Oireachtas Joint and Select Committees
Thursday, 17 February 2022
Public Accounts Committee
2020 Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 34 - Housing, Local Government and Heritage
Apologies have been received from Deputy Carroll MacNeill. I welcome everyone to the meeting. While Covid-19 restrictions are receding and it is open to members and witnesses to attend meetings in person, I ask those doing so to continue to wear face coverings when not addressing the committee. Members of the committee attending remotely must continue to do so from within the precincts of Leinster House. This is due to the constitutional requirement that, in order to participate in public meetings, members must be physically present within the confines of the place where the Parliament has chosen to sit. The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness to the committee and joins us this morning.
The purpose of this meeting is to engage with officials from the Department of Housing, Local Government and Heritage to examine the following matters: the 2020 appropriation account for Vote 34 - housing, local government and heritage; from the Comptroller and Auditor General's Report on the Accounts of the Public Services 2020, chapter 3, central government funding of local authorities, and chapter 8, oversight of the housing assistance payment, HAP; and the 2020 Local Government Fund account. The Department has been advised that the committee may also wish to examine the following matters during the course of our engagement: EU fines in respect of Derrybrien Wind Farm, Galway; women's refuges; and cost-rental expenditure.
We are joined in the committee room by the following officials from the Department: Mr. Graham Doyle, Secretary General; Ms Maria Graham, assistant secretary, planning division; Ms Áine Stapleton, assistant secretary, social housing delivery division; Ms Caroline Timmons, acting assistant secretary, housing affordability, inclusion and homelessness division; Ms Lorraine O'Donoghue, principal officer, local government division; and Ms Marguerite Ryan, all importantly, finance officer. We are also joined remotely from outside the precincts of Leinster House by Ms Clare Costello, principal officer in the housing, local government and heritage Vote section of the Department of Public Expenditure and Reform. They are all very welcome. When we begin to engage, I ask members and witnesses to mute themselves when not contributing in order that we do not pick up any background noise or feedback and, as usual, I remind all those in attendance to ensure that their mobile phones are on silent or switched off.
I wish to explain some limitations to parliamentary privilege and the practice of the Houses in respect of reference witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both Constitution and statute, by absolute privilege. One of today's witnesses is to give her evidence remotely from a place outside the parliamentary precincts and, as such, may not benefit from the same level of immunity from legal proceedings as witnesses physically present do. She has already been advised of this and may have thought it appropriate to take legal advice on the matter.
Members are reminded of the provisions in Standing Order 218 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policies. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
To start, I call on the Comptroller and Auditor General to make his opening statement.
Mr. Seamus McCarthy:
The 2020 appropriation account for Vote 34 - housing, local government and heritage - records gross expenditure of €5.27 billion. The appropriation account is presented under five programme headings. The largest by value are the housing programme, the water services programme and the programme to support local government. The surplus at the year end was €226.5 million. Of this, €214 million related to unspent allocations in respect of planned capital investments, which were carried forward to 2021.
I issued a clear audit opinion in respect of the account. I drew attention, however, to a note in the account that discloses payment of a fine to the European Commission arising from a judgment of the European Court of Justice in November 2019. The case concerned the failure to ensure that a retrospective environmental impact assessment was carried out in respect of a wind farm constructed in County Galway. The fine imposed comprises a €5 million lump-sum payment plus a daily fine of €15,000 while the infringement continues, plus legal costs. The amount paid to the Commission in 2020 totalled €7.745 million, and a further liability of €2.745 million was accrued by the end of 2020. The daily fine was ongoing at the time we were completing the audit of the account and we estimated that it could result in a potential further liability of €5.5 million in respect of 2021. I also drew attention to the disclosure in the statement on internal financial control in respect of three non-compliant procurement contracts operated by the Department during the year.
The Local Government Fund is managed by the Department separately from the Vote. The fund comprises mainly the proceeds of the local property tax, LPT, and a transfer from the Vote. In 2020, LPT receipts into the fund amounted to €482 million. This was up marginally from the level of LPT receipts in 2019. The transfer to the fund from the Vote in 2020 amounted to €1.1 billion. This was up €871 million, or 470%, year on year. The increase was to cover the cost of the Covid-related commercial rates waiver and of certain additional supports to local authorities. The fund expenditure in 2020 amounted to €1.5 billion. The bulk of this was accounted for by transfers to local authorities. At end December 2020, the fund's reserves stood at just under €140 million.
I issued a clear audit opinion also in relation to the fund account.
Due to the complex ways that central government funds flow to individual local authorities, chapter 3 is compiled each year to present an overview of the level and purpose of the funding provided. In 2020, total funding to local authorities from central government sources was €6.08 billion, an increase of 46% on the €4.17 billion provided in 2019.
I turn now to chapter 8, which deals with oversight of the housing assistance payment, HAP. The HAP scheme, while funded by the Department, is operated by the local authorities. As members are aware, the scheme aims to cater for households with a long-term housing need in a unified system of support. There has been a steady increase in the number of households receiving support under the scheme. In 2020, the Department spent almost €465 million on HAP, supporting nearly 60,000 tenants at an average annual cost of €7,800 per tenancy supported. The cost to the Exchequer is net of rent contributions collected from tenants.
The examination found that while market rental costs were increasing, the maximum rents payable by the State under HAP had not been revised since 2017. Some tenants make top-up payments to cover any difference between the rent payable to the landlord and the maximum rent payable by the State. A review carried out by the Department of Public Expenditure and Reform found that around 28% of HAP tenants were making top-up payments to landlords in the first half of 2019. The examination found that no more recent data were available on the extent of these payments, and that such top-up payments were not routinely tracked by the Department. The HAP scheme also has an objective to improve regulation of the private tenancy sector, which is met by the legal requirements for local authorities to inspect HAP properties. The examination found that the Department did not have information on the proportion of proposed HAP tenancies actually inspected or on the results of those inspections.
The report makes several recommendations for improvement in the Department’s oversight and management of HAP, including monitoring the effectiveness of HAP, which the Department has accepted. The Accounting Officer will be in a position to provide an update on any progress made regarding their implementation.
Mr. Graham Doyle:
I am pleased to be here this morning as the Accounting Officer to assist the committee in its examination of the 2020 appropriation account for Vote 34 and the related chapters. I am joined by my colleagues from the Department, whom the Chairman has already introduced. We look forward to discussing the expenditure and activity of the Department in 2020 with the members. As time is limited, I will not go through every area of expenditure but I will touch on the key areas briefly. I provided some advance briefing information before the meeting and a copy of my opening statement. We have also provided advance written briefing material on areas specifically sought by the committee, namely Derrybrien, refuges for those experiencing domestic violence and cost-rental expenditure.
I welcome the work of the Comptroller and Auditor General on the appropriation account for Vote 34 and the related chapters. I recognise and appreciate the value of this work in the context of enhancing the outward demonstration, not only to this committee, but to the public, of the important work done by the Department and the value we put on transparency and accountability. In particular, the period under examination covered the first phase of remote working, and I acknowledge the level of professionalism demonstrated during that new context. As with previous recommendations, we will continue to evolve and mature our systems and reporting to align with best practice wherever possible.
The Department’s gross expenditure in 2020, as set out in the appropriation account before the committee, totalled some €5.3 billion, or a 33% increase on the expenditure in the previous year. As the committee will be aware, 2020 was a unique year concerning activity and finance in the context of the onset of the pandemic and the range of responses put in place across Government. The Estimates process for 2020 did not take place until autumn, and this meant that certain provisions for the July stimulus and the rates waivers formed part of the final Estimate for the Department.
There were subsequent Supplementary Estimates in the areas of housing and water to facilitate further stimulus activity and additional funding for local government to support the final three months of the rates waiver. In recognition of the impact of construction closures on expenditure, some €214 million of unspent capital allocations was carried forward for spending in 2021. Throughout 2020, the Department kept a close eye on activity and expenditure in the context of the pandemic. At the first indication of potential remote working, we established critical payment teams to ensure that there would be no interruption to payments in the various significant areas. When a full lock-down became inevitable, we had a process in place which saw the designation of essential sites for social housing, meaning that there would be a flow of near-complete homes for tenanting. We worked with local authorities and delivery partners in respect of vulnerable households, including those in congregated emergency accommodation, as well as Traveller accommodation, to ensure they could be kept as safe as possible. Working across Government, we harnessed the July stimulus package to channel investment back into businesses. We worked with colleagues in the Department of Enterprise Trade and Employment on the rates waiver to alleviate challenges for businesses.
On housing, the focus of the Department’s 2020 activity was initially driven by the actions set out in the Rebuilding Ireland policy, which was then succeeded by the programme for Government, and, in turn, subsequently became the basis for the Housing for All policy. The Department’s gross voted expenditure on housing programmes, as set out in the appropriation account, was €2.6 billion in 2020. A further €92 million was available from the local property tax, LPT, receipts to fund the housing programmes of certain local authorities. Funding for the overall social housing provision represents the bulk of expenditure under the housing programme. Delivery is achieved through build, acquisition, leasing, HAP and the rental accommodation scheme, RAS. Within these headings are multiple sub-delivery vehicles, to achieve the optimum outcome for Exchequer investment.
Each year, the Department channels capital and current investment strands to maximise new delivery of housing solutions and to ensure that the many tens of thousands of households already in receipt of a social support continue to be provided for. In 2020, over €2.6 billion was spent across 29 subheads under the housing programme. Of this, €1.5 billion was invested in the delivery of long-term homes under build, acquisition and leasing programmes and €600 million was allocated to supporting new and existing social tenancies under RAS and HAP, with the remainder used to deliver on services for homeless households, private housing grants, Traveller accommodation, energy efficiency etc. In 2020, over 24,000 households had their housing needs met through the allocation of the supports provided by HAP and RAS. A total of 7,824 new social homes were delivered in 2020, including 5,000 new-build homes, 1,300 targeted acquisitions by local authorities and approved housing bodies, AHBs, and 1,400 homes delivered through leasing programmes.
Despite the incredibly challenging impact of Covid-19 on construction activity, the second half of 2020 saw a rebound with local authorities, approved housing bodies and other delivery partners anxious to make up lost ground. I acknowledge that determination and co-operation, and the committee will be aware of the pressures on local authorities during the height of the pandemic. Recognising the significant challenges for new housing delivery following the disruption caused by lockdown, the Department secured moneys in the July stimulus, which we used to refurbish vacant social housing stock to make it available for allocation to families and individuals on waiting lists.
