furnished with a copy recently, which is due for discussion at our next board meeting on Thursday. We are not able to answer the question on exact timelines. That question is probably best answered by the Department.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Okay. Three approved housing bodies were deemed unsatisfactory. That is a pretty serious situation for it to be without a consequence. That is with the tier 3 organisations. Even with the current oversight, what kind of percentage are we looking at with the tier 1 and 2 organisations? Would a significant number or a small number fall into that category? I accept the committee does not have full oversight.

Ms Susanna Lyons:

Of the 247 that were assessed last year, and it should be remembered that it is in a lagged environment, the three unsatisfactory organisations were not just for tier 3 but for the entire sector.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Right, I misunderstood that.

Ms Susanna Lyons:

We have full visibility. There are 14 AHBs in engagement, which only works because the AHBs work with us, given that it is still only voluntary. We put action plans in place and the AHBs want to ensure compliance and improve aspects that have been identified as weak. I do not envisage another organisation moving into the unsatisfactory category unless within this current assessment cycle we identify something that we have not seen before.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Okay. Let us assume, for example, within the next year that this legislation is in place, what advance work has been done or can be done to figure out whether private money will be attracted to the approved housing bodies?

Would that scale up the output in a significant way? It takes several years to get houses from the point of concept to delivery. I am sure Mr. Hannigan can tell me more about that than I can tell him. What would we be looking at in that context?

Mr. John Hannigan:

I can give the Deputy some concrete information on that. A number of tier 3 groups have been working with the ICSH to examine creating mechanisms by which private finance can be generated. We have gone through several phases, the first phase was examining the feasibility of a special purpose vehicle which was worked through the PwC and the ICSH members. We are now effectively into phase 3 where we have gone out to the market. We have had term sheets back from private banks outside the HFA, and I can say that without a doubt we have had offers of nearly €2 billion to €3 billion worth of funding overall from that. There is a huge appetite to work with the public housing sector in Ireland. That is based on the fact that it is now part of a global market. Investors from other countries, pension schemes and large equity investors, as well as our own pillar banks, see that there is a return that can be made which is reasonable spread over quite a long period of time, has good security behind it and, most importantly, that there is a professional group of people involved in the delivery and management of that public housing.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The organisation could not take up all the money that is available.

Mr. John Hannigan:

If we were successful with the level of planning we have currently, we probably could. The intention at this time is to meet, at a minimum, the requirement of Rebuilding Ireland, which is the 15,000 properties we have to produce, but we suspect the larger associations in the tier 3 group could probably exceed this over that period.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Is the lack of a statutory code an impediment?

Mr. John Hannigan:

It is not an impediment but we have been told that if there was a statutory regulation, it would help with the pricing of it. It has not stopped us being offered money at reasonable rates under the voluntary code, but a statutory code would probably make that a little cheaper and it would also give much more security to the funders as well, so it is an important element. It is something for which the sector has been asking for quite a time.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Mr. Hannigan said that a statutory code would make that a little cheaper. Is he referring to interest rates or the duration of loans?

Mr. John Hannigan:

It is more the interest rates and the cost of repayment.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Does Mr. Hannigan have any indication of what that difference might be?

Mr. John Hannigan:

Not particularly at this time but it is a discussion we have been having with the funders in respect of it.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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That might be commercially sensitive.

Mr. John Hannigan:

It might well be.

Dr. Donal McManus:

When we did this project a number of years ago, one of the issues was that if we had the units ready, we could put the money into the scheme. If we are waiting for a new build, that takes a while, but initially our project was to have the finance and also the vacant units and properties to deploy the money into those properties. That is still is there. If the money and properties are there, we can do that more quickly than going through the construction process. That is where we started off the project from, that is, with vacant properties, institutions that wanted to transfer their properties, and having finance at the other side. It is not always neat how that happens but certainly that is the objective.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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There is a significant amount of State land that could be used. We could get to a position where we could have an affordable housing stream that has been ramped up considerably within a reasonable time.

Mr. John Hannigan:

If there was a scheme at this time that was financially viable and which allowed the land usage to be delivered at a reasonable pace, I have no doubt that funding would not be an issue.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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I thank all the witnesses for coming in. Dr. Rhodes, who left when I was out of the room, made the comment that the funding was going towards a charitable asset, whereas with the HAP scheme it is for a private gain. Following on from that, we hear that private funds have been invested. What I heard an hour ago is slightly different from what is being said now. On the one hand, we have a charity and, on the other hand, we have billions being invested in it. We have headroom in terms of accounts and cash assets. I had not intended speaking on this but I had a problem with this recently when I noticed an approved housing agency has an office in a very expensive part of Dublin and I wondered who was paying for it. In terms of auditing, I know we cannot have full insight but I always get concerned when I hear the description "not-for-profit" mentioned because I find no profits will be made if people are paid enough to get rid of them. On one hand, we have this charitable asset and, on the other hand, we have this private gain, but when we drill down into this, private people will gain from this in terms of investment. In terms of security of investment, if there is a reduction in the interest rate, this is a good place to invest money because it is, excuse the pun, as safe as houses. I do not like speaking about a witness who has left but it would have been helpful if Dr. Rhodes had stayed in order that we could have teased out this issue of a charitable asset versus private gain. To my mind, there are many private hands in the bucket here. Mr. Hannigan might comment on that.

