Oireachtas Joint and Select Committees
Thursday, 26 January 2023
Public Accounts Committee
Appropriation Accounts 2021
Vote 34 - Housing, Local Government and Heritage
Local Government Fund Account 2021
2021 Report of the Comptroller and Auditor General
Chapter 4: Re-allocation of Voted Funds
Chapter 6: Central Government Funding of Local Authorities
Chapter 7: The Housing Agency’s Revolving Acquisition Fund
9:30 am
Brian Stanley (Laois-Offaly, Sinn Fein)
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I welcome everyone to this morning's meeting. We have received apologies from Deputy Colm Burke.
Members and witnesses attending from within the committee room are asked to exercise personal responsibility to protect themselves and others from the risk of contracting Covid-19. Members of the committee attending remotely must continue to do so from within the precincts of the Parliament 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 parliament has chosen to sit. The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness to the committee. He is accompanied by Ms Paula O'Connor, deputy director of audit at the Office of the Comptroller and Auditor General.
This morning we will engage with officials from the Department of Housing, Local Government and Heritage to examine the following: the 2021 appropriation accounts 2021 for Vote 34, Housing, Local Government, and Heritage; the Local Government Fund account 2021; and from the Report on the Accounts of the Public Services 2021, Chapter 4 - re-allocation of voted funds, Chapter 6 - central government funding of local authorities, and Chapter 7 - the Housing Agency’s revolving acquisition fund.
We are joined from the Department of Housing, Local Government and Heritage by Mr. Graham Doyle, Secretary General; Ms Caroline Timmons, assistant secretary, housing affordability, inclusion and homelessness; Mr. David Kelly, principal officer; Mr. Feargal Ó Coigligh, assistant secretary, housing policy, legislation and governance, who was here last week and is again welcome; Mr. Paul Hogan, principal adviser, planning; and Ms Sinead O'Gorman, principal officer. We are also joined by Ms Clare Costello, principal officer, from the relevant Vote section at the Department of Public Expenditure and Reform. They are all very welcome. I remind all those in attendance to ensure their mobile telephones are switched off or on silent.
Before we start, I wish to explain some limitations to parliamentary privilege, and the practice of the Houses as regards reference you may make to other persons in your evidence. As witnesses are within the precincts of Leinster House, they are protected by absolute privilege in respect of presentations they make to the committee. This means that they have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Cathaoirleach to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.
Members are reminded of the provisions within Standing Order 218 that the committee shall refrain from enquiring 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.
I now call the Comptroller and Auditor General, Mr. Seamus McCarthy, for his opening statement.
Mr. Seamus McCarthy:
The 2021 appropriation account for Vote 34, Housing, Local Government and Heritage, records gross expenditure of €5.143 billion. The appropriation account is presented under six programme headings. The largest by value are the housing programme, water services programme and the programme to support local government, which together account for 95% of the gross expenditure under the Vote.
The surplus of the amount provided over the net amount applied in the year was €392 million. Of this, €276 million related to unspent 2021 capital allocations was carried forward to 2022. Just under €117 million was liable for surrender back to the Exchequer.
I issued a clear audit opinion in respect of the appropriation account. However, I drew attention 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, ECJ, in November 2019. The case concerned Ireland’s 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 by the court comprises a €5 million lump sum payment paid in 2020 plus a daily fine of €15,000 while the infringement continues, plus legal costs. By end 2021, the Department had paid fines totalling €13.2 million and a further liability of €3.5 million had accrued. The daily fine continued to be incurred into 2022. The Accounting Officer will be able to provide an update in that regard.
The Local Government Fund is managed by the Department and accounted for separately from the Vote. The fund comprises mainly Exchequer funding from Vote 34 and the proceeds of local property tax. In 2021, local property tax receipts into the fund amounted to €550 million. This was up marginally from the level of receipts in 2020. The transfer to the fund from the Vote in 2021 amounted to €699 million. This was down €357 million, or 34% year on year, due to a decline in the cost of the Covid-related commercial rates waiver. The fund expenditure in 2021 amounted to €1.23 billion. At end December 2021, the fund’s reserves stood at just over €159 million. Again, I issued a clear audit opinion in respect of the fund account.
Because of the complex ways that central government funds flow to individual local authorities, my office compiles a report each year to present an overview of the level and purposes of the funding provided. In 2021, funding to local authorities from central government sources amounted to a total of €5.77 billion; a decrease of approximately 5% on the €6.08 billion provided in 2020. More than 90% of the central government funding for local authorities came from three sources, namely, Vote 34 - the Local Government Fund and Vote 31 - Transport. Of the total of €5.77 billion central government funding, €2.8 billion was provided to local authorities for housing and regeneration. A further €1.3 billion was provided to local authorities for transport investment.
The committee previously considered the issue of reallocation of voted funds that was not in compliance with the procedures set out in public financial procedures, as outlined in chapter 4. One of the cases referred to in the chapter relates to Vote 34.
In summary, the Department of Housing, Local Government and Heritage reallocated €446 million of 2021 voted funds from subheads where there was underspending to facilitate additional spending in other subheads.
Public financial procedures state that the prior approval of the Department of Public Expenditure and Reform should always be obtained when a reallocation of voted funds is proposed. The Department of Housing, Local Government and Heritage did not have the required prior approval from the Department of Public Expenditure and Reform for €314 million of the transfers during 2021. Subsequently, in July 2022, the Department of Public Expenditure and Reform provided formal sanction for the transfers.
Included in the total reallocated was €310 million to increase the level of Vote funding for the Local Government Fund. This represented an increase of 79% over the Estimate provision amount approved by Dáil Éireann. The Department of Public Expenditure and Reform guidelines indicate that the better approach to transferring the funding would have been to use the Supplementary Estimate process.
Members will recall from last week that I introduced chapter 7, the Housing Agency's revolving acquisitions fund. The money in the fund originated from Vote 34. In brief, our examination found that, even by the revised target date of the end of 2021, there was a significant shortfall in the delivery of residential units through the fund. The examination also found that at the end of 2021, the cash balance of the acquisitions fund was €37.7 million, representing around half of the total fund value. This is indicative of under-utilisation of the fund's resources.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Mr. McCarthy. I call on Mr. Doyle to make his opening statement. It was indicated in the letter of invitation that it is limited to five minutes. We know who is present with him. We want a short summary.
Mr. Graham Doyle:
Of course, Chairman. I am pleased to be here to discuss the various areas that you have outlined. You have already introduced my colleagues. We look forward to discussing the expenditure and activity of the Department in 2021 with the committee. I will not go through every area of expenditure across our very broad remit, but I will touch on some key areas briefly.
I have provided some advance briefing for the meeting, including briefing on the value-for-money Standing Order 218, along with a copy of my opening statement. I will start by welcoming the work of the Comptroller and Auditor General and the engagement of his team with the Department over the course of the audit. On the basis of recommendations, we will continue to evolve and mature our systems and reporting in line with best practice.