I welcome our guests and I thank them for the briefing notes and the opening statement supplied in advance. It is a broad appropriation account, and we could probably spend a week delving into the important matters that it covers. I compliment the Secretary General, the Department and its officials on delivering on the work programme. It is extremely ambitious and the commitment to delivering on it must be acknowledged. It is a work programme which is required to meet the needs of our citizens.
I welcome the €4 billion fund that will be available for the housing programme and that undoubtedly relates to the challenge this Government needs to meet. It is very welcome. I acknowledge and appreciate the work of our local authorities around the country and the speed of change. I appreciate their mobilisation during the early stages of the pandemic and the Department’s support for local authorities at national level.
The Comptroller and Auditor General drew attention to the note on the account that disclosed the payment of a fine to the European Commission arising from the judgment of the European Court of Justice in November 2019. I ask the Secretary General to explain the Derrybrien wind farm case and how it ended up in the European Court of Justice. What are the next steps to resolve this issue?
Mr. Graham Doyle:
I thank the Deputy. The Derrybrien wind farm case refers to Ireland’s non-compliance with a judgment in a European Court of Justice case from July 2008. It is specifically about non-compliance with the development consent for a wind farm in Derrybrien, County Galway, and the environmental impact assessment directive. The wind farm is owned and operated by a subsidiary of the ESB. The Comptroller and Auditor General has set out that on foot of a finding against Ireland on this — it was a judgment in late 2019 — fines of about €13 million, imposed by the Commission, have been paid by the State to date. It was always the case that the judgment would be complied with once the wind farm was subjected to a retrospective environmental impact assessment, known as substitute consent. That is a statutory process, essentially. It required the ESB, as the owner and operator of the wind farm, to submit an application to An Bord Pleanála. That was done in August 2020 and An Bord Pleanála very recently, in the past week or two, issued a finding against the application in that case. We will now seek to engage with the European Commission to close out the infringement case.
Mr. Graham Doyle:
We estimate that the fines that have not been levied yet but that are likely to be levied to be in the region of €4 million, taking us up to date. Given that An Bord Pleanála has now dealt with the case and issued its finding, we argue that our contention to the Commission should be that this should bring closure to the case. We expect to be levied with the fines. It should be noted that the electricity production at Derrybrien wind farm has been paused at this point. Officials from this Department will be engaging with officials in the Department of the Environment, Climate and Communications over the coming days to work with the Commission to bring this to a close.
Mr. Graham Doyle:
My understanding is that the various parties, including Galway County Council, are considering the matter right now because the developments in the case are very recent. We looked at the issue of fines previously. The fine is levied on Ireland as a state. We sought legal advice to see whether it was possible to apportion those fines elsewhere, and our advice to date has not provided us with that avenue.
That is an issue in that the funding could have been used for other activities.
I want to move on to the cost of the housing assistance payment, HAP, to the Exchequer. I see from the appropriation accounts that €465 million was allocated in 2020. Notwithstanding the increased costs in the rental market, that the maximum rent payable under the HAP scheme has not been revised since 2017 and that the average monthly HAP to landlords has increased by about 10% between 2018 and 2020, my first question is on a report completed by the Department of Public Expenditure and Reform that made recommendations on the improvement of the Department’s oversight and management of the HAP, including the monitoring of its effectiveness. The Department of Housing, Local Government and Heritage accepted these recommendations. Has the Department implemented them? Could Mr. Doyle provide an overview of the work done in this area?
Mr. Graham Doyle:
There are many existing controls in place within the Department regarding the relationship between it and the flow of funding through the HAP shared services centre, which is located in Limerick, and local authorities generally. The Department is taking action in response to the Comptroller and Auditor General’s recommendation on additional control measures.
Ms Áine Stapleton:
Let me give the Deputy an update on the Accounting Officer’s response to the report. In relation to the oversight arrangements, the Department engaged the Housing Agency last year to commission a report on the oversight of the HAP and the governance structures as it evolved through the set-up phase into consolidation. That report actually aligned very well with some of the recommendations coming from the Comptroller and Auditor General’s audit.
Under the initial structures, we had both an oversight group and a project board. The recommendations coming through suggested we now needed to consolidate into one strong oversight group. There was a strong recommendation in the report that the oversight group should not be chaired by either the Department of Housing, Local Government and Heritage or the Department of Social Protection, but that we should bring some independence to the chair. We have now brought in an independent chair in a newly constituted oversight group.
The oversight group is currently working through its work programme and is very much guided in that work programme by the recommendations that have come through from the Comptroller and Auditor General’s audit. Therefore, there is good alignment now between where we have got to on the governance structures and the oversight.
The other piece of advice that came through from the Comptroller and Auditor General, on which we are following through, is that we should liaise with the Department of Social Protection and effectively learn best practice from it regarding the types of additional controls it exercises that we might replicate to support the controls that the Secretary General has referred to.
I thank Ms Stapleton very much for that update. May I focus specifically on the extent of top-up payments that HAP tenants must make to landlords? At this point in time, early in 2022, all Deputies will say the number of calls to their offices from tenants who have been subjected to top-up payments associated with increased rents has been enormous.
What mechanisms are in place within the Department to record the extent of top-up payments that HAP tenants have to make to landlords? Is there is a reporting mechanism in that regard?
Mr. Graham Doyle:
The Deputy referred to the timeframe since there has been an update of HAP rates. He may already be aware of this, but there is discretion allowed in the case of local authorities, which is 20% in terms of the rates and 50% in the case of a family at risk of homelessness. I will ask Ms Stapleton to respond to the Deputy's question on the top-up levels.
Ms Áine Stapleton:
As referred to by the Comptroller and Auditor General earlier, the Department does not collect specific information on the top-up payments. We are very aware that it is a very volatile market at the moment and there are a lot of pressures on HAP tenancies. Under Housing for All, one of the actions that we are committed to is a review of the discretionary levels, that is, the 20% discretionary level to which the Secretary General referred. That review was carried out for the Department by the Housing Agency. We received a report before Christmas. We are working with the authors of that report to clarify some of the data sets and we hope to be in a position to put recommendations to the Minister shortly on foot of that report. Our initial focus will be on that element of the discretionary levels and whether we need more flexibility there, particularly for single people where we know there are challenges.
Ms Áine Stapleton:
In terms of the overall market intelligence we have regarding the income of tenants, there was a CSO report on HAP tenancies which confirmed our understanding that the overall income level of people who are in HAP tenancies is quite low and those are a cohort that are in need of support. We have not specifically considered engaging with Revenue.
Mr. Graham Doyle:
In terms of the standards relating to HAP, there are strong standards in place in terms of the quality of accommodation and the expectations around the type of accommodation as it is provided. There is an inspection regime. For example, it is required that a new HAP tenancy is inspected within eight months, as the Deputy probably will know.
I welcome the witnesses. I am also a member of the Joint Committee on Housing, Local Government and Heritage, so I have an appreciation of the full range and depth of the Department. The short title, Department of housing, does not do service to any of the other sectors and the significant funding in those areas. As my questions are on various topics, Mr. Graham can feel free to divert me to the appropriate official.
In the past two years, the Joint Committee on Housing, Local Government and Heritage and, to some degree, the Minister have assaulted the Department of Housing, Local Government and Heritage with a huge range of legislation. Leaving aside marine planning and the electoral reform Bills, which are lengthy pieces of legislation, housing has significantly changed in terms of the policy toolbox that is available to local authorities, the Land Development Agency and so on. It is very easy to look at Housing for All and rattle through all of the different schemes, but they all then need to be administered and delivered. That is the key point I want to focus on. Project Tosaigh, the first home scheme, the cost rental scheme, the affordable purchase scheme, which is being reintroduced, Croí Cónaithe towns, Croí Cónaithe cities, the vulture fund tax, the owner-occupier guarantee and the land value sharing require additional resources in terms of administration. Will Mr. Graham comment on the staffing in the Department and the resources to support those new measures.
Mr. Graham Doyle:
This is a topic close to my heart, as the Deputy can imagine. It is exactly as stated by the Deputy, namely, that there has been a massive range of new initiatives, especially under Housing for All. These were being advanced in parallel with the development of Housing for All. We have restructured at management board level. Ms Stapleton joined us at the start of last year as an additional assistant secretary to focus on social housing delivery in particular. We are now looking at a slight restructuring again, very conscious of not throwing babies and bath waters around, but trying to address the whole range of schemes and trying to bring coherence across the Department to that huge range of activity mentioned by the Deputy.
Mr. Graham Doyle:
The number of full-time equivalents at the end of 2020 was just over 1,200 and at the end of 2021 it was 1,366. We do have an ability to bring it up beyond that. As is the case for all organisations out there, recruitment is a challenge but we are working very hard on that. The Department is, as stated by the Deputy, is stretched across a broad range of areas.
Mr. Graham Doyle:
It is very much focused on some of the schemes the Deputy mentioned. For example, in regard to affordable purchase, there are several strands in terms of how that can be dealt with through local authority schemes, etc. The unit is also dealing with the cost rental programme. Again, there are a range of ways that cost rental can be delivered, for example, through the cost rental homes scheme with AHBs, local authorities and the Land Development Agency. Schemes such as first home and the shared equity scheme are schemes that are being developed from scratch, which involves development of the schemes, the legislation - I know many members of the committee, including Deputy McAuliffe, have been involved with that - and then the building of the pipeline.
My fear is that the work will be done in here, the legislation will be passed and with the Department but the toolbox that which will be available to local authorities in particular but also the AHBs and so on, will not be widely understood or known. There are many vacant and derelict sites in my constituency. The Drake Inn site has been lying vacant for 15 years. Any one of the aforementioned initiatives could probably resolve that dereliction; it is not just about dereliction, however. I am not yet certain that there is an awareness and understanding at local authority level of the breadth of these schemes and the ways in which they can access the funding. That involves the Department spending money to make sure those who provide housing are aware of these schemes. More needs to be done in these years to make sure that happens.
Mr. Graham Doyle:
The Deputy is correct. The word "delivery" is used continuously within the Department. It has been put into a lot of people's job titles, which is a superficial thing but important. In order to encourage the participation of the various stakeholders and players at local authority level, etc., in these schemes, we provided additional staffing to local authorities.