Mr. John Hannigan:

The point that was made was the fact that the organisations in the AHB sector are predominantly charities. Almost all of them that are registered both with the regulator and through the ICSH are charities. The asset is managed-owned by that organisation. It is not owned by anybody else. It is funded in different ways. Some of it is funded through the State, some of it is funded through the Housing Finance Agency, which we should bear in mind is a State body, and some of it is funded through banks. There are different types of funding institutions that are similar to banks. Pension funds are similar, there are private equity firms that operate across the world, and there are other international banks such as Nordbank and so on.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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We hear of real estate investment trusts, REITs, being the big bad wolf that is coming into the market, but I put it to Mr. Hannigan that his organisation is not much different.

Mr. John Hannigan:

They each have a significantly different ethos. The REITs are there to-----

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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I ask Mr. Hannigan for the top five differences between them.

Mr. John Hannigan:

Yes. First, the REITs are there to make money, and unashamedly so.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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Do these people who want to give Mr. Hannigan's organisation €2 billion to €3 billion not want to make money?

Mr. John Hannigan:

They want to get a return on their investment-----

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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Yes. That is making money.

Mr. John Hannigan:

-----but they have to compete to give us that money whereas the REITs are doing something.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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They are just throwing it in.

Mr. John Hannigan:

They are buying it up.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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Yes.

Mr. John Hannigan:

They are also dealing with charities. Our members are charities. What we do is charitable in nature and the ethos of what we do is regulated by the charities regulator as well as the AHB regulator.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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Can we have a breakdown of the salaries and rents? Are we allowed to have that?

Mr. John Hannigan:

Most of the organisations would publish them in their accounts at this time because they are required to do so under the financial reporting standards, FRS, 1 and 2 and other accounting-----

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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They are. In terms of having offices in Dublin 2, I do not see why anything would need to be discharged from Dublin. I am sure one of witnesses in the room is in that office but I cannot understand how a charity that is providing housing at a time like this could justify having an office in-----

Mr. John Hannigan:

There are many charities in Dublin 2 that are discharging quite a lot of-----

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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Yes. All of them concern me, to be honest.

Mr. John Hannigan:

Much of it probably has to do with historical reasons as to why they are there.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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This is a new office.

Mr. John Hannigan:

A new one.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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It is newish.

Mr. John Hannigan:

I am not sure what the Deputy is talking about and I cannot talk about somebody else. The reality is that being close to where decisions are being made is also something is that a very important-----

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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It is a common excuse.

Mr. John Hannigan:

Okay. That may be the Deputy's perception but it is a reality in terms of delivery of operations as well. It is also important to be able to make contact with respect to relevant decisions being made in Departments, which are all mostly located in Dublin. There are differences between these organisations. Organisations that are established for charitable purposes are in place to provide a social service, and that is what they do.

Dr. Donal McManus:

The Deputy mentioned REITs, and obviously they make a return-----

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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We could talk about this all evening but I just wanted the top five differences between the two.

Dr. Donal McManus:

One fundamental issue is that the REITs make a return for their shareholders who run their organisations and their target group would not be low to middle-income people primarily from that point of view. The REIT model may not be targeted at low to middle-income households in terms of delivering housing-----

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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Okay. Mr. McManus is talking about that aspect.

Dr. Donal McManus:

-----and they have to make a return to their shareholders. With respect to the shareholders in the housing associations, there is a prohibition on any surplus or dividend, and any surplus or dividend that is made is in the public interest and it goes back into the organisation, so it is ring-fenced from that point of view.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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It goes back into the pot.

Dr. Donal McManus:

That is the big difference in the target group, namely, the motivation and the return that is put back into the public housing sector in the public interest.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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At the end of it, when one leaves the house that the AHB has provided for them because they have moved on to the next world or whatever, does the AHB own that asset at the end?

Mr. John Hannigan:

Yes.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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The AHBs' business model is to provide social housing at the minute. Are there plans to expand that remit into affordable housing and perhaps even accommodation for the ageing population? Are the AHBs looking at that aspect or is it purely social housing? Perhaps that has been answered while I was not here.

Ms Tina Donaghy:

It is social housing and maybe public housing as Deputy Connolly mentioned earlier. Fold Ireland provides housing for older people and we promote independence to enable people to live in well designed, quality accommodation for as long as possible, to lessen the burden on the State, to keep people in their homes and to be able to bring services to them to enable people to remain healthy and independent for as long as possible. Our markets changed here significantly and the private rented sector is on the increase because people cannot afford to access affordable accommodation or to purchase accommodation. We need to look at getting people who need quality accommodation to live in at affordable rents into public housing. That is where we all need to be aiming towards because our economy needs that. As was said, the people who do those jobs need somewhere to sleep and we need affordable accommodation for people to live in from across all sectors. Our accommodation is not affordable at this time if one is not in public housing.