The Department's gross expenditure in 2021, as set out in the Appropriation Account, totalled more than €5.1 billion. This was 2% below the outturn for 2020, due mainly to more targeted Covid-19 support payments to the local government sector in 2021 versus a higher amount in 2020. The year 2020 was a very challenging one for Ireland, and while at the outset of 2021 we were initially optimistic for a return to pre-pandemic activity and expenditure, 2021 in fact was an even more challenging year on many fronts. As we contended with the continued reality of Covid-19, the pace of delivery anticipated at the outset was simply not possible. Construction closures, social distancing measures, workforce impacts and supply chain issues had a significant impact on delivery and consequently on expenditure. However, that did not mean that areas of work stopped. The Department continued to work in delivering emergency legislation, ensuring that vulnerable households were protected, delivering cross-government supports and in preparing the new Housing for All strategy, which was published in September 2021.
Housing for All was launched by the Government in September 2021. It has the objective that every citizen in the State should have access to good quality homes, to purchase or rent at an affordable price and built to a high standard and in the right place and offering good quality of life. This is a whole-of-government plan involving leadership and close collaboration across many Departments.
In support of Housing for All, the Department's gross voted expenditure on housing programmes was approximately €2.8 billion in 2021, with additional funding available through the local property tax. Social housing represents a large proportion of expenditure under the housing programme, both for existing social homes and adding new social housing stock. New social housing is achieved under the main headings of build, acquisition and leasing. Rental supports under the housing assistance payment, HAP, and the rental accommodation scheme, RAS, are also provided. A broad range of services are provided including services for homeless households, supports for older people and people with a disability, Traveller accommodation, energy efficiency retrofits, pyrite and defective concrete block remediation.
In terms of affordable housing, the Affordable Housing Act 2021 established the basis for new affordable purchase and cost-rental schemes, which commenced in 2022. Despite the very challenging impact of Covid-19 on construction activity, the second half of 2021 saw some rebound with local authorities, approved housing bodies and other delivery partners seeking to make up lost ground. A total of 9,169 new social homes were provided in 2021, and almost 5,196 of these were new-build homes delivered through local authorities and approved housing bodies. Some 1,262 were targeted acquisitions by local authorities and approved housing bodies and 2,711 homes under leasing programmes.
The challenges of 2021 have given way to further challenges in the construction sector with very high levels of inflation, supply chain issues and in particular, higher interest rates across 2022. However, the Department remains focused on seeking to bring about new supply of social and affordable homes under the ambition set in Housing for All.
Water services continue to undergo a significant period of reform in the approach to the delivery of water services and the promotion of wider environmental protection. Irish Water is now a stand-alone company in public ownership as a regulated utility. The Government's voted Exchequer investment in Uisce Éireann as it is now known, is substantial, and has been growing steadily in recent years, supported now with the revised NDP to bring certainty of investment in the years ahead. Almost €1.3 billion was spent by Uisce Éireann in 2021 to service existing schemes and deliver new water infrastructure and investment. This investment is vital to: maintain and enhance water services; safeguard public health; and ensure compliance by treating wastewater.
While Uisce Éireann was focused on its capital programme in 2021 and again in 2022, there are significant infrastructure deficits to be addressed. The Government has committed to a high level of investment under the national development plan, NDP.
In terms of the rural water programme, in 2021 some €48 million was provided across both capital and current funding structures. Certainty for priority investment has been put in place through a multi-annual capital programme, aimed at improving the reliability and efficiency of rural water services infrastructure.
On local government, as chapter 6 shows, transfers of funding from central government sources to local authorities totalled some €5.8 billion in 2021. While funding is significantly up since 2016; this was a decrease of 5% from the 2020 level. Again, that was mainly due to changes in the level of Government supports.
As the Comptroller and Auditor General indicated, a number of Departments, including our own, and the Department of Transport, provide this funding to local authorities. The Local Government Fund, LGF, is a special Central Fund, which was established under the Local Government Act 1998. The profile of income and expenditure of the Local Government Fund has undergone significant changes in recent years. Income for the fund comes from the Exchequer and local property tax.
I have outlined some of the main payments so I will skip that in the interests of time. Further areas of expenditure in the 2021 Appropriation Account include: in the planning area, provision for the costs of An Bord Pleanála, the Land Development Agency, LDA, and the Office of the Planning Regulator, amounting collectively to €37 million, as well as provision for the urban regeneration and development fund, URDF, foreshore and marine spatial planning; Met Éireann costs; and heritage expenditure across a wide range of activities.
In conclusion, 2021 and 2022 brought challenges to which the Department and our partners have had to respond. We are very much looking forward to adapting to these challenges, and to strive to achieve ambitious targets in place across our very broad remit this year and into the future. I note the ongoing co-operation by all stakeholders involved in the delivery of a work programme of the scale undertaken by the Department. The Department, its agencies and our partners for delivery, including the non-governmental organisations, NGO, and approved housing bodies, AHB, sectors, continue to focus on achieving the best for citizens. I look forward to engaging with the committee this morning and to providing as much information as possible. We are very happy to come back to the committee to provide anything further that is required.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Mr. Doyle.
Alan Dillon (Mayo, Fine Gael)
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I welcome all the witnesses joining us today. It is very much appreciated. I will start by focusing first on previous recommendations made to the Department of Housing, Local Government and Heritage by this committee and the Comptroller and Auditor General. Our previous engagement was in June 2022. I will start with the proposition the committee made on improving value for money in expenditure year-on-year on social housing schemes - HAP, RAS, the social housing current expenditure programme, SHCEP, with the focus being on increasing capital expenditure on housing stock.
I ask Mr. Doyle to provide an update on those recommendations. What has the Department done in response?
Mr. Graham Doyle:
This committee has repeatedly highlighted the level of spend on programmes such as the housing assistance payment, HAP, and the rental accommodation scheme, RAS. The focus in Housing for All is to provide new social homes through our capital programmes, in particular, to reduce the reliance on those schemes over time. Those schemes have been necessary due to the time needed to ramp up those capital spending programmes, particularly on social housing. That is the main activity we are focused on and Housing for All is focused on that. We brought about a number of ways to keep the pressure on ourselves and our delivery partners to keep delivering new-build social housing in particular to reduce reliance on those schemes over time.
Alan Dillon (Mayo, Fine Gael)
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On the recommendation that was made to the Department, has it furnished a response to the recommendation that was accepted? What actions have been undertaken? Let us take HAP and RAS, for instance. How many households are under HAP and how many RAS properties are currently occupied?
Alan Dillon (Mayo, Fine Gael)
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What is the current expenditure associated with HAP for the 59,000 tenancies?
Alan Dillon (Mayo, Fine Gael)
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How much was it for RAS?
Alan Dillon (Mayo, Fine Gael)
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I refer to the governance and oversight associated with the €500 million spend on HAP tenancies. The Comptroller and Auditor General issued recommendations back in 2020 under his examination of the oversight of HAP. What has the Department implemented in terms of reform of the HAP system?
Mr. Graham Doyle:
There has been a positive response to all of the Comptroller and Auditor General's recommendations. The chief response in that regard has been the establishment of a HAP oversight committee within the Department, which met five times last year and once at the end of the previous year. It examines all aspects of HAP, including value for money, the detailed operation of the scheme, and the processes and procedures under it. There has been some increased desktop checking and oversight of the scheme. We are moving to some on-site checking as well this year so there has been significant focus on it, which the Comptroller and Auditor General's recommendation has helped bring to bear.
Alan Dillon (Mayo, Fine Gael)
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The concern is that the HAP scheme was introduced back in 2014 to replace the RAS system. However, the level of expenditure for RAS remains relatively current. What measures is the Department taking to move people off HAP and into RAS properties?