We have provided more than 200 new posts in local authorities and doubling is still to come within that. We are looking at staffing around-----
Ms Áine Stapleton:
Yes. We undertook an analysis with the housing delivery co-ordination office and all the local authorities around the housing delivery teams and their staffing needs. On foot of that, we got sanction for a pool of 250 posts. We have allocated approximately 211 of those to 27 local authorities. We are currently working through with the four Dublin local authorities precisely what their staffing needs are. Just because of the scheme-----
Ms Áine Stapleton:
It is not necessarily a delay as such. We thought, as did the Dublin local authorities, that having concluded their housing delivery action plans in December they would be in a much better position to be able to focus specifically on their resource needs. They are aware the resources are there for them to draw down. We just need to work through exactly what is the best use of that resource.
Knowledge of the toolbox in one thing, but we also need local authorities to have ambition. Since they have spent so much time not being in this space I can appreciate where their ambition might be limited, but the Department's role is to set that ambition. Do the officials believe there is the willingness in local authorities to develop affordable purchase in particular, which is a new model for them they will need to get their head around?
Mr. Graham Doyle:
We have focused a lot on encouragement and working with local authorities. We have a range of engagements from seminars through to what we call summit meetings with the local authority sector, which we take over two days or whatever. The enthusiasm around that has been very good. We are also using the Housing Agency as a centre of excellence around the various programmes we have in respect of working with local authorities and our knowledge base around that piece.
The issue that probably needs more work with the local authorities is the one the Deputy just mentioned, which is the affordable purchase piece. We are focused on that. We know it is hard for local authorities to get up and running in that space. Many of the affordable schemes, all of which the Deputy mentioned, are starting from scratch. We have very ambitious delivery targets under them so getting that rolling and getting that momentum is critically important.
That is important in increasing overall supply, but it also makes a massive difference in communities. I spoke about this at the Oireachtas Joint Committee on Housing, Local Government and Heritage. Ballymun has more than 70% low-income social housing, which we know is not good for that community and the people who live there. Providing affordable purchase, not just for people who are in the surrounding areas, but for children who have done well, have gone to college and have benefited from the supports we put into social programmes in Ballymun, want to come back to live beside their parents. They want to buy a home. We have 19 sites in Ballymun, 28 ha of land, all of which is in public ownership. I do not yet feel the ambition to deliver on those. They are all within our gift. I fully appreciate and have talked to Dublin City Council about what they want to do on different sites, but the timelines are all still around 2024 and 2025, which seems like a long time.
It is not just those 19 sites in Ballymun. I could talk about the Kildonan and Church of the Annunciation sites in Finglas. There are so many sites that communities want developed. We know it will have a benefit, that the toolbox and the €4 billion are there, and there is a real impatience to get this up and running. I will end on this point. The Department needs to spend whatever money and resources it has to impart that ambition and to hold local authorities and approved housing bodies, AHBs, to account. If we do not lead that ambition, we will not solve the housing crisis.
Mr. Graham Doyle:
I could not agree with the Deputy more. That is very much our focus. Housing for All very much committed to working with local authorities around the initiation, design, planning, implementation and management of those housing projects, in addition to supporting them as much as we possibly could in the various ways the Deputy suggested.
I will make one brief comment. The Deputy talked about one form of housing in a particular area. Ministers and politicians set and make policy. We advise around that, but since I came to the Department around 18 months ago, I have been very struck by the major commitment to the range of housing solutions that are needed across communities and the economy.
I will follow on from my colleague, Deputy Dillon, regarding the inspections regime. I understand there are a set of regulations going back to 2019 relating to standards in private rented accommodation, which are very clearly delineated. I am struck by the fact, notwithstanding Covid-19 and the inability of people to inspect private rented accommodation that is subject to housing assistance payments, or even the rental accommodation scheme as we used to know it, of the dramatic drop-off in the number of inspections taking place. The Minister's response to a parliamentary question I posed on 25 January clearly shows that up to quarter 3 of 2021, 11,731 inspections took place. Those are the most up-to-date figures I have. There may have been an advance on that since then.
It was 2021. We are factoring in Covid-19. We know there will be a drop-off so the officials do not need to respond to that. That is a given and that is understood, but the number of prohibition notices that have been served out of those inspections is 15. Even if we track back, taking into account Covid-19, in 2018, approximately 28,000 inspections were carried out with 99 prohibition notices served. In 2019, 40,000 inspections were carried out with 106 notices served. In 2020, approximately 26,000 inspections were carried out with 57 notices served and, as I said, there were 11,700 inspections up to quarter 3 of 2021 with 15 notices served.
Do the officials agree that the number of prohibition notices served is extremely low? I ask that because I have visited people of late who are in receipt of the housing assistance payment. To describe the conditions they are living in as Dickensian would be to put it mildly. I understand the local authorities have a tough job to do, but I would like to see some language coming from the Department in respect of buttressing the inspections regime by way of ensuring there is a clear policy that the regulations, which are laid down in law, are adhered to such that people have the right to live in some sort of decent accommodation. I invite the officials to visit some of these dwellings for themselves. They will see just how poor the level of accommodation is. These people are caught in a major bind because they cannot go back to their landlord to ask him or her to fix this or that as they would be out on their ear before they know it.
This is a major issue right across society when we are paying €465 million on the housing assistance payment. We should look at the rent supplement figure from the Department of Social Protection for 2021. Under what we call provisional expenditure under the supplementary welfare allowance scheme 2021, the Department of Social Protection paid out €122,957,000 in rent supplement. We are paying out a massive amount of money. I can understand why we are doing so. We need to keep people in housing in the private rented sector until supply is sufficiently provided for, but the inspection regime is just not working. I ask the officials to please not come back to me with Covid-19 as a reason. A regime needs to be put in place such that the inspectorate is robust and local authorities are resourced commensurate with the number of properties in their purview.
That is something that needs to be addressed urgently. The Comptroller and Auditor General has given us the metric of 60,000 tenancies and €465 million, which is coming in at, give or take, €7,800 per tenancy. Obviously, there has been no provision to revise upwards the rent provision to reflect the market in 2017. The Secretary General will tell me there is a working group on that but there needs to be a greater degree of urgency. If I could have an answer to that in two minutes or less, I would be delighted because there is one other issue I would like to cover as well.
Mr. Graham Doyle:
Certainly. The standards are tremendously important and they are there for a reason. They need to be inspected and people need to be held to those standards. Since Housing for All was launched in September, I know senior departmental officials have met with all the local authorities on the inspection regime and have focused on the range of sanctions and enforcement options available to people. I absolutely accept the importance of it, as the Deputy outlined.
I might ask Ms Timmons to add a word in that regard.
Ms Caroline Timmons:
I could not agree more and, obviously, the inspection regime needs to be improved. We have a big target of 25% of tenancies. As the Deputy acknowledged, Covid has been an issue for us. What we are trying to do is get local authorities back into that space. As he will be aware, they did try virtual inspections and I know they want to continue that and it may be one way to do things, but the physical inspections are important as well.
The Deputy has seen there are low numbers of follow-through right to the end. That is sometimes because 93% of them fail in the first instance because of a small thing, for example, a fire blanket or something that can be resolved. Many times, it does not go through to the end because they are resolved before the end, and I think that explains the low numbers that the Deputy will see. For us, we think the local authorities need to do more in taking it all the way to the end, and I agree with the Deputy in that respect. We will encourage them strongly to up that target this year.
Ms Caroline Timmons:
We are willing to talk to local authorities if they feel the problem is resourcing. Some of them do not resource themselves and they resource an outside partner to do the inspections for them. The feedback is not necessarily about the resources at the minute, but we will examine that with them and, if there is an issue, we will of course address that. At the moment, it is ramping back up to where they were. They were doing very well and it is simply that Covid has interrupted. I know they are very keen to get back into that space.
I thank Ms Timmons. I appreciate the answer.
With regard to water services, as a typical Deputy trying to get schemes up off the ground in regard to wastewater treatment plants and sewage treatment plants, and generally improve the condition of services, in particular water services, I recognise that some very good projects are under way right across the country under the ambit of Irish Water. However, I am trying to understand what is the dynamic that is informing the relationship between Irish Water and the local authorities. Is it the case that the service level agreements that are in place between the two entities will be set aside, such that all staff are now to transfer across to Irish Water? If that is the case, what is the status of that process? That is the first question.
The second question relates to whether a scheme will be provided where there are small settlements or villages where the local authority is ready to go on a project, but it is not necessarily on a priority list for Irish Water. Is there scope for the Department to step in to provide funding for local authorities for smaller schemes that are shovel-ready and that could get off the ground? It would have tremendous impact. If we do not have those types of schemes, people are subjected to an Irish Water list and they could be waiting until kingdom come to get their little village or settlement sorted out.
Mr. Graham Doyle:
In terms of the water sector transformation programme, there are discussions ongoing within the WRC at present, as the Deputy will probably be aware, on the transfer of local authority staff to Irish Water, which will be on a voluntary basis. As I said, engagements are ongoing on that and I think there is good and productive engagement around it. I do not want to take up more of the Deputy’s time on that.
There is a significant amount of investment in the rural water schemes and those programmes. In fact, while the amount was probably around the €40 million mark in the past couple of years, the estimate for the current year is €60 million to try to bring many of those rural local schemes up to a higher standard, to implement repairs and connections, and to support communities in terms of their endeavours in those spaces. That investment programme, as I said, has been given quite a significant element of additional resources so we would hope to see improvements of the order the Deputy is seeking.
Will the Department devise a new scheme for small settlements and villages where projects are shovel-ready and where the local authority says it is ready to go and would like to bid for a scheme that might be devised?
The Department might come back to the committee with a schedule to try to improve the inspection regime. The point raised by Deputy Sherlock is very important. The virtual inspections do not work and there have to be physical inspections. Many of the smaller local authorities do not have the personnel to do it. They might have one person who is shared with planning enforcement, and the person could be wearing three or four hats. It needs attention because of the sheer scale of it. The Department should come back with a detailed note on that for the Deputy and the committee.
I call Deputy Catherine Murphy.
I welcome the witnesses. There are so many topics that it is difficult to narrow down the ones we really want to go after. I endorse some of the points that have been made regarding the inspections regime and HAP because the tenant is very often not in a position to make the complaints and the notice to quit can arrive following a complaint.