Mr. John Hannigan:

It is important to say that doing it would be on the basis of charity. It is not for profit. I know the Deputy is saying that we pay ourselves enough money and then there are no profits-----

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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I know but I am just trying to get to the-----

Mr. John Hannigan:

-----but it is from a charitable perspective as well that we are set up as charities.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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I am hypersensitive about charities to be honest.

Mr. John Hannigan:

I can understand why but the reality is that although it is on a charitable basis - I know one of the members said earlier that she does not like the fact that it is done on a charitable basis - it is done on a professional basis as well. We have professional people providing a charitable approach but something that is beneficial for the State overall.

Photo of Kate O'ConnellKate O'Connell (Dublin Bay South, Fine Gael)
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I get concerned when charities refer to people as markets. To me there is a contradiction there. That is it, I have found out enough. I thank the witnesses for their time.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I want to put a few questions to follow through on a few points that were made. Deputy Connolly touched on it earlier that decades ago all of the public housing was provided by local authorities. What is the need for the AHBs? Why are the local authorities not doing it? Why are the AHBs here and why do they exist?

Ms Tina Donaghy:

If I can answer, I can take that question.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am asking the big question because in every local authority in Ireland this question gets asked every time they have a housing plan. It is all being done by the AHBs and local authorities are getting no look at building the houses and they have the proven track record for decades. Maybe it is public policy to not let them do it anymore, I do not know. Why are the AHBs here? What went wrong with the system that the AHBs had to come in and take over?

Ms Tina Donaghy:

I am here because housing is my profession. It is the only profession I have ever worked in. If I worked in a local authority I might be working in housing for a couple of years but I could be moved to roads, planning or-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Or parks or whatever.

Ms Tina Donaghy:

Housing is what I do. I am a housing professional. That is what my career has been to date and I have only ever worked in the delivery of social or public housing.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I did not mean Ms Donaghy personally. I mean why-----

Ms Tina Donaghy:

But that is why we are here.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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-----do AHBs exist?

Ms Tina Donaghy:

We complement what the local authority does , especially in the downturn. A lot of the local authorities had their housing sectors decimated and there were not many people left. During the downturn we continued to grow and to provide accommodation for people from the local authority waiting list. We work in this sector to complement what they do and to deliver purely housing. That is our only remit.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I understand the question gets asked at every council meeting around Ireland every year.

Dr. Donal McManus:

On why we are here, there were gaps in the housing system back in the Chairman's time, even as local-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is not very long ago.

Dr. Donal McManus:

There were gaps in the housing system and the sector responded on the special needs side. It could bring support on housing in the Chairman's area as well. There was a lot of local activity carried out by voluntary organisations. Initially we majored on special needs and then we moved into more family type housing because housing management added value. The Chairman is asking why we are providing family housing and we are doing so because people in the sector such as Ms Donaghy and others were housing professionals who provided a house management service and assisted the local authorities, even in rejuvenation and rehabilitation schemes so there is added value there. The first early social housing was in the sector by The Iveagh Trust prior to the formation of the State and they were big blocks of 300 to 400 units which were successful. Local authorities took over but the sector majored on special needs and then moved in where it felt it could add something. We are not trying to take over local authorities. We are trying to add value to the local authorities to offer choice for people on the waiting list. There was a very limited choice for people in housing in Ireland. One either went to council housing and got housed, bought a house out in ten years or bought one's own house. There were no real options for people outside of standard type housing. We are here because we address gaps in the housing system and then we thought the sector was adding value and local authorities feel they can work with us to add value. We are not trying to replace them but we can add value and this is 2018, not 1973.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I understand but I am asking the question that-----

Ms Karen Murphy:

I want to add that there is a perception there-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There is.

Ms Karen Murphy:

-----that it is all AHBs but looking at the Rebuilding Ireland targets, we are one part of it, we are one third of the targets and the local authorities are two thirds so we are very much just part of the response.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I know and I understand from my own knowledge that the management of housing units is where the local authorities really fell down. They built their estates and the only guy who went in was to collect the rent and that was it, he came out again and did not care what happened after. I understand that. We have the Irish Council for Social Housing but is there any other organisation representing AHBs? The ICSH represents 260 bodies but is there somebody out there representing another 50?

Mr. John Hannigan:

No.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is OK, I am just curious about that. The ICSH is the main operator in that area. The State balance sheet has been mentioned here as has EUROSTAT and it is a bit above the control of the AHBs. It is above the Minister's control because EUROSTAT will call this and it does not even matter what the Minister for Finance says because EUROSTAT will make those decisions. Can Mr. Hannigan clarify again what happened at the end of 2017? Were they looking at large bodies?