Mr. Graham Doyle:
That is often said and it is described in a number of places. RAS was to take people away from rent supplement, paid through the Department of Social Protection. Those who had been on rent supplement for a long period of time moved into RAS properties. HAP is a separate scheme, which is about the support of the rent that tenants pay under that scheme. We have seen a gradual decline in RAS expenditure and we are seeing a slow decline in HAP expenditure as well.
Alan Dillon (Mayo, Fine Gael)
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Take RAS for instance. How many people exited RAS in 2021?
Alan Dillon (Mayo, Fine Gael)
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How many of them entered social housing properties?
Alan Dillon (Mayo, Fine Gael)
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Does the Department have targets, milestones or key performance indicators associated with HAP and RAS? How does the Department monitor them?
Alan Dillon (Mayo, Fine Gael)
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Can Mr. Doyle give us some indication of the monitoring systems that are in place?
Alan Dillon (Mayo, Fine Gael)
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Does the Department have any concerns on the value for money around HAP?
Alan Dillon (Mayo, Fine Gael)
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Let us move on to the social housing targets contained within Housing for All. Can Mr. Doyle provide an update on the targets for 2022 and on what has been achieved for social housing?
Alan Dillon (Mayo, Fine Gael)
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Can Mr. Doyle not give us an actual figure?
Alan Dillon (Mayo, Fine Gael)
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For new-builds, acquisitions-----
Mr. Graham Doyle:
I cannot give the Deputy an accurate number but I can give him an estimate and I will tell him why. The completion of a lot of these projects has taken place in the last quarter of 2022. We tried to bring about a situation where that could be spread a little bit over the course of the year. Due to the issues that happened in 2022 with inflation, retendering of projects and supply chains, the profile of expenditure got worse in 2022 in terms of a huge amount of it being back-ended to the end of the year and a lot of delivery being in December. For example-----
Alan Dillon (Mayo, Fine Gael)
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If there are active projects, should the Department not have a clear understanding of what is under its remit within Housing for All?
Alan Dillon (Mayo, Fine Gael)
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So what is the current target?
Alan Dillon (Mayo, Fine Gael)
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When was that revised?
Mr. Graham Doyle:
As we saw the numbers over the course of the year, worked through them and just focused on what the output was likely to be. A lot of that delivery came through at the very end of the year and we were trying to see how much could be delivered before the end date and how much of it may end up going into-----
Alan Dillon (Mayo, Fine Gael)
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The figure is 8,000.
Alan Dillon (Mayo, Fine Gael)
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Is it the actual figure?
Alan Dillon (Mayo, Fine Gael)
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It is a simple question.
Alan Dillon (Mayo, Fine Gael)
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Does Mr. Doyle have a breakdown of what that figure of 8,000 comprises? Is it new builds?
Alan Dillon (Mayo, Fine Gael)
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I ask Mr. Doyle to provide information in respect of acquisitions under other schemes.
Alan Dillon (Mayo, Fine Gael)
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It was reduced to 200 for-----
Mr. Graham Doyle:
For acquisitions, yes. That was mainly to target certain types of housing, either for large families or for specialised housing in some cases. That was to put a significant amount of focus on the build programme. With the challenges last year, particularly in respect of homelessness, and the decision to put a pause on evictions, it was decided to encourage local authorities to purchase properties where there was a risk of a person becoming homeless as a landlord was exiting the market. Sorry, the answer is that number will be significantly higher than 200, ranging from 500 to 700, because a lot of that activity was in December and there is a great deal of conveyancing going on.
Alan Dillon (Mayo, Fine Gael)
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I turn to public private partnerships, PPPs. The figures in the accounts provide for a cost per unit under the two PPP bundles. It estimates a cost of approximately €633,000 per unit. I ask Mr. Doyle to provide a breakdown of the cost per unit, including the business and maintenance costs, that has been recorded in the accounts.
Mr. Graham Doyle:
That is sort of a whole-of-life unitary cost. It is worked through by the National Development Finance Agency, NDFA, when it brings forward these schemes. I do not have a breakdown. It is a life cycle cost over the lifetime of the unit. It includes construction, maintenance, operating costs, tenancy management, financing costs and so on. We are happy to get that breakdown and provide it to the Deputy.
Alan Dillon (Mayo, Fine Gael)
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What happens to the unit after the 25 years have expired? Who retains ownership of it?
Alan Dillon (Mayo, Fine Gael)
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I ask Mr. Doyle to provide information in respect of the geographical locations of the third bundle due to be entered into.
Alan Dillon (Mayo, Fine Gael)
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In what locations?
Alan Dillon (Mayo, Fine Gael)
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Does the Department have plans to enter more PPPs?
Alan Dillon (Mayo, Fine Gael)
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What is the Department's total expenditure for PPPs going forward?
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I welcome the witnesses. To refer back to the opening statement of the Comptroller and Auditor General, he issued a clear audit opinion for the 2021 accounts but drew attention to:
... a note in the account that discloses payment of a fine to the European Commission arising from a judgement [relating to Derrybrien in Galway] of the European Court of Justice in November 2019. The case concerned Ireland’s failure to ensure that a retrospective environmental impact assessment was carried out in respect of a wind farm constructed in County Galway.
The Comptroller and Auditor General stated that a lump sum of €5 million was paid in 2020, plus a daily fine of €15,000 and legal costs. At the outset, €15,000 per day is a phenomenal amount of money to be paying. I note the 2022 figures are not included here but I am sure the witnesses have them to hand. To date, how much has been spent on this fine? I ask the witnesses to leave out legal costs for now. We will take that as included. I suspect it is approximately €22 million, or in excess thereof. I ask the witnesses to clarify the position in that regard.
Mr. Graham Doyle:
To date, just under €16 million has been paid out. It is €15.98 million. Across the years, between the lump sum, it was €2.7 million in 2020, it was approximately €5.5 million in 2021 and last year it was just under €2.8 million. The judgment essentially required the owner and operator of the wind farm, which is the ESB in this instance, to submit an application for a retrospective environmental impact assessment, EIA, known as a substitute consent, to An Bord Pleanála. It submitted that application. An Bord Pleanála eventually found against it and at that point it ceased operation of the wind farm. Our colleagues at the Department of the Environment, Climate and Communications have engaged with the Commission on this issue, seeking to close the fines that have been paid through our Department. Our understanding is that we are due to receive a decision on that. We are hopeful for a positive decision in terms of it being closed at that point. We expect to receive a decision, which is a matter for the Commission, within a matter of days.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I will come back to the decision and the closing off of this terrible saga and the costs incurred by the State. What is the figure for the legal costs from 2019 to date?
Mr. Graham Doyle:
I see a reference to legal costs but I was not aware there were legal costs in it. I understood it to be just the fines but I have seen a reference to legal costs. I may need to check that, unless my colleague, Mr. Hogan, has further information. I did not understand there to be legal costs in it. The main element was-----
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I ask the Comptroller and Auditor General to clarify this. I quoted from his opening statement. There is a reference to legal costs. He might be able to shed------
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I ask that a note be sent to the committee on that matter.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I suggest that the officials might provide that by the end of the meeting.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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Yes, please.