I want to start with the retrofit scheme. The Department provided funding to each local authority last year for local authority houses and €27,000 was provided for a refurbishment to bring the unit up to a B rating. That is €10,000 short of the experience of some local authorities in terms of the actual cost. Was it intended that this was going to be the full cost of retrofitting those homes and how did the Department quantify that?
I can see a scenario where we do not get the outcome. The Department allocates the money but because it is inadequate, local authorities do not have a source to match the funding if they are going to be out by a very sizeable amount, and we do not actually get delivery on the allocation. From a value-for-money perspective, the Department might as well not provide the money if the money is not available to actually do the job. Will the Department conduct a review of that funding?
An old chestnut that I raise every time the Department appears before the committee is the local property tax. In his opening statement, Mr. Doyle said a further €91.5 million was made available from local property tax receipts to fund housing programmes in certain local authorities.
We know there is a self-funding aspect for roads and housing as part of this scheme.
The difficulty is with the baselines. For example, there is increased buoyancy in the local property tax fund by virtue of the fact that properties built from 2013 had not been within the system but have been brought into it now. There has been no commensurate increase in the baseline, however. A local authority like Fingal County Council, for example, doubled its population between 1996 and 2016, the year of the most recent census, but population does not feature anywhere in the allocation provided. The Comptroller and Auditor General was very kind in his opening statement when he said it was a "complex" system of funding local authorities. It is Byzantine rather than complex in my opinion. What will be done about the baselines?
Ms Lorraine O'Donoghue:
We discussed the matter in this forum on a number of occasions. We have been stymied somewhat by the timing of the local property tax revaluation process but in anticipation of the question from the Deputy, I received an update from the Revenue Commissioners yesterday evening. As of yet we have not commenced our review of the baselines because we do not have the data on the local property tax receipts per local authority basis from the Revenue Commissioners. We made a commitment in writing to individual local authorities and it has also been put in the local property tax circulars that issued for 2022 that we intend to review the local property tax baseline model as soon as we have the available data.
Ms Lorraine O'Donoghue:
Yes, it is one of a number of indicators we have identified. We have engaged with the Central Statistics Office but, as the Deputy knows, Covid-19 has delayed the national census and it will take place later this year. We are looking at alternative sources of reliable, robust and transparent data that can inform that process. We may have to take a hybrid approach in 2022 and we are working to the commitment in the programme for Government.
I will certainly be coming back to this. I thank Ms O'Donoghue.
We have seen the use of long leasing increasing in the past couple of years, and it is reflected to some extent in the figures. It was at a low level but has escalated. In advance of that scheme escalating - I know it is intended to dispense with this in the lifetime of the Government - what work indicating value for money was done? Typically in this case, a housing estate is built and the local authority will take a lease for up to 25 years, committing to a rent review every four years. It will pay between 80% and 90% of market rents depending on the level of maintenance and will then return the property at the end, with it being refurbished prior to being returned. The authority does not have an asset at the end. What value-for-money exercise was done and what period did it take in? Was it for the lifetime of the scheme? How did that feed into the policy process?
Mr. Graham Doyle:
The first thing to say about value for money in any of these schemes is that there is a range of issues. There is the question of flexibility and availability of various housing solutions and whether they can be put in place quickly. There is also the question of sectoral capacity to deliver and the response to the social housing need element. I know we have worked with the Department of Public Expenditure and Reform in determining value for money in a range of these schemes. Over recent years there was certainly a pick-up in that form of both standard and enhanced leasing. It was a way to deliver significant numbers-----
Where is the value for money over the lifetime of the scheme? It is for a very long time as the authority is committing to pay over 25 years and there is no asset at the end. What work can be shown to this committee on the value-for-money aspect of the scheme in advance of it being escalated?
Ms Áine Stapleton:
I could point to a few areas that may be helpful. Our colleagues in the Irish Government Economic and Evaluation Service, IGEES, in the Department of Public Expenditure and Reform have conducted a number of spending reviews around the areas of social housing, looking recently at the social housing current expenditure programme, SHCEP, and the value for money in leasing. In addition, each leasing proposal is rigorously assessed before it gains approval and we use the expertise of the Housing Agency to assist in that as well.
Ms Áine Stapleton:
The Department of Public Expenditure and Reform would certainly have looked at comparisons with other delivery streams. One of the elements we are conscious of in making that direct comparison and looking at the capital cost of direct build is that we would not, for example, take in the costs of ongoing maintenance for a structure, as that is captured in leasing costs. It is not always a direct or like-for-like comparison. As the Secretary General has said, we also look at value for money in alternative options for delivering in the area. The local authority may not have a landholding and the housing need would be assessed.
Will the witnesses revert with a full response on the value-for-money aspect, whether it is from the Department dealing with public expenditure or housing? This is a very large amount of money and, as I said, there is no asset at the end.
There is an affordable housing option in which local authorities are supposed to have a role. Have staff been specifically allocated to local authorities for that? My understanding is that has not happened and there is concern that the local authorities are being given work to do without being given the resources to do it?
Ms Caroline Timmons:
We are currently reviewing the housing action plans given to us in December. We are meeting representatives from many local authorities delivering affordable housing this week and next week in advance of housing summits. We have committed to assessing their need for additional staff for affordable housing and they are now getting a letter asking them to outline how many staff are required to deliver what they set out in the plan. We will be doing a process very similar to the social housing process last year for that. They are aware that is coming for them. I agree with the Deputy that the authorities must absolutely be staffed to do the work.
I will come back to the State subsidies to private rental properties. In total, €893 million was spent on rent subsidies in 2021, including HAP, RAS and long-term leasing etc. Does the Department believe we could reach the €1 billion figure for rent subsidies in 2022?
Mr. Graham Doyle:
That is certainly not what we have budgeted for in 2022. With these current schemes, people ultimately needed to be housed while a build programme was put in place and ramped up over time.
We are very much committed to new build and to delivering social housing in these places, as is Housing for All.
Mr. Graham Doyle:
I cannot see how we would reach €1 billion in rent subsidies. With regard to how we categorise our expenditure across that area, expenditure on the housing assistance payment, HAP, and rental accommodation scheme, RAS, amounted to €721 million in 2021. We also use other forms of leasing, including the types Deputy Catherine Murphy referred to. In 2021, expenditure on these was in the order of €57 million. Beyond that-----
The overall total for last year comes to €893 million, which is not too far off €1 billion. Mr. Doyle would surely accept that there has been a shift away from building social homes and towards providing rental subsidies to private landlords. That is the idea of HAP and all of that. There is the possibility that a figure of €1 billion in rent subsidies could be reached.
Mr. Graham Doyle:
The element of the social housing current expenditure programme, SHCEP, that relates to the private piece, the leases the Deputy is referring to, amounted to €57 million. Much of that SHCEP goes towards payment and availability agreement payments to approved housing bodies. It is high but not high enough to justify the Deputy's fear of breaching the €1 billion mark. In terms of shifting away from-----
We are not too far off the figure of €1 billion. It is now the policy to put people into private rented accommodation. I was on Louth County Council back in 2013 and 2014 when that council was chosen to be one of the local authorities to implement the scheme on a pilot basis. Even at that time, it was obvious that the policy was to shove people into private rented accommodation and that they were then to be considered as having been dealt with. In earlier comments, it was stated that the Department had not reviewed the maximum rent payment since 2017 when rents have gone up by approximately 8% year-on-year since 2015. Why would the Department not review those payments?
Ms Áine Stapleton:
I will also just mention that, with regard to the balance of expenditure between these types of schemes and new build social homes, that ratio was approximately 50:50 in 2016. In 2022, approximately 25% will go towards supporting tenancies through HAP, RAS and rent supplement under the Department of Social Protection while 75% will go towards new build social homes. The trajectory is very much towards the delivery of additional social homes. We hope that over time we will see a decline in the overall reliance on schemes such as HAP as additional social homes are delivered. Colleagues in the Department of Public Expenditure and Reform engage with us on that.
With regard to the rent limits, as we touched on earlier, we are committed under Housing for All to look at a review of the level of the discretionary element, the 20% for standard HAP tenants.
Given that the Department is looking at reviewing the rent limits and top-up payments for the first time since 2015, knowing the hardship it has put people receiving HAP through, will Ms Stapleton tell me how many tenants are currently paying top-up payments and how much they are paying in such top-ups?
What does that say about the Department? I will come back to my original point. HAP was designed to shove people into private rented accommodation. There have been no reviews of rent payments. There is a scandalous inspection regime. No information has been gathered on the number of tenants paying top-ups or on the value of these payments. Given the rates, any income or support a person who has been in receipt of HAP since its inception receives is totally wiped out because of the rent subsidy. Do not give me Housing for All. We are on the brink of spending €1 billion in public money on private rent subsidies and, up to now, the Department has had no intention of implementing a diligent inspection regime despite the amount of public money being spent. It could not give a toss as to whether people in receipt of HAP were paying top-up payments. It did not gather that information. It has no idea how many were forced to pay top-ups. It just turned a blind eye to the matter. It does not know how much these top-ups are costing people.
Mr. Graham Doyle:
To date, we have used the discretion given to local authorities to increase the levels of HAP available to people as a way to bridge the gaps. We have obviously seen rents increase significantly over time. The latest piece of work is aimed at addressing that. To date, we have used----
I apologise for the delay in joining the meeting. I will turn to the issue of funding to Irish Water and local authorities in respect of stand-alone sewage treatment facilities. I have a concern, which I have raised in the Dáil in the last week. The response I am getting is that there is a large number of stand-alone treatment facilities.
There is a huge number of these stand-alone treatment facilities, a large number of which were built in the period 1998 to 2008. Irish Water is not taking them in charge. If Irish Water will not take these treatment facilities in charge, the local authorities are not prepared to take the estates in charge. What assessment has the Department done on the number of these treatment facilities? I became aware of one in the past two weeks where raw sewage is pouring out of it. It is contaminating local waterways. The local authority technically had no obligation to deal with it. In fairness, Cork County Council did deal with the issue when it was raised with them, but nobody has responsibility for the maintenance of these treatment facilities. What is the Department doing on this? What work has the Department done in assessing the numbers of houses and housing estates that are directly affected?
Mr. Graham Doyle:
In general terms regarding the rural water programme, a range of capital grants will apply over a three-year multi-annual programme around that. The funding in 2020 was in the order of €44 million. It is my understanding that this is up to an estimate of €62 million or €63 million in the current year.