Mr. John Hannigan:

Yes, it was the end of 2017. The process had started prior to that but at the end of 2017, the CSO made a decision that it would recommend to EUROSTAT that 14 of the tier 3 organisations should be on the balance sheet of the State.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Why only 14?

Mr. John Hannigan:

There were two or three where the income from housing was below a certain threshold level because they were bigger organisations that had other service incomes such as special needs income etc. They were not included within it. The Chairman was saying it is above the Minister and I agree that it is above any single Minister. In fairness to some of the Ministers, the Taoiseach, the Minister for Finance and the Minister for Housing, Planning and Local Government have all come out in public with support for getting reclassified and that is what is actually needed. An all-of-Government approach is required in order to deal with it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is EUROSTAT.

Mr. John Hannigan:

Yes, but if the Government does not back the process through the CSO as well, and help us to make the recommendations, then EUROSTAT will not hear it at all.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is fine. The only point to make is that they made a big case through the CSO on an all-of-Government level for Irish Water. I am just saying that it is all well and good domestically so that the witnesses understand where I am coming from.

Mr. John Hannigan:

We appreciate the difference.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is a big issue. The AHBs mention all of these billions of euro that are potentially available to them but then that competes with the Government in terms of the borrowing space.

Mr. John Hannigan:

One of the things that we are spending much time on as AHBs is looking at how we can make that work for both the State and for the AHB sector in terms of it not being off balance sheet so there will be new mechanisms that will have to be facilitated.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. Hannigan was talking about the borrowing and making it more attractive, professional and sustainable for the long term and he mentioned security being available but in his earlier comments he said that none of this security has ever been called in in the history of the State so it cannot be as big a selling point.

Mr. John Hannigan:

The more complex matters get, and they will have to get more complex in order for us to be able to borrow at the scales we are talking about, at that point the legislation and the regulator become a key part of the oversight.

I am sure my colleague from the regulation group would want to have a say on that too.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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My next question relates to borrowings. When are they paid back? I have not looked at this closely but I get the impression that housing bodies are servicing debt and making provision for maintenance but that the debt will still be on their balance sheets 20 years from now.

Mr. John Hannigan:

There are two different elements. There is the cap element, which is the State loan-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes.

Mr. John Hannigan:

That gets paid after 30 years, with interest but-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is it like a balloon payment?

Mr. John Hannigan:

Yes, exactly.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is no way to run anything. When people buy cars with balloon payments we wonder what they were thinking. We know of people who warehouse part of their debt and pay interest only and then all of a sudden, they are facing huge bills. The idea of storing up a balloon payment goes against the grain in terms-----

Mr. John Hannigan:

I understand but the reality is that we are paying off the other debt over the period of the life. It gets paid on a monthly basis or a quarterly basis, depending on the agreement. When we get to the end of that debt, we have the value of the asset, which is very significant compared to the 30% plus interest that was lent. We have the opportunity to borrow again. It is a bit like the car loan. We have the opportunity to borrow again to make that payment and deliver more.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is a bit like a two generation mortgage for the organisations. The first one can take 30 years and then they start with the next one.

Mr. John Hannigan:

That is not a bad analogy.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I have reservations about a scheme that is based on not paying back debt for at least 20 years. I understand that is the model but I would not invent such a model if I was starting from scratch.

Ms Tina Donaghy:

It gives the State a hold on the asset for longer than 30 years because it still has an investment in terms of that balloon payment. Unless we pay that, the State still has first dibs on the asset.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, but I am sure the witnesses understand the point I am making. In terms of practical issues, I am interested in transfers. We are talking now about people rather than houses, bricks and mortar. If there are issues with tenants of approved housing bodies and those tenants need a transfer, how easy is that to accomplish? Transfers are probably relatively easy for the larger housing bodies or for local authorities, although the latter do not like transferring tenants. Can approved housing bodies transfer tenants back to local authorities, for example? I ask the witnesses to outline the process involved in transfers between housing bodies and other bodies like local authorities, if that happens.

Ms Tina Donaghy:

Yes, it has happened. Sometimes as tenants age, they need to move to another area where there is greater family support. We would engage with their local authority and also with the local authority in the area to which they want to move to see if there are any opportunities available. Obviously, when we are operating in very high demand areas, we find that a lot of people want to come in. It is a matter of working in partnership with the other providers, which can be other approved housing bodies or local authorities. We will facilitate transfers where needed. I have seen it in the past as well where we used the website of the Irish Council for Social Housing to advertise opportunities to move to more rural areas, back when there was a lot more accommodation available.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask the witnesses to outline their procurement processes when they want to develop a housing scheme of 20 to 40 houses, for example. Are they subject to the same procurement rules as local authorities?