Brian Stanley (Laois-Offaly, Sinn Fein)
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If the figure is not to hand, I ask that it be provided by the end of the meeting.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I thank the Chairman. In terms of the conclusion to this, is there-----
Mr. Feargal ? Coigligh:
On a general point on these European cases, they are between member states and the Commission. It is a general finding that legal costs will be incurred and it usually relates to the state's cost in meeting the case against the Commission, which would not be hugely significant in terms of the overall figure. We can get clarification.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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It would be good to get a global figure for how much this is costing the State. That would be helpful. I thank the witnesses.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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That is a lump sum.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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In terms of the conclusion to it, Mr. Doyle referred to a retrospective environmental assessment. Does the Department have a timeframe for when this might be finished, including the daily fines and all the associated costs?
Mr. Graham Doyle:
The argument that has been made to the Commission is that the fines stop from the point at which the facility stopped operating or at which the finding was made. That would be the final €1.2 million payment at that point. That is the proposal, and that is the argument that has been made to the Commission. We will see what its decision is in the coming period.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I have just four minutes left so I ask Mr Doyle to be brief in his responses. With regard to Uisce Éireann and all the reforms that have taken place there, I am a little taken aback with regard to the separation of the entity itself. It is stated that this will take effect this year, but that is unlikely. The Committee of Public Accounts will obviously have a role in questioning Uisce Éireann on its operations, but that is not likely to happen until 2024. Why will it take so long? If the entity has been established and reformed, why is it taking so long for it to become accountable to this committee?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Can the Comptroller and Auditor General give us any information on that?
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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We will monitor the situation. I want to turn to the local property tax. There have obviously been changes to the bands in the last year or so. In terms of the amounts collected, has the Department seen a drop-off in the payments being made by householders in local property tax globally across the country or have more people availed of the monthly payment scheme?
Ms Sinead O'Gorman:
The collection of property tax is a matter for the Revenue Commissioners. The Department just deals with the allocation of the local property tax funds collected that are transferred into the Local Government Fund. The Revenue Commissioners publish quarterly statistics on their website with regard to collection and yield information.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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It is the Revenue Commissioners who ultimately obtain all of that information. That clarifies the position.
The staffing complement of the Department was 1,207 in 2020. This increased by 159, to 1,366, in 2021. What kind of grades and areas have the new staff been deployed in? Are they at administrative officer or principal officer, PO, level or above?
Mr. Graham Doyle:
It is probably in the middle grades more than anywhere else. There are a number of things happening. Obviously, the heritage function joining the Department brings in a lot of different people across the country. There are in excess of 600 staff across all of those functions, for example, in the National Parks and Wildlife Service and the rangers, and there are many different grades involved. There was that, and there was additional resourcing being applied into all areas of the Department in recent years.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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However, the 159 are brand-new staff.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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The Department might forward a note to the committee with a breakdown of that.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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Since I am on the topic of staffing, there was a story in the Sunday newspapers relating to the Secretary General. There was quite extensive coverage about an issue involving him being in negotiations in respect of his salary. Is there any way he can shed light on that issue here?
Mr. Graham Doyle:
Yes, I will. I appreciate that the story was on the front page of a Sunday newspaper. I also appreciate that those matters, which have been under discussion for a number of years, were the subject of that media coverage. HR issues are dealt with by Departments, and I am sure any issues relating my terms and conditions will be clarified in due course through engagement with those Departments. In terms of public sector salaries generally, including my own, they are very much a matter of public record. If there was any change to my terms and conditions, it would also be clear in the context of it being a matter of record. Beyond that, any HR discussion - and, as stated, there are some discussions that date back a number of years - are very much dealt with by the relevant Departments.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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There is no change at present from what is listed here in this documentation in terms of salary.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is there any question of legal action?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I did not see the Sunday newspaper article in question, but I thought there was some mention of a legal case or potential legal case.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. I call Deputy Carthy.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I read in this morning's edition of The Irish Timesthat the Housing Commission has indicated that Ireland needs somewhere between 42,000 and 62,000 new homes each year, which is wildly out of kilter with the targets set out by the Government and the Department. What are the actual targets?
Mr. Graham Doyle:
The commission has looked at the issue of targets. Its work in that regard is ongoing. There is some mention of that matter in the newspaper this morning. There is a lot of debate about what the targets should be, and we have based them on the work with the ESRI and the housing demand needs assessment. The figure of 33,000 that gets mentioned all of the time is an average. That increases over time. Depending on the assumptions one applies, one can end up with very different targets, so there has been a lot of discussion about those issues. We will need to look at the targets again with the detailed census report and the work that we get back from bodies such as the Housing Commission.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Does Mr. Doyle accept, as many of us would have been saying as far back as when these targets were set, that they will prove to be completely inadequate in terms of the housing need going forward?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The point I am making is that, for several years, members of this committee and others have been saying it is their belief that the housing targets have been understated in terms of what is actually required, and the Department has disputed that. Mr. Doyle is now saying that the Department is reviewing that. When will that review be completed?
Mr. Paul Hogan:
We have work under way to review the national planning framework and, in doing that, to look at the targets. The targets are monitored on a regular basis and we get quarterly statistics from the CSO, so the projection that was set out by the ESRI, on which the housing targets were based, was largely accurate up to March of this year. We have obviously experienced a significant shock-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Does Mr. Hogan mean March of last year?
Mr. Paul Hogan:
My apologies, it was March of last year. We have obviously experienced a very significant migration shock in terms of population since then. Having said that, the under-provision means that the average does get added to as time goes on, so there is a higher figure when we look at an average for the years ahead, and that is needed.
Obviously, it has pushed up beyond the 33,000 as a result of that.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Just to clarify, Mr. Hogan is essentially saying that the war in Ukraine required the re-evaluation of our housing targets.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That is what happened in March of last year.
Mr. Paul Hogan:
No set of housing targets could have accounted for that level of shock. That is the first thing. The second thing I am saying is that in the vast majority of local authority areas there is a huge gap to be made up in terms of meeting the target. There is no question of the target being inadequate. The pressure arises in the counties around Dublin and on the eastern seaboard. That is an issue for regional development in Ireland. That regional balance aspect also needs to be factored into the review of any targets.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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All I have is the report in The Irish Times, which indicates that with population growth at the upper end of official projections the figure quoted even excludes recent arrivals from Ukraine. Does Mr. Hogan accept that prior to March, in fact for some years, our targets have been below what is actually required?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I was asking about the holistic figures.
I see that the new Minister for Public Expenditure and Reform received a briefing from his officials which showed the capital underspend in the Department of Housing, Local Government and Heritage at €1 billion. Does Mr. Doyle dispute that figure of €1 billion for 2022?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Where did the Department of Public Expenditure and Reform figure of €1 billion come from?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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If we are to accept that figure of €340 million, it is still a significant amount.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It is a carryover, but it is also an underspend. It is money that was allocated for last year but was not spent. How can Mr. Doyle possibly justify that situation?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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We missed our targets by 28% in social housing output. Would that be the correct figure?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Of the 9,000 is it correct that 6,500 were completed?