I understand that €3.26 million was allocated to local authorities to bring some of these treatment plants up, so that they could be taken in charge by Irish Water. I got the figure of €3.26 million.
Ms Maria Graham:
The Deputy raised the study done a number of years ago around stand-alone estates. At quarter 4 in 2019 Irish Water assessed that there are probably 566 estates, but this number keeps evolving as they are taken in charge. They vary among estates from some that are just wastewater to those that have both wastewater and drinking water, and then some are stand-alone. With the stand-alone estates, they were developed at a time the developer would have put in the works and they were not connected to the public network. There is a process in place with an expert panel and a multi-annual programme under the national development plan to bring solutions for these estates.
Does Ms Graham not accept that there are two problems major problems here? First, there is an environmental issue, where there is no-one actually in charge of maintaining these facilities. Second, people have purchased houses and paid a substantial amount for them but they are now in a situation where if anything goes wrong on the estate, the local authority will not do anything for them. They are taxpayers, they have paid substantial amounts for their houses, and the local authority received contributions from the developer at the time these estates were built. Can we prioritise this issue? The way we are going now, I will still be asking the same question in 15 years at the rate it is going at the moment. Does the Department accept that the way it is being managed is not appropriate?
Ms Maria Graham:
There was recognition that there is a problem because these facilities are privately owned. The State has stepped in with funding and a multi-annual programme. Part of the solution for some of these estates is to transfer to Irish Water. The next multi-annual programme with the €7 million spend for 2022 is being put in place. It is progressively working through the issue.
Is there a specific target or time period by which all of these will be dealt with? Ms Graham said that these are privately owned, but it must be remembered that the local authorities received contributions from the builders. Many of the companies involved in building these houses ended up in NAMA, and, therefore, there is no one that these people can come back at. Another issue is that many of the bonds that were put in place by the builders were not drawn down to assist the local authorities in finalising the work that needed to be done.
Ms Maria Graham:
The multi-annual programme is a bid to local authorities. The local authorities can submit the bids for the facilities they wish to have fixed. Substantial funding is available this year and a new bid round is to happen this year. In this way, it allows us to progressively work through sorting out those estates.
Does Ms Graham accept that there is a bit of buck passing going on here? The Department is saying that it is a local authority issue, the local authorities are saying they cannot get the funding, and Irish Water is saying it is not their problem because they do not have any responsibility. Can we get everyone around the table and say that this is the programme for the next four years so we can get on and do it, to make sure there is no damage to the environment, and to make sure that the local authorities can take over the estates and provide services to people who are living on them?
Ms Maria Graham:
There is recognition that there needs to be a multi-annual programme, and this is why it has been moved forward as a multi-annual programme. There is an expert panel, independently chaired by a former chief executive of local authorities, and it includes the Environmental Protection Agency, precisely from the environmental perspective the Deputy has referred to. There is funding, annually and under the national development plan, and a commitment to deal with this, and there is the process in place that allows it. Some of these estates are very far from public water connections and it can cause a difficulty in the timing of connections to the public system.
I want to also touch on another issue, which is voluntary housing agencies buying up housing estates. Whereas a private developer has an obligation to provide a certain number of houses for social housing, when voluntary housing agencies come in, they are buying up entire estates. Then, the person who may want to buy a house there is excluded from the whole area. I have come across a number of cases recently where young people cannot buy in their own area because all the houses are being bought up by the voluntary housing agencies. Part of this issue is that on the one hand private development must provide a percentage for social and affordable housing but there is no obligation on a voluntary housing agency to make sure that people who want to buy can also do that. There is not a certain percentage that can be bought privately.
Mr. Graham Doyle:
When it comes to a housing project funded through an approved housing body, that is funded and driven through the local housing authority. The approved housing body must engage and clearly liaise with the local authority around those projects and programmes and in that way hope to achieve the balance that the Deputy refers to. In some instances in individual projects, sometimes people will raise the issue that the balance is not sufficient, but the local authority and the planning system must try, and particularly the local authorities around the planning-----
This is a case where developers have received planning permissions for building estates, and they intended selling privately, but housing agencies come in. When a housing agency or a voluntary housing agency buy, it is one transaction. Whether it is for 20, 50,or 80 houses, it is one transaction.
It is very attractive from a developer point of view but it is not very good for an area where young people want to buy because they are being excluded from the market. What is the policy of the Department down to local authorities? Surely there are some guidelines for local authorities on this issue.
Ms Áine Stapleton:
It is an important consideration and one of the criteria on which an approved housing body must satisfy itself and the local authority before it comes to us for approval is that the development is meeting sustainable communities objectives and that there is an appropriate tenure mix within the area. Both the local authority and the Department, through the Housing Agency, in assessing applications for capital advance leasing facility, CALF, funding will always have regard to that sustainable communities consideration.
I am sorry but I have not seen that happening recently. The situation is that anyone who wants to buy privately has to go 10 miles away to find a house to buy. They are being excluded from the market in the area that they grew up in and went to school and college in because all of these houses are being purchased by the voluntary housing agencies.
I welcome Mr. Doyle and his colleagues and thank them for attending. I want to go back to the issue of private subsidies in the context of delivering on housing need. The expenditure for the accounts with which we are dealing, to 2020, on the HAP scheme was €464 million, is that correct?
The figures I have are that in 2020 the expenditure on rent supplement was €95 million, while last year it was €123 million. That seems to be a substantial increase. Does Mr. Doyle have a rationale for why that is the case?
Mr. Graham Doyle:
The core funding for emergency accommodation has gone up a little. There was a big jump in that subhead from 2019 to 2020, and that was very much related to the pandemic. There was a very high level of homelessness - there still is - but it was particularly high at the end of 2019, going into 2021. Between the pandemic and additional funding provided to support homeless services in that year, there was a very large increase in the amount of Exchequer funding provided that year. That came down last year, as the Deputy stated. The Deputy may be about to ask me about 2022. That figure is €194 million, which, if we compare it with 2019 in terms of a more representative year, is a significant additional amount of funding.
It comes from a different Department. I refer to the estimated outturns of €585 million for HAP and €133 million for RAS. I will assume rent supplement will remain static in the context of the upward trajectory we have seen, giving a figure of €123 million. The amount for emergency accommodation is €194 million. If we also take into account the figures Mr. Doyle cannot give us, that is, the private contribution towards HAP tenancies, as well as other contributions that are forced on tenants in this regard, it is fair to say that, across the schemes, well over €1 billion will be spent this year.
Essentially, what we are talking about here is people who are availing of schemes that involve subsidies to private interests. In most instances, those people would be better served by, and much prefer to be housed in, a direct social housing scheme, as was traditionally the case.
The Department's trajectory was mentioned earlier on. The ratio referenced for 2017 was 50:50 in terms of what would be spent on subsidisation versus capital and the trajectory was to move that to 75:25.
If we go back to the year of appropriation, when we are talking about €464 million for HAP; €133 million for RAS; €95 million for rent supplement and €271 million for emergency accommodation. Mr. Doyle was indicating there was a distinction between some of the SHCEP scheme funding in terms of private leasing arrangements and others, which I gather are approved housing bodies. What would the breakdown of that €191 million have been for the-----
Mr. Graham Doyle:
The last time I was here, Deputy Carthy gave me a fair rattle with regard to long-term and enhanced leasing, which I can completely understand. I know he is specifically interested in those. The long-term and enhanced leasing was just over €37 million. There are a range of other programmes included under that. Some is leasing from the National Asset Residential Property Service, NARPS, programme, which is an National Development Finance Agency, NDFA, type social housing programme. The biggest piece of that programme is under the CALF, the AHB funding piece in terms of payment and availability. That is €114 million.
I will follow on from that. In terms of the outturn of houses for each of those three years, what did we get for €890 million and €961 million? What do we expect to get at the end of this year in terms of houses available to those who need them?
Deputy Devlin will join us. He is on other parliamentary duty. Deputy James O'Connor is due to join us. I have some questions. I will revert to rent subsidies. Broadly speaking, one has RAS, HAP and capital leasing. I am going by the Department's Estimates for 2022 on page 9 of the briefing note. Some €293 million is budgeted for capital leasing under subhead A11.
There is €12 million for repair and lease. The previous year, there was €123 million on rent supplements, not from the Department of Housing, Local Government and Heritage, but from the Department of Social Protection. I assume that will be approximately the same amount because many people in emergency situations, such as victims of domestic violence, are on rent supplement. I totalled those up to come to €1.145 billion in rent supplements estimated for this year, if one takes that the figure for rent supplements from the Department of Social Protection will be similar. Added to that will be the €233 million for emergency accommodation in the budget. I think it is €233 million. One is looking at a figure in the region of €1.4 billion.
I do not want to labour on the general concern because it has been fleshed out here. I accept the Department has to implement Government policy, but one is looking at approximately €1.4 billion on subsidisation of private rental accommodation. We have to do so in the short term because people have to be housed. However, the concern is that, year on year, it has grown steadily. I recall very well when rent supplements were first brought in. It was a temporary interim measure until people got social housing or bought a house or an affordable house at the time. They were very good schemes. The concern here is that one is looking at a situation in which one is heading for €1.4 billion or €1.5 billion per year in rent supplement. I wanted to make that point.
There were 3,611 of the 10,300 houses scheduled for 2021 at the end of the first nine months. Those are the figures we got from the Department earlier on. What is the projection in terms of filling that gap? There is a gap of approximately 6,200 houses. What is the projection for quarter 4 in terms of social housing? How many social housing builds will we have at the end of 2021? What is the projection? I know the Department does not have the exact figure.
Ms Áine Stapleton:
We do not have the confirmed figures at this stage. I am reluctant to put a figure on it. We anticipate that the build level for 2021 as a whole will be higher than the build output for 2020 and that we will see the leasing and acquisitions in line with, or maybe slightly ahead of, target.
We will come in at approximately half of the target envisaged.