Ms Tina Donaghy:

Yes. We use public procurement guidelines and operate to the same standard as local authorities.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I have heard complaints that approved housing bodies have their own shortlists of preferred tenderers and that some just go to them-----

Ms Tina Donaghy:

Unless they have been procured in that way and one has a framework-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Let us just say an approved housing body has a greenfield site for the development of 30 to 50 houses. Does it place an advertisement on eTenders?

Ms Tina Donaghy:

It would go on eTenders and on the Official Journal of the European Community, OJEC, if necessary, depending on the value of the project. My organisation would carry out internal audits and we have also had audits on procurement. When we submit our applications to the Department for approval, to the HFA for funding approval or to a private entity, they also seek copies of tender reports and all of that would have to be externally validated to make sure that we followed the prescribed procurement process to procure the services of consultants and contractors.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What is the total number of staff working for the 547 bodies involved?

Ms Susanna Lyons:

The total staff for those organisations is just over 10,000.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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No, I asked about staff----

Ms Susanna Lyons:

There are 10,000 staff. The staffing numbers highlight the diversity of the sector because-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How many people are housed?

Ms Susanna Lyons:

I will break it down for the committee. That figure is what they report as the number of people employed but that is because tier two organisations are predominantly care and support organisations which would have much higher levels of front-line staff. When we saw these very high numbers, we asked specifically how many people the tier two and tier three organisations employed directly in the provision of housing and the total reported was 1,236 employees. It is important to point out that 44% of tier one organisations are voluntary bodies and they have no staff. Those people make an extraordinary contribution-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They are not included in the 10,000 figure.

Ms Susanna Lyons:

Correct.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That means that there are approximately 9,000 staff providing-----

Ms Susanna Lyons:

Support services.

Mr. John Hannigan:

I can give an example, if I may. I used to work for an intellectual disability organisation which was a tier two AHB. We had about 165 houses in total but we actually employed 560 people because we provided direct one-to-one support for a large number of people with intellectual disabilities. That is where the figures get muddied a little. There can be four times the number of staff for the number of houses-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I suggest that it would be in the interests of the approved housing bodies to produce figures for the staff dealing with housing and accommodation and those that are dealing with disability or elderly service provision. When a single figure gets thrown around, people say that the approved housing body sector is an industry in itself. I have also heard from local authorities that when an AHB housing development is proposed, there might be one or two people from the local authority involved but that four or five people from the AHBs arrive into meetings in fine suits and cars. Various local authorities have said that to me in the last 12 months. Maybe they are not talking about the organisations represented here today but they have said to me that they cannot understand it when all of these suits arrive. They would argue that there is a complete imbalance in terms of the running of their housing department versus the various member organisations. The witnesses must have heard that criticism.

Mr. John Hannigan:

No, we have not heard that kind of criticism.

Dr. Donal McManus:

That is a new one. We have heard a lot of criticism, but that is a new one. In terms of tier three organisations, the ratio of staff to units is still quite low.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask the witnesses to send the committee a note on this issue. As I said, these things get bandied about at public meetings of local authorities on a regular basis. It is in the interests of the AHBs for the committee to see the situation from their perspective too.

I wish to focus now on the last annual report of the ICSH. Reference is made to the mortgage to rent scheme in 2017 and a total of 87. That is a hopeless figure. I can imagine the amount of work, training and so on that has gone into that in the local authorities and in the approved housing bodies, as well as the paperwork involved but the outturn is only 87. That is abysmal. The setting up of this scheme probably involved as much work as the setting up of much bigger schemes but the return is very small. Why is that the case? Why are there so few mortgage to rent arrangements? Where is the blockage?

Dr. Donal McManus:

The number has moved from what it was a couple of years ago. It is now probably 200 or 300, which is still quite low. There are a lot of moving parts in the mortgage to rent scheme, including financial institutions and banks. One of the issues is we are not able to predict how quickly we will get schemes over the line. Transferring one unit involves almost the same amount of work as transferring a scheme of 30 or 40 units. It is labour intensive.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I understand. It is slow.

Dr. Donal McManus:

We are trying to assist people with a genuine housing need. In many cases, the moving parts have meant that the sector has not been able to deliver. We are better at delivering when we can control the process. If we involve third parties, we are not able to control it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Now that the scheme is up and running, the Irish Council for Social Housing must have some recommendations. I have heard that in the small print it is stated that where someone is in negative equity, nobody talks about it and that it is technically parked, but it can come back and bite him or her at a later date. When banks agree to transfer under the scheme, is there an absolute write-off where someone is in negative equity? I know that the problem is diminishing as prices increase, but is the issue of negative equity dealt with?