Mr. Graham Doyle:
I know that has been the figure that has been put out based on an estimate in a Department of Public Expenditure and Reform briefing to its Minister that the Deputy has referred to. I responded to Deputy Dillon earlier to say that based on what we see - we are still doing the counting and verification - we see something closer to 8,000, somewhere in the 7,500 to 8,000 range.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Is that for completions in 2022?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Regarding-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The figure I have for affordable housing is 900 does Mr. Doyle dispute that figure?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The numbers for affordable housing are so low that someone could nearly go around the country and count them if they were so minded. Surely Mr. Doyle has a ballpark figure. Is the 900 which has been mentioned in an official document that has been presented to the Minister for Public Expenditure and Reform way off kilter or is it in that ballpark?
Mr. Graham Doyle:
There are so many different schemes and we have so many different delivery mechanisms across the affordable piece that I find it hard to come up with a particular composite figure. What has happened on the affordable side is that we have worked very hard to bring about a number of new schemes delivered from a number of different delivery partners around-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I was asking for a number. I take it Mr. Doyle cannot give me one.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I return to our earlier conversation in respect of what housing targets should be. Will there be 29,000 completions this year? That is what the target for 2023 is. Will that be met?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It is nowhere close to what it should be. Will the target for 2023 be met?
Mr. Graham Doyle:
There are a number of sources of information - the Deputy will have read them just as I have - including the Central Bank and others. There are challenges and headwinds in the sector. We are very hopeful that it will be met and I know that we are trying to make changes where we can to try to help overall delivery get to that number.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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However, we are in 2023 now. There is a target. Mr. Doyle is the Secretary General of the Department with responsibility for this area. The target is 29,000. Does he believe that target will be reached?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Last week representatives of the Housing Agency appeared before the committee. I asked them a number of questions on the Croí Cónaithe programme in cities. Bizarrely, they felt they were not in a position to tell us how many applications there had been for that scheme. They told us we should ask Department of Housing, Local Government and Heritage officials. I am taking the opportunity to see if Mr. Doyle can tell us how many applications have been received or are on hand for that scheme and where they are located.
Mr. Graham Doyle:
Certainly, I will give the Deputy that information now. Our colleagues last week were working on the basis that there was an awful lot of commercial and confidential work and we had not released figures previously. I think they were in a difficult positionvis-à-vis ourselves last week. I am very happy to give the Deputy the information now. At stage 1, there were 26 proposals by 16 different entities. That was just over 3,800 units. Seven of those were ineligible. At stage 2, that 26 was back to 19. One was withdrawn so the number of units under consideration at that stage was 2,442, to give an exact number. At stage 3, having assessed those proposals, there are 15 live proposals, three withdrawn. At that point, 2,102 units-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That means 12 applications.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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However, three were withdrawn. Is that including-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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So, it is 15 live proposals.
Mr. Graham Doyle:
It is 15 live proposals for 2,102 units under the process to fund under Croí Cónaithe. That is the first call under Croí Cónaithe. There will be another one this year and further ones. Croí Cónaithe was to seek to deliver 5,000 units over the next number of years. I apologise to the Deputy that he did not get that information last week, but that was why.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I thank Mr. Doyle for that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There will be a second round anyway and I will allow the Deputy to come back.
Verona Murphy (Wexford, Independent)
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I welcome all the officials back to the committee. How long has Mr. Doyle been in the Department as Secretary General?
Verona Murphy (Wexford, Independent)
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Today we are reading that unfortunately we have missed targets as announced by the Taoiseach yesterday. We have an underspend in the Department, if Mr. Doyle's figures are correct, of €451 million. It will be carrying it through to 2022, just €247 million. We also read today in the newspapers that 28%, more than a quarter, of the grants of permission will not be commenced. What is the problem?
Verona Murphy (Wexford, Independent)
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I ask Mr. Doyle to give me just one. What is his biggest problem in the Department?
Mr. Graham Doyle:
I suppose my biggest concern right now in terms of housing output and deliveries across the system is interest rates rising. I think that creates a lot of concern. There is risk aversion out there in the industry. Of all the challenges that get mentioned, I think that is probably the biggest challenge that is out there now. We have talked about inflation and we have talked about supply chains. Some of that is settling, albeit at a higher level.
Verona Murphy (Wexford, Independent)
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We will go to the issue of interest rates. We can come back to that. There is a very detailed report in The Journal today that said that the cost of building a two-bed, medium-rise suburban apartment is now €240,000. Would Mr. Doyle agree with that figure? That figure is ex-site costs and just the building. Would he agree with that figure?
Verona Murphy (Wexford, Independent)
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It is for a two-bed suburban apartment in the likes of County Wexford.
Verona Murphy (Wexford, Independent)
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What would Mr. Doyle think that it costs to build a two-bed house?
Verona Murphy (Wexford, Independent)
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We will say that this is pertinent to Wexford.
Verona Murphy (Wexford, Independent)
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What would Mr. Doyle say that would cost?
Verona Murphy (Wexford, Independent)
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How much less?
Verona Murphy (Wexford, Independent)
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Give us a ball-park figure.
Verona Murphy (Wexford, Independent)
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Mr. Doyle is the Secretary General. He must have a figure off the top of his head.
Verona Murphy (Wexford, Independent)
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Let me give it to Mr. Doyle. It is €140,000. That is €100,000 less. That is at the top end. It is €140,000 for a two-bed house versus €240,000 for a two-bed apartment. What is the issue there?
Verona Murphy (Wexford, Independent)
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Well, I have read it-----
Verona Murphy (Wexford, Independent)
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-----and I can assure Mr. Doyle that this is the figure.
Verona Murphy (Wexford, Independent)
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So what problem does that throw up to us? Some 28% of SHDs will never be built, according to the newspapers this morning.
Verona Murphy (Wexford, Independent)
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Viability. There you go.
Verona Murphy (Wexford, Independent)
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Viability is the serious issue. Would Mr. Doyle agree that our planning policy and everybody from the regulator does not consider viability when it comes to planning policy?
Verona Murphy (Wexford, Independent)
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Would Mr. Doyle agree with that statement? It has been repeated a number of times by people, such as the planning regulator, that viability is not a planning consideration.
Verona Murphy (Wexford, Independent)
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The question is whether Mr. Doyle agrees that viability is not in our planning policy and that it is not regarded at all.
Verona Murphy (Wexford, Independent)
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Mr. Doyle mentioned density. Our planning policy is for high density, which means that the typologies we get from our planning policy are for apartments or terraced housing. We do not get three-bed semis and we do not get two-bed housing with front and back gardens, which is what people want. Instead, we are spending the taxpayers' money on what they do not want. However, because the developer cannot build them viably, Mr. Doyle spends the taxpayers' money buying them.
Earlier, I heard Mr. Doyle say that some 9,000 units of social housing is being provided. More than 5,000 of them were apartments. Regarding that 5,000, the deferential in money to the taxpayer that would have provided two-bed houses is €1 billion and maybe more. We would have actually gotten more than 6,000 two-bed houses with front and back gardens that will not become ghettos in the future. Would the Secretary General call that value for money?
Verona Murphy (Wexford, Independent)
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That is a binary question. It is "Yes" or "No". Does Mr. Doyle call that value for money? It is a binary question.
Verona Murphy (Wexford, Independent)
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It is. It requires a "Yes" or "No" answer. Is it value for money to waste €1 billion of the taxpayers' money when we know that viability is the issue? We just cannot meet targets and we never will because the policy is not changing.
