Oireachtas Joint and Select Committees

Thursday, 15 July 2021

Committee on Budgetary Oversight

Summer Economic Statement: Minister for Finance and Minister for Public Expenditure and Reform

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I thank the Deputy for the question and I am happy to take it. He rightly pointed to the scale of the issue, and the Government is acutely conscious of it. That is why we have set housing as a key priority. Consider the level of resources allocated in this regard in budget 2021, when we increased the capital envelope in the Department of Housing, Local Government and Heritage alone by €500 million and provided sufficient funding to build more than 9,000 homes directly. The Deputy will be aware output has been significantly impacted by the public health restrictions we were forced to impose. However, it does underline this Government's commitment to tackling the housing crisis and it will be continued right through our term in government.

Let us recall the amount of public money and the increase in that public money which was allocated to this priority area in recent years. The capital envelope for the Department of Housing, Local Government and Heritage, for example, was just over €800 million some years ago, but in 2021 it is now more than €2.7 billion. It has increased more than threefold in four years and there will be further significant increases in funding for the Department. We want to get back to a position where we are directly building many more public homes through our local authorities or approved housing bodies. We must also recognise we have huge challenges with affordability, and that is why the schemes we have legislated for and which will be put into operation shortly for affordable purchase and cost rental are so important.

We cannot instruct the construction industry on the number of units which must be built, but we can help by ensuring the bottlenecks in the system are addressed. Challenges exist in respect of the planning system, legal actions, costs escalation, the availability of labour and the provision of services and infrastructure. The Government has a role to play in dealing with all those aspects of the situation and that is what we are seeking to do. Consider, for example, that the Central Bank of Ireland forecast for housing output next year is 23,000 units, while the consensus is we need at least 33,000 homes coming on stream each year. We are not going to get there overnight. It takes time to build houses, but this Government is determined to make significant progress on this issue. That is why the Housing for All strategy will be so important. It is a whole-of-government approach and cannot be left to one Department because the issues cut across many Departments. We are all working together as a team to address this issue. There is another meeting of the Cabinet housing subcommittee this afternoon and we are in the final stages of completing the Housing for All strategy. It will be ambitious and it will be funded. The focus then must be on delivery and that is where the Government will focus all its attention.