Mr. John Hannigan:

To be quite honest, I do not think we can answer that question which is really one for the banks. When we take on a debt or a property, it is at the value agreed to with the bank.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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This is where I am going to be a little critical of the Irish Council for Social Housing. I ask the witnesses to take it in a positive way because we are all here to help people with a housing problem that needs to be dealt with. I will make up a figure. Let us say a house is worth €300,000 and the Irish Council for Social Housing takes it over for €160,000. That is figure with which it deals. I do not believe the bank formally writes off the negative equity of the person in question who is the meat in the sandwich. Constituents have spoken to me about the massive sting in the tail about which nobody had told them. What is most worrying is that the Irish Council for Social Housing which has dealt with all of these cases is telling me that it cannot answer on this fundamental aspect of the scheme because it is confidential between the bank and the person who is participating in it. The Irish Council for Social Housing is a fundamental link in the chain. Everybody sitting around the table should know what is involved. I am telling the witnesses that they need to be aware of the full financial implications of any arrangement in which the Irish Council for Social Housing is involved, not just from its point of view because that is a silo mentality. Where will it be down the road if the bank in my example comes back to the person concerned to ask for the other €140,000? I am disappointed that the position is not clear cut. The Irish Council of Social Housing should know the full picture of the entire financial arrangement, not only the bit that affects it. The people who have been on to me are probably right in what they have said.

Mr. Seamus McCarthy:

The Department has a view on this issue. We must remember that the funding for the mortgage-to-rent scheme which goes to the housing bodies comes from the Department's Vote. It should have a more holistic view of what it is achieving.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will ask it the next day. I have read about this issue in the Comptroller and Auditor General's annual report. We mentioned credit union lending. The Central Bank has given approval. Has any of it started to come through?

Dr. Donal McManus:

There are two separate issues. There is the issue of Central Bank consent for the credit unions to have a vehicle and there is also the issue of large approved housing bodies in the sector. Rebuilding Ireland contains a commitment to support the sector in developing its own off-balance-sheet vehicle to draw off-balance-sheet finance into the sector. The credit unions received approval from the Central Bank to set up their own vehicle to move money out of them into a vehicle to lend for social housing. They are two slightly different issues and sometimes they are confused-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, I am confused.

Dr. Donal McManus:

We have seen this in parliamentary questions. There is the work being done on the vehicle the sector is establishing to draw private finance into it. There are also the credit unions and perhaps other institutions. The credit unions could consent to establishing a vehicle to take money from them. The Central Bank has certain requirements and regulations for moving money.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are back to a special purpose vehicle before anything can happen.

Mr. John Hannigan:

To confirm the point, in the phases about which I spoke regarding the work we were doing in setting up a special purpose vehicle, the credit unions were asked to issue terms and they did. There is a consideration about which I cannot speak about because it is commercially sensitive. One of the conditions for the credit unions to be able to do this is that they do it using their own vehicle. The problem is that it has not been set up. The credit unions have been allowed by the Central Bank to do this, but they have not done so yet.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am still looking at some of the results. Will the Irish Council for Social Housing send us a note explaining it in layman's English? Phrases have been tossed around and the public is lost. Even the majority of Members of the House get lost. Acronyms such as CAS, SHCEP and CLSS are used all the time by everyone.

Mr. Seamus McCarthy:

There is an annex to the chapter - Annex 10A on page 130. It includes a very brief summary of each of the schemes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Then that question is answered. I do not have it in front of me. I will go back to the practical stuff because Deputies run into these issues all of the time. On anti-social behaviour and removing tenants, some of the organisations are slow in that department.

Ms Tina Donaghy:

I can only speak from personal experience.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask Ms Donaghy not to speak only about her own experience. We are speaking about the sector.

Ms Tina Donaghy:

We are now within the remit of the Residential Tenancies Board, RTB. As part of the process to deal with tenant disputes or anti-social behaviour, we can go through a two-stage mediation process. The RTB provides a mediation service in seeking a resolution, if all parties engage. Seeking a resolution is always the first course of action. On occasion, if someone is beyond this and creating havoc and being very difficult and unsafe or there are unsavoury circumstances for the neighbours, we will have to move to-----

Ms Karen Murphy:

Since we were brought under the RTB we have an obligation to deal with anti-social behaviour, or else we will be held liable for third party complaints. As the landlord, we can be taken to the RTB if we do not deal with anti-social behaviour.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Have many members of the Irish Council for Social Housing been brought to the RTB for not dealing with these issues?

Ms Karen Murphy:

In the almost three years we have been under the RTB the number of cases is lower than the average figure in the private sector. The cases go through our processes first to try to deal with issues as quickly as possible. On average, fewer cases are referred for either adjudication or mediation than what we would see in the private sector. In saying this we have to act if there is continuous anti-social behaviour or we will be held equally liable under the Act for failing in our duty to maintain a peaceful estate.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Are the local authorities governed by the RTB?

Ms Karen Murphy:

No.

Dr. Donal McManus:

I will add one figure. The note we sent-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am voicing issues about which I hear. It does not necessarily mean that I am promoting them; rather, I am raising them.

Dr. Donal McManus:

The Chairman mentioned people who were not given notice. The figure we have from our HMP survey-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What survey?