I note that in the lockdown this time last year social housing projects were continued. There is one very close to my area and I spoke to one of the officials about it during the break. That continued and did not stop during the lockdown. Okay, Covid had an effect, but it did not close down social housing construction. We barely hit half the target for the year. That is a concern. It suggests a couple of things. One is that there are huge delays in local authority approvals. There is also the fact that every estate has to have a separate architectural design carried out. There is a cost there. I know that at one time up to 7% of the cost was allowed for architectural design. I do not want everything to look like the Soviet Union in the 1950s, but we could have a specialised design for one-bedroom, two-bedroom, three-bedroom, four-bedroom and five-bedroom houses as well as for single storey, two storey, disabled access, wheelchair access and so forth. We should be able to move to a situation where we are not starting with a blank canvas. I am just making that point. I have spoken to Ministers about it in the past and I am raising it with you today.
It is something we need to do.
I will return to the supplements for a moment. The figure of 28% is on the basis of figures given. They are received, the Comptroller and Auditor General looks at them and you look at them. I understand that; that is what you are getting. However, I can tell you that people who are not paying top-ups are the exception, including for constituents who are in private rented accommodation who come to my office. I cannot remember a time when I spoke to a HAP tenant who is not paying a top-up. I am saying this truthfully. I recall saying that to the former Deputy, Joan Burton, in the Dáil seven years ago. That has accelerated and the gap is widening for the top-up. I welcome the fact that there is discretion there of 20% and 50% where there is a risk of homelessness, but we are chasing accelerating rents. We saw the rent figures last week from Daft.ie. That is just one of the indicators. The true figures for the cost of rent are not being shown in official figures because what tenants are paying is far in excess of that. What is the legal situation regarding these top-ups?
My understanding, and perhaps I was naive at the time, is that if landlords got into the HAP scheme, they could not charge top-ups, but they are crucifying people. There is a human side to this. The human side is that tenants, people who are working, are paying over half their wages in rent. They are absolutely crucified. It is tormenting them and it is breaking them financially and emotionally. It is breaking up relationships. I have seen it. Every other Deputy here and county councillors around the country will tell the same story. What is happening is serious. It is a very difficult situation. We have to use private rented accommodation, and I accept that we are trying to move away from it and the sooner, the better. I understand that it is a chicken and egg situation and that we have to deal with the real world, but the faster we can provide housing, the better. Meanwhile, we have to do something about that situation. It is very important.
That 28% is not real. In my experience, at least 95% of the tenants I meet are paying top-ups, and substantial top-ups, along with paying the rent to the council. They pay what is called the differential rent to the council, in other words the same rent as if one is in a council house, be it €50, €60, €70, €80 or €100 per week. That is fine; they are more than happy to do that. However, they do not have security of tenure and, as was mentioned earlier, if they complain about the condition of the place or the like, there is no mechanism to deal with that. In addition, they are paying the under-the-counter payment to the landlord and there is no control. Nobody has a handle on this. This has gone wild, and no words that I can say to you this morning can emphasise it. The reason I feel so strongly about it is that I am meeting people who are absolutely broken in every way. I want to convey that to the officials here. I have said it to Ministers. I know you are handed a policy and you have to implement it, but I want to convey to you that we are dealing with a crisis here for people and it is having an effect. People talk about Covid-19 and mental health, but one of the biggest drivers of the mental health crisis is financial torment. I emphasise that to you.
The other issue I wish to raise relates to the emergency accommodation. That figure of €270 million spent on it in 2021 is substantial. I see that it is revised downwards. How much oversight does the Department have of the tendering process for that and the procurement? Briefly, does the Department provide guidelines and codes of practice to the local authorities?
Mr. Graham Doyle:
That point should be made. I am not denying the point you were trying to make earlier, Chairman, when you were adding up the different programmes. The social housing current expenditure programme, SHCEP, is funding approved housing bodies to provide housing through the capital assistance scheme, CAS, which is different from some of the other points you were making. However, I do not deny the principle.
Ms Caroline Timmons:
Regarding the funding arrangements for homeless services, all funding arrangements are delegated under the protocols that we have with the regional authorities. We oblige the local authorities to ensure compliance with the statutory requirements and public financial procedures, including the public spending code and obligations under the Department of Public Expenditure and Reform Circular 13/2014 - Management of and Accountability for Grants from Exchequer Funds. We have reporting requirements in respect of the expenditure incurred on the provision of services. There is a requirement to ensure that certified expenditure is reported to the Department each quarter. It provides details of the expenditure incurred with the actual report being certified by the head of finance and the director of services for housing of the regional lead authority. That is reviewed by the Department to ensure compliance with the terms of the protocol. Then the certified expenditure reports are published on the Department's websites, and that is available up to 2020.
With regard to the point you were getting to, Chairman, we have referred back to them regarding the local government audit service and, obviously, clearly pointed to the idea that it is necessary to do procurement to achieve best value for money. That has been taken on board by the DRHE which was recently before the Oireachtas committee and reporting on its efforts to procure services.
I have a question about the occupancy of emergency accommodation. There was an example in Holybrook Park, Clontarf, where Dublin City Council leased a house from private interests for emergency accommodation. My understanding is that the council was boxed into a situation. A person owned the property next door and a situation arose whereby the council was not going to get one without the other, but the other properly lay empty for two years. That is my information. My question is on the general point relating to occupancy. If the local authorities are leasing these properties for homeless accommodation, what kind of value are we getting? What is the percentage of vacancy in those?
There is another point relating to private rented accommodation. It is costing €7,800 per unit. Then, as I mentioned, the tenant in most cases pays a differential rent and also pays the top-up. The real cost of the unit, therefore, is far in excess of €7,800. That is the cost to the State and I accept that is the accurate figure you are giving. However, that is the 2020 figure. What is the cost per unit for the State expected to be this year, excluding the top-up by the tenant and the payment of rent to the local authority?
Ms Áine Stapleton:
You mentioned, Chairman, architectural design and separate designs having to be done by each individual local authority. The Department published a design manual for quality housing in January, which sets out standard layouts and gives guidance to local authorities and the AHB sector. It will help internal teams, but also if an outsourced design team is being briefed, this can now become a guide it can use for standard design.
I welcome the officials before the committee. The work they are doing is extraordinarily important. The hopes and dreams of an entire generation are on their shoulders. As a 24-year old, the youngest Deputy in Dáil Éireann and the youngest Member of the Oireachtas, I am extremely concerned about the pace of delivery. How much of a surplus was there in the previous year's expenditure in terms of what was unspent?
Ms Marguerite Ryan:
It was primarily related to the slowdown in the construction sector. In each of the major capital programmes, the expenditure slowed. We worked with the Department of Public Expenditure and Reform to use the capital carry-over process to bring that funding forward into the following year where it could be added to what we were going to be doing in the following year. The surrender to the Exchequer was much smaller, in the order of €10 million to €12 million. I can check the figure. We did not lose the €214 million we brought with us.
My next question relates to Rebuilding Ireland. Am I correct in saying there is a mechanism within local authorities to allow them to work with developers to complete unfinished housing estates, for example, and for the development of land to build housing?
Does Ms Graham have an approximate figure for how many housing estates or housing units are under development in that area? While she is trying to locate that answer, I might embellish my point. The reason I ask the question is it has been brought to my attention that issues have arisen in some parts of the country in cases where there are tripartite agreements, where there are developers working alongside building contractors and local authorities. If one element of the deal collapses, the result is houses throughout the country that are under construction cannot be finished due to liquidity problems with the developers that are being supported with direct funding devolved through the Department to the local authorities. Is Ms Graham in a position to tell me how many schemes throughout the country are in some degree of trouble? I would welcome if she could give me any details in regard to that issue.
Ms Maria Graham:
At the time of Housing for All, based on a 2020 survey, which we will be updating shortly, there were 123 developments, of which 58 were unoccupied. At the time of the survey there were 326 houses vacant and 13 apartments. We do a survey of unfinished housing estates annually, and we will be updating it. These are very much the legacy cases. If issues emerge of the type to which the Deputy refers, we can work with local authorities to work through it. The process involves working through whatever bonds or issues are concerned to bring those estates back into use.
I am a rural Deputy, and it is common in every constituency outside of Dublin to have a lot of small contractors and builders. They say that when they want to get involved in the building of houses, accessing credit is an enormous issue for them. There is something profoundly wrong about the Rebuilding Ireland scheme. A small builder who has a crew on the ground and opportunities to scale up, bring in a local workforce and train people to work in building should have just as much of a chance to get involved in trying to solve the housing crisis as large developers. That is something the Department should put a degree of focus on in the next 12 months. Small builders have a role to play, but they are being locked out of the market. Effectively, it would be common for a small or medium-sized rural builder involved in one-off housing construction in rural areas to complete 20 dwellings in a year. They would like to get involved in the construction of housing estates, but if they go to the bank, the bank will tell them where to go. That is unacceptable, considering the circumstances where we find ourselves now. Is that something Mr. Doyle could look at?
Ms Caroline Timmons:
The Deputy is absolutely right. An issue was identified throughout the course of Rebuilding Ireland and into Housing for All. There is a section in the latter about how to fund small builders in rural areas to keep regional development coming. HBFI was set up by the Department of Finance a couple of years back to do specifically that. What it does is it goes out with the Construction Industry Federation, CIF, to the regions and encourages local builders to attend meetings and talk to it about the finances it can give them.
Deputy O'Connor is correct that there is an issue with the pillar banks. What HBFI will do, if a builder is refused finance by the pillar banks, is examine the development and help to bring it forward. It has been quite successful in that regard. There is a good amount of publication on the website on the developers it is supporting and what the spread is around the country. We have put forward a solution in Housing for All with HBFI in that respect, but there is also a working group on investment at the level of Housing for All and it is chaired at Secretary General level. We will keep an eye on whether the level of investment is available to those types of builders as well as the larger builders. Does that answer the question?
Is there not an opportunity to kick out the middleman, as such, in terms of getting the councils directly in contact with smaller builders rather than having to work with a developer? To many, a developer might appear to be a large conglomerate or a multimillionaire, but in many cases there are people throughout the country who may just own land that is zoned, who can create a company and source finance from whatever source to technically become a developer. There are huge risks involved in that because they may go bust or liquidity issues may arise in the middle of a build and the building contractor can be left high and dry, often accruing enormous debt. If they are building hundreds of housing units, there could be millions of euro involved. Is there an opportunity for the Department to look at that specific issue and to remove the need for a middleman to bring in a more efficient and effective system of house building? The reason I am pursuing this line of questioning is that my point is very applicable to rural towns and villages.