Verona Murphy (Wexford, Independent)
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Hold on a second. We do not have the transport infrastructure anywhere, except in Dublin, to cater for apartment building and living. Would Mr. Doyle agree with that?
Verona Murphy (Wexford, Independent)
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It is. It is therefore not appropriate that our planning policy would dictate the same high density for towns in Wexford and Waterford. Urban high densities do not suit the rest of country. Do they? Is that not why we are not meeting our targets? Is that not why our building and planning permissions are not commencing? They are just not viable. Mr. Doyle was telling Deputy Carthy there that he hopes to meet them next year. Can he tell me in one sentence what has changed this year? Last year, he could not meet his targets and he is saying that he is going to meet them next year. What has changed?
Verona Murphy (Wexford, Independent)
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I asked Mr. Doyle about what changed.
Verona Murphy (Wexford, Independent)
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There was a €451 million underspend. Why was that?
Verona Murphy (Wexford, Independent)
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I am talking about social. What are they buying? They are buying the apartments. Are they not? That is social or whatever. They are spending €240,000 per apartment, excluding site costs. It is an abomination if we include the site costs and ancillaries, because the apartment will then cost €460,000. Who else can buy it? Who else is buying these apartments?
Verona Murphy (Wexford, Independent)
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The Secretary General made the statement that viability is the issue. In his capacity as Secretary General, what advice has he given the Government to tackle the viability issue, which is the biggest issue we are seeing today, is it not?
Verona Murphy (Wexford, Independent)
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However, the viability issue around apartments is the viability issue that is contained in our entire planning policy at a local government level. Section 15 of the Act states that local government must ensure that the county development plan objectives are delivered. Does it not?
Verona Murphy (Wexford, Independent)
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Mr. Doyle agrees with that. Let me tell him that the planning policy, which is coming from national planning policy, is preventing them from doing that. Mr. Doyle is talking about targets. Clearly, he does not understand what the problem is, even though he has told me what the problem is. Seemingly, he has no clue about how to fix it.
Verona Murphy (Wexford, Independent)
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Tell me what they are, please.
Verona Murphy (Wexford, Independent)
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There are inflation rates of 9.4%. Mr. Doyle wants to reduce the cost of building when inflation rates are at that level.
Verona Murphy (Wexford, Independent)
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In regard to Croí Cónaithe, is Mr. Doyle for real?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will ask the Deputy to treat the witness with respect.
Verona Murphy (Wexford, Independent)
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I am treating him with respect. He is on a huge salary-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Just ask the question.
Verona Murphy (Wexford, Independent)
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-----and I have asked him what changes he has made. Does he know how many homeless-----
Verona Murphy (Wexford, Independent)
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I certainly would. I would imagine that those should be coming through as emergency guidelines.
Verona Murphy (Wexford, Independent)
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I would be interested, but I am out of time. I will come back in, but I would like a briefing note to the committee on a timeframe and what it is they are proposing.
Verona Murphy (Wexford, Independent)
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I will come back in.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The assumptions that have been made by the public and many lay people until recently is that apartments are actually cheaper. Those are the assumptions that are made by much of the public.
Verona Murphy (Wexford, Independent)
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That is a problem.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Figures have started coming out in recent months. The figures this morning are revealing in that-----
Verona Murphy (Wexford, Independent)
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It has always been more expensive.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes, it is far more expensive, but I think the public believes otherwise. I call Deputy Catherine Murphy.
Catherine Murphy (Kildare North, Social Democrats)
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I ask about the target for enhanced leasing that has been approved by the Department to date.
Catherine Murphy (Kildare North, Social Democrats)
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That is not the question I asked. How many have been approved to date?
Catherine Murphy (Kildare North, Social Democrats)
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How many are under the enhanced leasing scheme?
Catherine Murphy (Kildare North, Social Democrats)
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Does Mr. Doyle know how many?
Catherine Murphy (Kildare North, Social Democrats)
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I know that. It is why I am asking about the enhanced leasing scheme.
Catherine Murphy (Kildare North, Social Democrats)
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I need to see that.
Catherine Murphy (Kildare North, Social Democrats)
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They can be very different. It is the enhanced leasing figure I am looking for. I had a number last week that I was wrong about in respect of County Kildare. The number is 681 and I just wanted to correct that.
When I first raised the enhanced leasing scheme in the Dáil in 2021, the then Taoiseach, Mícheál Martin, told me that no local authority should be on both sides of this and it would be phased out. If anything, I am seeing it being scaled up rather than phased out in my own area. It is incredibly poor value for money. What investors say is that "a further benefit of the leasing option is the investment opportunities for international and domestic private investors". CBRE, which is one of the biggest real estate companies in the world, has recently reported that "investors are keen to acquire residential units and schemes let by local authorities on a long-term lease". Another group now sees social housing as a financial product under the long-term leasing scheme. It is incredibly bad value for money. New houses acquired have to be within a group of 30 or more. They are leased for in the region of 25 years, at up to 95% of the market rent with a four-yearly review. The average per annum figure, according to replies to parliamentary questions is €17,000 per unit, which works out at €425,000 over 25 years. It is then refurbished, returned to the investor and then the housing need has to be met all over again. Essentially, a mortgage is being paid without having an asset at the end of it. That is incredibly bad value for money. The committee is interested in value for money. We need a briefing note on the enhanced leasing scheme.
Catherine Murphy (Kildare North, Social Democrats)
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There are actually 681 in Kildare, so Mr. Doyle's figures are wrong.
Catherine Murphy (Kildare North, Social Democrats)
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No, they are not. In fact, there were 350 in the past two months in Kildare. I can give Mr. Doyle the names of the estates.
Catherine Murphy (Kildare North, Social Democrats)
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I want accurate information on this. We are finding it impossible to get an overview. I am not going to sit down and ring 30 local authorities and ask them individually. The Department needs to be able to give us those figures.
On new builds, I have raised the importance of language with departmental officials on several occasions when they have been before the committee. Language is important. New build and direct build are two different things. What is happening with the new builds coming in is that they are being bought on a turnkey basis. They are not designed by the local authority. They go through the process as a normal housing planning application. They are approved, built and then the local authority may buy the whole estate or part of it. They are included in the new build numbers. How many were directly built by local authorities or AHBs last year and the year before?
Mr. Graham Doyle:
My colleague will give the Deputy some delivery figures. Many of the turnkeys that we are approving at this point in time would not otherwise be delivered unless they were through the social housing programme. It allows us to deliver housing into the social housing programme housing that would not otherwise delivered.
Catherine Murphy (Kildare North, Social Democrats)
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We need transparent and accurate information. I do not believe we are getting that. It is couched in a whole lot of language that gives the impression it is direct build by the local authorities when, in fact, it is not
Catherine Murphy (Kildare North, Social Democrats)
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I want to move on to another issue, which was raised last week relating to approved housing bodies. We were told that the situation is being looked at. There are three tiers to AHBs. Bigger ones tend to be professionally managed while the smaller ones are often managed by volunteers. Typically, the local authority provides the land, the State provides the capital to build and a maintenance amount is allocated to the AHBs of the mortgage. Once the mortgage is redeemed, the ownership reverts to the AHB, so they are in private ownership. AHBs are managed under the Charities Regulator, but they could change from being a charity, or a company limited by guarantee. The Department had stated it was looking at a particular situation, and established an unencumbered units working group. That relates to the approved housing bodies that no longer have a mortgage. Where is that at? What are the terms of reference? How many units are involved in that particular working group?