Dr. Donal McManus:

The housing management performance, HMP, survey of the sector. We sent it to the committee to provide figures. One of the figures we have is that 130 notices were issued in 2017 out of a total of 20,000 tenancies. The figure is very low. It is less than 0.5% where notices of termination were issued.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Was the figure 5%?

Dr. Donal McManus:

No, 0.5%. We are slow at issuing notices; we have a history of not issuing them lightly. We go through the housing management process with the bodies involved. It is a very small number.

Mr. John Hannigan:

I emphasise that this is the number of notices which were issued, but the number who have been prosecuted is less than that again. We are looking at a figure of 0.5%, which is very small number of notices issued. An even smaller proportion were actually-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What type of notice? The phrase has been used.

Mr. John Hannigan:

Notice to terminate.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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My point is that where there are issues and there is a process, people will be advised and several will leave before the notice arrives.

That is the final recorded figure for the number of people who got to that point. There are probably far more in the system. Not all people wait until they receive a notice before leaving the property. If they see the writing on the wall, they might make the decision themselves. Is that the case?

Dr. Donal McManus:

No.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They stick it out. Those who leave the properties are back on the doorstep of the local authority. That leads into the issue of approved housing bodies being able to cherry pick, while local authorities cannot do so. I am not saying that is the case, but it is the perception in certain quarters.

Ms Karen Murphy:

Some homeless organisations which also function as AHBs are working as part of our sector and------

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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For the record, are many homeless organisations also approved housing bodies?

Ms Karen Murphy:

Yes, they are all members of the Irish Council for Social Housing.

Dr. Donal McManus:

They are all members. The most active of them such as the Peter McVerry Trust in Dublin which provides between 200 and 500-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Simon is another such organisation.

Ms Karen Murphy:

As is Focus Ireland.

Dr. Donal McManus:

Organisations such as the Peter McVerry Trust, Simon and Focus Ireland are moving from the area of advocacy into housing. In a sense, they cherry pick some of the most difficult clients. They are moving into the provision of long-term housing. There is a significant spread in the sector, involving large providers and specialist------

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is important that the ICSH make the public aware of that. Many people have a certain perception of approved housing bodies. The ICSH should make it clear that its members also deal with front-line homelessness because many people forget that is the case, even though it is obvious when it is pointed out.

I ask that the committee be sent a note on payment and availability agreements. I do not know if that issue was addressed by the Comptroller and Auditor General as I do not have the details in front of me. It is the payment and availability scheme.

Mr. Seamus McCarthy:

I did not deal with it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Will Mr. McCarthy send the committee a note on the scheme and how it works.

Mr. Seamus McCarthy:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Are there differing rates under the payment and availability scheme for different local authorities, or is it the case that within a local authority there could be several payments based on local-----

Ms Tina Donaghy:

It is based on the property and the market or target rent identified by the local authority for that size property in the particular area.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is in the interests of the approved housing body that the target rent be relatively high in order to guarantee a good income. I am being pragmatic about it.

Mr. John Hannigan:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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People pay the equivalent of a differential rent. The approved housing body receives the payment. Is it paid through the local authorities? What is the payment structure?

Ms Tina Donaghy:

It is paid on a monthly or quarterly basis into a designated account.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask that the committee be sent a note on how the scheme works. Mr. Hannigan has stated the rents are linked with market rates. The rent might be 20% or a similar figure below market rates.

Ms Karen Murphy:

The rent paid by tenants------

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am referring to the payment and availability payment to AHBs. When an AHB develops 30 or 50 houses, for example, for what period is the level of the payment and availability payment fixed? When is it renewed?

Ms Tina Donaghy:

It depends on the outturn of the model. some years ago the ICSH developed a financial model which is accepted by the Department, the Housing Agency and us for use as an assessment tool. Recently, with the increase in market rents, the terms of the agreements are sometimes far shorter than was previously the case and the percentage of market rent payable may also be far lower. In the early days of the model, the AHB may have received 90% or 95% of market rent, but it may now receive 80% or 85%. Under the model, the percentage of market rent AHBs can claim has dropped. That keeps the level of investment by the State on a more even keel.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is exactly the point I was coming to: the cost to the State.

Mr. John Hannigan:

Under the model, the rent is fixed for a certain period of time.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That was my next question. For how many years is it fixed?

Mr. John Hannigan:

It is fixed for three to four years.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I refer to a typical three to five-year contract.

Mr. John Hannigan:

It is fixed for between three and five years. Most are currently fixed for four years. It is reviewed at that point and, depending on what has happened with the index-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In terms of AHBs drawing down long-term finance, is it short term such as over four years? I am sure an organisation borrowing money would prefer to have the agreement guaranteed for a longer period.