Ms Caroline Timmons:
I see the point Deputy O'Connor is making. It is not that it is a bad idea in theory, but in terms of the point he makes on risk, there is a reason there are developers in the market. It is because they know how to access finance and how to get it done, whereas it might be a great idea for somebody who just owns a field if he or she could work with the local authority – we would not stop them doing that – but generally they would not have the experience or the expertise to know how to do it. That is a riskier prospect if it is not tried and tested. Through infrastructure programmes like the local infrastructure housing activation fund, LIHAF, where we have brought forward infrastructure in areas and we have asked for housing to be developed, we have seen people who own the land partner with the developer in some respect so that they have that expertise brought in with them.
In principle, it is not a bad idea and we would not object to it. It is that the necessary expertise to buy off the level of risk for first-time developers of their own land needs to be brought in. The local authorities could work with people who want to do that, and they do partner in many of those infrastructure projects to bring forward housing.
My time is precious and it is very important that I ask final question, which is about the access of serviced land. My constituency, East Cork, has one of the most important strategic growth zones for housing in the country, the metropolitan area of Cork city. The Department is probably familiar with the number of strategic housing developments, SHDs, ongoing in that area. From talking to people on the ground who are involved in building, they cannot get grounds that are serviced, be it access to water supply or sewage treatment. Is that something the Department will look at, because it is holding up the development of, potentially, thousands of houses that could be built in areas that are already serviced by motorway-grade roads or dual train track lines? It is mind-boggling how Irish Water can get away with what it is getting away with. It is an omnishambles of an organisation and it is appalling that it does not have the level of focus it should have, in the context of holding up housing development in this country. What is the Department doing to speed up the level of development when it comes to serviced lands?
Mr. Graham Doyle:
There is one particular stream under Housing for All that we chaired at Secretary General level. It relates to the public sector deliveries piece and what the barriers are and how to remove them where we can. We have engaged with Irish Water. It attended about two thirds of that group's meetings on that issue. It is something we have certainly put a focus on. I know Ms Graham has done work on this in the past and she might add to that quickly.
Ms Maria Graham:
It is one of the focuses of the national planning framework and flows into the local authority plans. That alignment with the national development plan is to ensure that there is servicing and the servicing of land is prioritised in the areas that need to grow. On a broad Project Ireland level, that is something the Secretary General group looks at.
Specifically on Irish Water, following on from Housing for All, it has established a unit to look after housing that draws across its programmes. It looks at the growth areas. It produced wastewater and water capacity to see where there was capacity and focused on delivery, the connections and the timeliness of connections. Irish Water has been doing quite a bit of work with the Commission for Regulation of Utilities in order to ensure its investment programmes align with what we need under Housing for All.
In 2022, the capital investment for Irish Water will go up by 20%. From what the Secretary General said, Irish Water has been in to talk to the high-level group twice.
Good morning everyone. I will start with the governance structures for the housing assistance payment, HAP, as outlined under chapter 8 of the document we have been given. I am not sure to whom I am addressing this question. I had to also attend the Joint Committee on Disability Matters this morning. The tender won by Limerick City and County Council, LCCC, was very helpfully outlined, as well as its oversight and role. The document also includes a reference to the Dublin Region Homeless Executive, DRHE. Will one of the witnesses outline its interaction and role in that?
Maybe I will go to my questions, because we have the overview in the information provided to the committee. Perhaps someone can give me an answer to my question on the DRHE when ready. The HAP oversight group met on six occasions in 2015 and met less often as the years went on it. The information provided states it met twice in 2020. How often did it meet in 2021?
Ms Áine Stapleton:
In 2021, we reviewed the governance structures, which contained two tiers. As we established the HAP scheme and moved rent supplement tenancies to HAP, there was an operational phase to that. We had an oversight group and a project board. In 2021, we reviewed the entirety of the governance structures and it aligned very well with the work of the Comptroller and Auditor General. We commissioned an external report on that and we have now set up a single oversight group under a new independent chair. That oversight group is up and running and is working through its work programme.
I take Ms Stapleton's point in that during the changeover from one system to another system, HAP, there is more work at the beginning of the process than at the end. However, when the scheme was introduced in 2014, €400,000 was spent on it and €423 million was spent on it in 2019. It seems we are providing one third of the oversight in that process. I note, from the information we were given, that not only did the group meet less often, from six to two occasions, the average attendance was half of the number of members. The number of members on the oversight board is between nine and 11 people. That suggests there have been four people at a table twice a year giving oversight on HAP. In the notes, I see that the person present on behalf of the Department of Social Protection, was not actually a member of the oversight group. The person was simply an attendee from the Department. Does that provide adequate oversight of the €423 million spending in 2019?
Ms Áine Stapleton:
It is useful to put this in context. When HAP was set up, there was an evolution of rent supplement to HAP. The oversight arrangements were jointly sponsored by the Department with responsibility for housing and the Department of Social Protection. As those processes were worked through, we then entered, what one could call, a stable environment. The reflection that took place in 2021 and that which is very much echoed in the Comptroller and Auditor General's report, is the need to bring that to the next strategic level, to bring an independent chair to the oversight group and to bring a renewed focus. We accept-----
Did that oversight group, in the period between 2014 and quarter 3 of 2021, raise any significant concerns with the Department? Has it made any report or taken the kind of actions one would expect an oversight body to take, such as raising concerns about specific issues?
Ms Áine Stapleton:
The oversight group has a very strong liaison with the Limerick shared services centre. It gets very detailed operational reports from the shared service centre and it discusses them at the oversight group meeting. There is a strong element of oversight and engagement on the emerging trends. What we are now moving towards is bringing that oversight group beyond that operational oversight to have a more strategic focus, which will align with some of the recommendations that have come through in chapter 8 of the Comptroller and Auditor General's report. So, we see that as a strength.
I would appreciate that. I am particularly interested in whether we have good and timely data around, for example, the number of people with disabilities receiving HAP. By those with disabilities, I mean people in receipt of some kind of social welfare payment relating to disability. I am also interested in the number of children in receipt of HAP and the timeliness of the receipt of that information by the oversight committee.
In Vote 34, subhead A13 relates to accommodation for homeless people. That is a huge outlay for the State every year. One piece of information given is that new services continue to be introduced, including additional capacity in Dublin for rough sleepers. During Covid, the push to ensure people could stay in place was much appreciated and incredibly important. Do we have a sense of how much of that new capacity was privately provided services?
Could Ms Timmons return with that information? I am particularly interested in the implementation of the service level agreements, SLAs, with private service providers. We have dealt with it at the Committee of Public Accounts before. The question was whether the Department or anybody related to it required under the SLAs that staff members in privately provided emergency accommodation be Garda vetted.
Ms Caroline Timmons:
I can deal with that issue. We are looking under the SLAs that they would be vetted. There was a piece on that last year in relation to rough sleepers and outreach services which was complicated. That has been addressed in the recent past. The DRHE, as I understand it, is requiring anyone who works directly with a homeless person to be vetted. That may not be all persons-----
Ms Caroline Timmons:
I presume it is someone who has daily contact with the person. That is not an exact definition but DRHE, I understand, looks at who is working with the homeless person. Not all persons in that service might need to be vetted, depending on their role in the service, but they can be vetted.
Ms Caroline Timmons:
I can ask. I do not know whether it is available to the DRHE either. I will come back to the Deputy. It is no problem. It is available to the DRHE to have them Garda vetted if needs be. The DRHE is implementing the national quality standards framework for private emergency accommodation. It is already in place for long-term supported accommodation. The standards of the work the DRHE is doing are good and it is working hard in that respect.
I welcome Mr. Doyle and his colleagues. It is good to have them here again. I thank them for the briefing material they have supplied. It has proven beneficial. I will focus on the Comptroller and Auditor General's opening statement initially. The Comptroller and Auditor referred to HAP. Many questions have already been asked this morning about that scheme. The 20% discretion of local authorities was mentioned and is important. From anecdotal evidence, that is the norm rather than the exception, particularly in my area of Dún Laoghaire-Rathdown. Given the property prices in the area, the council needs to rely on that discretion. I heard what was said of the review that is under way on that. That is welcome.
I am surprised. I thought it would be higher. I thank Mr. Doyle.
My experience chimes with what Deputy Hourigan said in respect of disabilities. I had a case recently involving somebody with a physical disability where the requirement for their accommodation differed from that of an able-bodied person. Therefore, the discretion was not sufficient to secure a property they required. In the review the Department is doing, I ask it to consider that element.
The Department of Public Expenditure and Reform's report found that 28% of HAP tenants were making the top-up payment in the first half of 2019. I do not expect witnesses have the figures today but they might send a note to the committee with figures for 2017 through to 2020 on the top-ups. The examination found the Department did not have information on the proportion of proposed HAP tenancies inspected or the results of those inspections. The Comptroller and Auditor General goes on to say the recommendations have been accepted by the Department and will be implemented, which is welcome. It will be of interest to this committee when that work is compiled.
My colleague, Deputy McAuliffe, referenced Housing for All. I note that Mr. Doyle's term runs concurrently with the introduction of that scheme. Mr Doyle's enthusiasm for the scheme and for delivering on housing is welcome and I thank him for that. Since we have dealt with HAP, will Mr. Doyle touch on RAS? Is it intended to continue to fund RAS for the next year or more?
Mr. Graham Doyle:
It is. We have a budget for it for the current year. We are looking at RAS and will prepare a framework document around its future in the context of Housing for All, which we said we would do it under. We will look at how to wind down the private housing element of that and how CAS and RAS will be managed for AHBs in the future. We have seen a lot of movement in RAS coming through AHBs. There are many more new landlords coming from the AHB sector than from the private sector into RAS at this point. How that works in the context of our overall schemes is something we are looking at.
In the note he sends on, will Mr. Doyle break it down for the four local authorities in Dublin? I suspect RAS is more prevalent in urban than rural areas, but I await the figures.
I turn to the major capital projects mentioned in note 2. It is 2.9.D, pages 18 to 20. There is a reference to 37 housing construction projects funded directly by the Department in 2020, of which projects 28 had expenditure in 2020, totalling €130 million.
Is it possible to give us the number and types of units in those 37 schemes, please?
Yes please, that would be great.
I turn to retrofitting. Since the announcement of the new retrofitting scheme we have all been inundated with queries. I am conscious that some years ago local authorities started retrofitting schemes themselves. There is increased funding for that. My local authority of Dún Laoghaire-Rathdown has made great progress on that. Some schemes are more challenging than others. It can depend on if they own the full block etc. Is there a percentage of how many units each local authority has commenced retrofitting on?