Catherine Murphy (Kildare North, Social Democrats)
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I just asked about the terms of reference for that working group and what the number is. I have very little time.
Catherine Murphy (Kildare North, Social Democrats)
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Can he come back to us and provide the full terms of reference to the committee?
Catherine Murphy (Kildare North, Social Democrats)
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There is a real concern here. Another issue raised at last week's meeting, and not for the first time, is that when a local authority builds a house the money is provided by the Department. They build the house. There is differential rent. People pay rent and if the person moves out, somebody else tenants that house. It is up to the local authority to maintain it. With an approved housing body, they get the money from the Department and build the housing. However, we are hearing that some of the AHBs that no longer have a mortgage will allocate the scheme. They will be given a list from the local authority in some cases while, in others, they bypass the local authority, but the local authority will then do a rental accommodation scheme, RAS, with them for the tenancies. The State has built the houses and then it will subsidise the rent even though there is not a mortgage. Where is the value for money in that? Who designed that? Who is the beneficial owner of these houses built by the AHBs after the mortgage?
Mr. Graham Doyle:
Once the AHBs has paid back the loans given by the State, they are then the beneficial owner of the property. They will then use them under their articles of association and under the charities regulation for social housing purposes. In cases where a maintenance payment is paid, it is often to some of those schemes that were for very vulnerable people in the past. The payment is quite low. It is around the maintenance of the property for social housing.
Catherine Murphy (Kildare North, Social Democrats)
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RAS is paid.
Catherine Murphy (Kildare North, Social Democrats)
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The Department needs to give us some information-----
Catherine Murphy (Kildare North, Social Democrats)
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-----on that. We need a detailed briefing on that.
Catherine Murphy (Kildare North, Social Democrats)
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How many units has RAS been paid for in AHBs?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank the Deputy. She will have a second round-----
Catherine Murphy (Kildare North, Social Democrats)
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I will need to come back in.
Brian Stanley (Laois-Offaly, Sinn Fein)
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-----or maybe a third.
Neasa Hourigan (Dublin Central, Green Party)
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I welcome everybody. I have a few different matters I want to get to today. I will draw the officials' attention back to the Comptroller and Auditor General's report and Vote 34 in the area of the reallocation of voted funds from 2021. As set out in that report, there was €314 million in 2021 that the Department of Public Expenditure and Reform did not approve for reallocation but the Department of Housing, Local Government and Heritage moved ahead anyway. It is outlined in the report that the normal way to transfer the funding is to use the Supplementary Estimate process. Why was that not used?
Neasa Hourigan (Dublin Central, Green Party)
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Why?
Neasa Hourigan (Dublin Central, Green Party)
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Why was the Supplementary Estimate process not used?
Neasa Hourigan (Dublin Central, Green Party)
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No, sorry. The decision was taken at Cabinet level.
Neasa Hourigan (Dublin Central, Green Party)
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Is Mr. Doyle saying he was instructed by Cabinet-----
Neasa Hourigan (Dublin Central, Green Party)
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-----to not use the Supplementary Estimates process? Did the Department propose to Cabinet that this was the way to proceed?
Neasa Hourigan (Dublin Central, Green Party)
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It sounds like the Department of Housing, Local Government and Heritage did not obtain permission from the Department of Public Expenditure and Reform in that way.
Neasa Hourigan (Dublin Central, Green Party)
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The Department was reallocating funds, however.
Neasa Hourigan (Dublin Central, Green Party)
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It is all from the same pot and Supplementary Estimates are put before people like ourselves. They go to committees.
Neasa Hourigan (Dublin Central, Green Party)
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The Department was reallocating funds-----
Neasa Hourigan (Dublin Central, Green Party)
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-----from one pot to another. It is all taxpayer funds.
Neasa Hourigan (Dublin Central, Green Party)
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Who made the decision to do it through that process and not through a process where there would be public oversight through a committee system?
Neasa Hourigan (Dublin Central, Green Party)
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There is somebody here from the Department of Public Expenditure and Reform. Would Ms Costello like to make a comment on that?
Ms Clare Costello:
Certainly, no problem at all. As the Deputy outlined, there are two ways to move funds from one pot to another, as she put it. It can either be done through virement or a technical Supplementary Estimate. We need to look at the instance referenced by the Deputy in the context of the substantial savings due to Covid-19. Mr. Doyle outlined that a lot of the capital savings had arisen because of the construction shutdown. In that instance, it was a judgment call between ourselves and the Department of Housing, Local Government and Heritage that the money could be moved via virement rather than a technical Supplementary Estimate.
Neasa Hourigan (Dublin Central, Green Party)
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How often does the Department do that?
Neasa Hourigan (Dublin Central, Green Party)
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Okay. Would it happen at a level of €314 million?
Neasa Hourigan (Dublin Central, Green Party)
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What is the next largest amount the Department has done that for?
Neasa Hourigan (Dublin Central, Green Party)
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Sorry, I do not mean to cut across Ms Costello but the time is ticking down. When is the last time that happened?
Neasa Hourigan (Dublin Central, Green Party)
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Let us say it was for an amount of more than €200 million, which I presume Ms Costello would remember because it is a lot of money.
Neasa Hourigan (Dublin Central, Green Party)
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When was the last time that amount was allocated without a Supplementary Estimate?
Neasa Hourigan (Dublin Central, Green Party)
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Okay.
Neasa Hourigan (Dublin Central, Green Party)
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Sorry, when Ms Costello said, "a memo to Government", did she mean a memo to Cabinet?
Neasa Hourigan (Dublin Central, Green Party)
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Okay. Is Ms Costello happy with that way of proceeding with €314 million? Was she happy with that process? Does she think that provides enough oversight of that reallocation?
Neasa Hourigan (Dublin Central, Green Party)
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Does the Department intend to repeat that process?
Neasa Hourigan (Dublin Central, Green Party)
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I will clarify what Ms Costello means regarding "a number of Supplementary Estimates". We know Supplementary Estimates come before committees all the time - I sit on many of them. I am asking whether the Department intends to continue with a process whereby it eschews the Supplementary Estimates process and goes to that virement process for substantial amounts.
Ms Clare Costello:
As I said, there was an incredible context that we need to acknowledge. There were significant savings due to the pandemic. The Government had made in-year decisions to allocate significant amounts of funding to support the local authority sector through the commercial rates waiver and to support businesses-----
Neasa Hourigan (Dublin Central, Green Party)
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I understand that but the Supplementary Estimates process is well established and provides public oversight.
Neasa Hourigan (Dublin Central, Green Party)
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This involves €314 million. I am asking officials from both Departments whether there is an intent to continue this way in respect of this level of funds. It seems - I will not use the word "evasion" - the Departments are eschewing public oversight.
Neasa Hourigan (Dublin Central, Green Party)
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Effectively, however, that is the outcome.
Neasa Hourigan (Dublin Central, Green Party)
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I will move on. I want to pick up a little on the AHBs issue. We had a long discussion last week of the process whereby we will not own the asset towards the end of the process in respect of AHBs. We also talked about the level of public oversight in AHBs' decision-making. Representatives from the Housing Agency described to us that there will be an AHB group in every local authority. Will the officials very quickly outline what that involves? This group will make decisions around what type of housing AHBs are required to provide.