Mr. John Hannigan:

It is a 25-year agreement which is reviewed every four years. It is fixed for each of the four-year periods.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am putting on my hat s Chairman of the Committee of Public Accounts which looks after State funds. If the issue of housing supply is sorted out to some extent and rents start to drop, will the State be caught paying a high rent to AHBs based on an agreement that will be-----

Mr. John Hannigan:

No.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I noted that when the Department was working on affordable housing sites, there was a presumption that the market would continue to rise and the opposite was not contemplated.

Mr. John Hannigan:

Under the agreements, the rent may be reviewed downwards or upwards.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I do not want the State to be caught out. How many properties have been provided by AHBs?

Ms Susanna Lyons:

Approximately 33,000.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How many of the AHBs for which payments are approved ensure their financial statements are published and audited within six months of year end? Can any of the witnesses answer that question?

Ms Susanna Lyons:

I do not have the exact percentage.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does the Department have that information?

Ms Susanna Lyons:

I can provide it for the 260 organisations which have signed up to the voluntary regulation code.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask Ms Lyons to do so.

Ms Susanna Lyons:

No problem.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Some years ago the committee dealt with the HSE which was paying out money to section 38 and section 39 organisations for health services provided. The organisations were all brought into line and told that they would not receive a full allocation until their audited accounts were submitted. It would be dreadful not to have those controls in place from the beginning in this growing sector. The State could be paying money to organisations that have not presented audited accounts for two years. I want to head off this issue at the pass.

Mr. John Hannigan:

There is a legal requirement for us under the Companies Act 2014 to produce our accounts within nine months.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Who must produce accounts within nine months?

Mr. John Hannigan:

All AHBs.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That was also a requirement in the case of section 38 and section 39 companies. No one is knocking on the door of businesses. Given that taxpayers' money is being spent, I want control at the point where the money is going out. The Companies Registration Office will follow its own procedures, but I am here to look after taxpayers' money. It will probably take some time to provide that information.

Ms Susanna Lyons:

We probably already have it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Great.

Ms Susanna Lyons:

I do not know the exact percentage.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I want to know, out of the 260-----

Ms Susanna Lyons:

The Chairman wishes to know how many do not meet the CRO requirement.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What is the CRO requirement?

Mr. Seamus McCarthy:

The Companies Registration Office requires that the accounts be produced.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I know that. Within how many months must they be produced?

Mr. Seamus McCarthy:

They must be produced nine months after the end of the period of account.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I wish to know how many of the AHBs meet that requirement. I would be worried if there were outliers. The witnesses can understand from where I am coming.

Mr. Seamus McCarthy:

There could be a situation where an AHB is compliant with the CRO requirement, but it may not have submitted accounts to the regulator.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Ms Lyons will be able to find out.

Ms Susanna Lyons:

Absolutely.

Mr. Seamus McCarthy:

When does Ms Lyons receive the accounts is the question.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Once they are audited and available. Do AHBs pay local property tax?

Dr. Donal McManus:

Properties that provide family-type housing or special needs accommodation with supports are exempt from payment of the local property tax. Special needs units provided under the capital assistance scheme, for instance, which involve the provision of supports in the property, were exempt. Most AHBs, particularly the larger ones, pay a flat rate based on a certain valuation.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is it the lowest value?

Dr. Donal McManus:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Therefore, the annual local property tax level per property is €90.

Dr. Donal McManus:

Exactly, yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask that the committee be provided with a brief note on the issue.

I have probably taken enough of the witnesses' time at this stage. I decided to hold my questions over until the end and allow other members to contribute first. I thank the representatives for their attendance. I apologise for the late start, but our morning session ran late. We had an engagement with the Department some time ago and thought it would be useful to obtain the views of representatives of the AHB sector. How many houses have been built by approved housing bodies? I am looking at page 9 of the financial statement for 2017. It notes that in 2017 AHBs built 550 properties and acquired 975. For 2018, there was a target of 1,500 new builds, while the number of acquisitions decreased, which is probably to be welcomed. How many properties were built in 2018?

Ms Karen Murphy:

Approximately 3,200 units were delivered by the sector in 2018.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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How many of them were new builds?

Ms Karen Murphy:

That figure includes approximately 1,700 new builds.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Perhaps Ms Murphy could send those figures on to us. The Department of Housing, Planning and Local Government last appeared before the committee in the autumn. It only collects statistics every three month, and the results might not be released for a couple of months. We might not know how many houses were built five months ago. I am putting the same question to Ms Murphy, and I hope she can send on some information on the builds, acquisition or revolving funds, as she described it. We would appreciate a breakdown of what was achieved in 2018 and the targets for 2019.

I thank our witnesses for attending. Our next public meeting will be on Thursday, 28 February, when the Department of Housing, Planning and Local Government will be before us. We will look at the local government fund, the Comptroller and Auditor General's report from 2017 and the central funding of local authorities. We will be joined on the day by officials from the Department and representatives from the County and City Management Association to discuss public housing.

The witnesses withdrew.

The committee adjourned at 6.10 p.m. until 9 a.m. on Thursday, 28 February 2019.