Mr. Graham Doyle:
Yes, it depends on if you are talking about the shallow or deep retrofit. Obviously the deep retrofit is more challenging, physically and financially. Some 75,000 social houses out of 140,000 have had a shallow retrofit, so that is just over 50%. A lot of the social housing stock is new build, which is built to BER rating 2. Offhand, I think that is another 25,000 houses. Quite a proportion of the stock has had some level of retrofit. The challenge is deep retrofits across 36,000 units over the coming years. We are trying to gear-up towards that. In the last year about 800 or 900 were done. There was a significant reluctance among people within the homes to get into that during Covid. That was not really the issue, which was more that of the restrictions. The question is ramping up that. It is a big challenge. Deputy Catherine Murphy mentioned the rising costs in that space earlier. We are focused on working with the local authorities to try and with some advice coming through the Housing Agency too on these issues.
Looking at the voids that were done and the extra funding that was given over the last two years, I presume that shallow retrofits are done at that point as well so therefore the numbers are increasing.
Finally, an issue we have dealt with for some time is the domestic violence refuges. I appreciate the comprehensive update on that. I note Tusla being the lead agency under the capital assistance scheme, CAS. I think the review and the interdepartmental working group that was established found there were nine local authority areas without any domestic violence refuge. Acknowledging that the Department of Housing, Local Government and Heritage is not the lead Department, are such refuges the priority for funding first and foremost for the foreseeable future?
Mr. Graham Doyle:
Yes, in fact I think there is a meeting this evening on this topic. The CAS has funding available, as is in the note. I spoke to the principal officer in charge of the scheme about three weeks ago. His frustration was that he did not have enough schemes coming through. He was very anxious to be spending the money. We will wholeheartedly engage in that process with a view to whatever Tusla and the Department of Justice and the providers on the ground want to deliver. There are a number of areas, as the Deputy said, that they have identified as priorities for funding. It is sometimes difficult for very small AHBs to get into this area. There are some specialised AHBs. We will try to provide additional expertise around that through ourselves and the Housing Agency.
I refer to the general Government deficit, the local government system and the development contributions. There were restrictions on local authorities where they had an income from development contributions. They were not permitted to spend at will after the crash. Is that still the case? If so, what is the accumulation of development contributions for the local authorities?
Irish Water is not audited by the Comptroller and Auditor General. Therefore the Department has a supervisory role around finance. Can the officials describe that role?
Ms Lorraine O'Donoghue:
I will have to write to the committee with the detail. The individual audited reports for 2020 show significant sums that have been transferred to reserves arising from a build up of the development contributions. I have a draft report but not a final report that I can share. I can have a figure.
Mr. Graham Doyle:
The Deputy asked about governance structures in Irish Water, which are significant. There are a number of players. From a departmental perspective, the first and foremost vehicle for that is a shareholder expectation letter that is in place in terms of outlining the Department's relationship with Irish Water, how oversight is done etc. We work with Irish Water. We get specialist advice from NewERA on governance and things like board membership, the CEO, recruitment etc. There is a range of governance around Irish Water from the Environmental Protection Agency, EPA, the Commission for Regulation of Utilities etc.
Mr. Graham Doyle:
From a financial perspective, it is within the shareholder expectation letter and our arrangements, monthly meetings, oversight meetings, management-to-management meetings etc. and the work of NewERA. The Deputy mentioned the audit position. Once the separation is completed, Irish Water falls within the remit of being audited by the Comptroller and Auditor General so it changes at that point.
I will return to some of my earlier points that I did not get to conclude. Mr. Doyle mentioned an estimated 10,000 additional people on HAP by the end of the year. As the budgets for other schemes are not projected to fall, I assume that figure relates to new entrants. Is it fair to say that these are people who are not in receipt of any subsidised support?
One of the items I did not touch on earlier was cost rental. The Department is estimating 2,000 new cost rental homes per year until 2030. I noted there were very quick turnarounds on the calls to the AHBs. There was one call on 14 December with a closing date of 5 January but the decision was made very shortly after that on 8 February. That is good because it means that there are quick decisions and turnarounds, and that the money is there. How many sites are currently earmarked across the State for cost rental? How many units are there in total? Do our guests have those figures?
Mr. Graham Doyle:
Ms Timmons has those figures. The Deputy referred to the cost rental equity loan, CREL, scheme, under which we have done two calls. We are now going to move to a rolling call from this point forward so that we are not waiting for a point in time. We are going to try to keep a throughput coming through.
Ms Caroline Timmons:
As the Deputy noted, we have an AHB pipeline under the CREL scheme. We also have some local authority delivery on the Enniskerry Road, with which the Deputy is probably familiar. Our initial projections suggest that in quarter 1, there will be 50 cost rental homes in the Enniskerry development and another 22 in Parklands, which will come on board shortly, within this quarter. In quarter 2, there will be 74 in a Clondalkin development, 16 in Leixlip, a further 22 in Citywest, another 11 on a Dublin site we have not announced yet and 46 on a Kildare site.
In quarter 3, there will be another 73 in one area of Cork and 16 in another. There will also be 50 in one development in Newbridge and two in another.
In quarter 4, we are expecting a whole host of homes to come on stream. There will be seven in one area of Fingal and 31 in another. There will be 16 in one development in Cork and 24 in another. There will be 48 in Newbridge, eight in Drogheda and 40 in another area of Kildare. There will be 45 in Navan, 22 in Meath, 12 in another area of Cork and another 81 in a north Dublin site.
We have not announced all of those developments yet because there are commercial agreements to be finished and I cannot give the Deputy the exact details. However, we have a lot of developments coming forward under that particular programme. We are fairly confident of hitting those targets this year.
On affordable cost rental and affordable housing, how many units were delivered? I know the Department does not have complete figures for 2021. How many cost rentals were delivered in the first nine months of the year?
I just wanted to clarify that. I will ask about the thresholds for social housing. One's income has to be under a certain level before one can go on the social housing waiting list. Those figures, as I recall, have not been reviewed since 2011. Different people, including Ministers, told me as far back as two years ago that a review was happening. There are some answers to parliamentary questions submitted by me and others on this issue. There is a problem there at the moment. Let us take the rural counties of Laois and Offaly as an example. The threshold is €480 for a single person. If one's income is €2 or €3 over that threshold, one cannot apply for social housing. The threshold for a couple with three children is €536, from memory. If such a family has an income of €537, €538 or €539, that family of five cannot get on the housing waiting list. We have arrived at a situation where a labourer, a general worker on the county council, and his or her family, cannot get on the social housing waiting list. Cleaners cannot get on the social housing waiting list. People who are working as labourers on building sites cannot get on the waiting list. People who are working as domestics in kitchens or as home helps cannot get on the waiting list. The lowest paid workers in the State cannot get on the waiting list. That is the situation we have arrived at. Of course, they cannot get a mortgage either. I earlier mentioned people who are receiving HAP but there is a cohort of tens of thousands of people beyond the walls of this building who are in private rented accommodation and working but have not a hope in hell of getting a mortgage.
I accept and acknowledge that the new local authority loan is better than that under Rebuilding Ireland. There have been a number of improvements and I acknowledge that. However, the people I am talking about do not have a hope of being able to get that because their income is not at a point to entitle them to it. There is no point in them going to a bank or building society or any kind of a private lending institution. They have no hope. I know people who are paying half their income on rent. Half of the €390 they earn is going on rent. Some of them are in the HAP scheme but some of them are not. Some are earning €410 or €420 and are paying more than half their income on rent. I regularly come across that situation, as I am sure others do as well. We must do something.
This review has long been promised. When are those income thresholds going to be increased? When will we increase the income levels people must be below before they are entitled to go onto a local authority housing waiting list? It seems to have been going on forever and a day.
I will ask briefly about public private partnerships, PPPs. I have a lot of questions about PPPs that we will not have time to get into. Our guests are handed a policy, as I said earlier, to try to deal with this. Take, for example, the PPP for O'Devaney Gardens. Am I correct in saying that the cost to the State to purchase each of those units is €403,000?
Sorry, but I want to use my time to find out about costs. I am interested in the cost per unit. We we all want more units and we are all on the same page in that regard. What I am saying here is that it seems the cost is in the region of €400,000. In fact, €403,000 is the figure I have but I am open to correction on that.
Will Mr. Doyle come back to us with the exact costs, with details on the types of housing and the cost for each type? Some of them are one and two bedroom apartments. I am also interested in the Oscar Traynor Road site. Again, housing is needed but the problem is that on State-owned land, we are talking about €380,000 per unit.
In terms of the cost to the State for units that are essentially on "free" land, that is, land that is owned by the State or the local authority, what is an acceptable figure from the Department's point of view for a three bedroom house, for example? What is the benchmark figure?
Ms Áine Stapleton:
The Department regularly reviews its unit costs ceilings in light of what it sees coming through in terms of real tender prices. We will be assessing that for different types and sizes of houses and apartments and also different locations over the coming months, based on the tender price information that we are seeing coming through. When we have that process completed we would be happy to share that data with the committee.
At this point, the figures are there because the deal is done and that is fair enough. There is a mixture of one, two and three bedroom units, some of which are apartments and some of which are houses. What I am trying to ascertain here is the cost to the State, via Dublin City Council or other local authorities, of each unit. What is the cost to the State of a one bedroom apartment? What is the cost to the State of a two bedroom apartment and a three bedroom apartment? I want the same information for the houses in each of those developments. I am also interested in the affordable homes. I want to know the sale price of the affordable homes and the breakdown of same because there is a big difference between a one or two bedroom apartment and a three or four bedroom house.
Okay. I thank the witnesses from the Department for the work they are involved in and for their preparation for this meeting. It is a big Department with a considerable amount of work to do and we wish everyone well with that work. The witnesses heard a lot of concerns and suggestions from committee members this morning. I also thank the Comptroller and Auditor General and his staff for assisting this committee.
Is it agreed that the clerk will seek any follow-up information and carry out any actions agreed at the meeting? Agreed
Is it also agreed that we note and publish the opening statements and briefings provided for today's meeting? Agreed.
We will have a break now. We will resume in private session at 1.30 p.m. to deal with some housekeeping matters.