Neasa Hourigan (Dublin Central, Green Party)
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Do the AHBs and the executive sit on that group?
Neasa Hourigan (Dublin Central, Green Party)
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Last week, it was described to us that the executive and the AHBs will sit on the group. Is anyone aware whether the members of the public or elected Members will sit on it?
Neasa Hourigan (Dublin Central, Green Party)
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What does Mr. Kelly mean by representatives? Are these elected representatives?
Neasa Hourigan (Dublin Central, Green Party)
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Does Mr. Kelly believe that provides sufficient oversight of decisions around AHBs?
Neasa Hourigan (Dublin Central, Green Party)
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Do any members of the public sit on those forums?
Neasa Hourigan (Dublin Central, Green Party)
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Do any members of the public participation networks sit on those forums?
Neasa Hourigan (Dublin Central, Green Party)
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That sounds like a very closed shop to me.
Neasa Hourigan (Dublin Central, Green Party)
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Where does the transparency lie?
Neasa Hourigan (Dublin Central, Green Party)
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That is a fait accompli. Where is the transparency in the process of decision-making?
Neasa Hourigan (Dublin Central, Green Party)
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I want to get in two questions before my minute runs out. Is it meaningful that we make those decisions around provision? I am particularly interested in the provision of homes for people who have different needs and abilities in respect of disability. Once the mortgage is paid off and there is no lien on the property, what is the mechanism whereby the State will ensure that the AHBs still operate and provide those homes to those particular groups? It does not seem there is any mechanism. I do not see that all that work we will have done on the forum will be meaningful or significant in decision-making in 25 years. That is the first question.
I have a second question.
We obviously have a CPO mechanism for derelict and dangerous sites. We have two mechanisms under legislation. There is a move to increase the number of CPOs so that we can utilise our vacant properties and this is to be commended. I am also aware that often local authorities decide it is not cost-effective to bring the CPO properties into social housing and they may in fact put them on the private market. What level of information does the Department have on this? Does it give guidelines to local authorities on what the possible turnaround is? Should local authorities be turning them around at all rather than putting them back in the social system?
Mr. Feargal ? Coigligh:
We said we would come back to the committee with the terms of reference of the departmental group which is looking at unencumbered houses. It is looking at some of the questions that committee members are asking. It is important to note these are charitable bodies and the assets cannot be disposed of. They cannot be privatised.
Neasa Hourigan (Dublin Central, Green Party)
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That was not my question.
Neasa Hourigan (Dublin Central, Green Party)
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I appreciate that but I believe we are up to six or seven briefing notes to be sent during this session. The clerk might correct me if I am wrong. It is very frustrating.
Neasa Hourigan (Dublin Central, Green Party)
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I asked a second question.
Ms Caroline Timmons:
We are very happy that we have set up a good programme of work on vacancy. We will publish a vacancy action plan next week. Much of the detail the Deputy might be looking for will be in this. We have signalled in Housing for All that we will have a CPO programme for local authorities. In some cases they will CPO for social housing. This is generally when a house is in a particular location that suits for social housing, there is particular demand for it and the service is appropriate. A lot of derelict houses are not in such locations and we also need to see what we can do with them. We are keen to bring them forward. There will be a CPO programme for these houses also and they will be for sale on the private market where appropriate. We are developing guidance with the Housing Agency and we hope to get it out-----
Neasa Hourigan (Dublin Central, Green Party)
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I know I am over time but I would like this point to be clarified. When this happens, will the funding received from the Central Fund, the Housing Finance Agency or wherever it comes from return to the housing sector or will it to go to local authority when it sells it on the private market?
Ms Caroline Timmons:
Bridging funding is available, as the Deputy said, from the Housing Finance Agency where needed. What will happen is that once local authorities sell the houses into the private market that money is taken and used for another CPO process. The idea is that the money revolves-----
Neasa Hourigan (Dublin Central, Green Party)
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Under what legislation?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The cash stays in house.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There is a housing strategic policy committee in every local authority. Would it not dawn on anyone to consider this in respect of the approved housing bodies forum? Is the job of that particular committee just to rubber-stamp what is put in front of it? We teased this out last week with the Housing Agency and we are doing so again this morning. I am a former local government representative, as are many committee members. I am taken aback at the amount of serious decision-making that completely bypasses the elected members. I remind the witnesses that the legal council is the elected members. I do not want to personalise this but we have the Department and the county managers who are the chief executives. My last county council meeting was 12 years ago this week. Since that time there has been an amount of bypassing the legal council of the elected members, never mind what I saw during my terms on the council. Here is another example of it. The elected members are the decision-makers on the housing strategic policy committee of the council. Forum after forum is set up with no consideration given to the views of members. Members are not included. However the people who face the music and face the public, as the Deputies here know, are the politicians. It is nearly worse for councillors because they are local. They are the people who answer the questions.
Brian Stanley (Laois-Offaly, Sinn Fein)
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This is happening.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Part 8 approvals comes before the legal council. I will say in a general way, and not just with regard to housing, we are dealing with local authorities and there are 31 of them in the State. I ask the Department to remember that the 31 chambers are the legal councils. The rest are employees employed by the elected members. It is the same with the chief executive officers. Their terms have to be renewed every seven years.
Catherine Murphy (Kildare North, Social Democrats)
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I do not want it to be only the Chair and Deputy Hourigan making this point. Language is important. The phrase "local authorities" has been used. Most of the public hear that in an entirely different way. They hear it as meaning the people they elected to represent them. This is not who we are talking about here. Really it underpins, if anything, that we do not have a local government system. We have a local system of administration where the power really resides. It really does underpin this when "local authorities" is said without differentiating that it is at official level and not at local authority level.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I know it is a policy issue-----
Catherine Murphy (Kildare North, Social Democrats)
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You need to qualify it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Councillors are getting it in the neck every day of the week for decisions that are made in which they had absolutely no hand, act or part and no control over.
Catherine Murphy (Kildare North, Social Democrats)
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They do not know it is going on sometimes.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Department of Transport, Transport Infrastructure Ireland, TII, and everybody else are shoving their money to local authorities, and that is good and it is all needed. It is not for this meeting but I can give example after example of local councillors being asked how something happened and whose idea it was when there was a greater need for the money to be spent elsewhere. The local authority members say they do not know and they have no control over it. They say the money came from a Department to the chief executive officer who decided where it would go. That is it. We are undermining the basis of democracy. The most important piece of democracy is local government. It is the closest to the people. We have pulled it asunder in this country. It is a bigger issue but I could not help intervening as Deputy Hourigan was raising these issues. It came to mind.
Brian Stanley (Laois-Offaly, Sinn Fein)
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A lot of this bypasses the budget because it is direct money. Councillors need to be in the frame. It is the same with housing, which is the biggest issue facing local authorities. Councillors need to be bought in to be part of it. I am a former chair of a strategic policy housing committee. People who elect local representatives expect them to have some hand, act or part in the decision-making. It is unfair and unworkable. We are destroying local democracy. That is all I want to say. We will take a break for ten minutes sharp and we will resume prior to 11.20 a.m.
Brian Stanley (Laois-Offaly, Sinn Fein)
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These are some questions I have regarding the underspend in 2022. Am I correct that there was a €1 billion underspend in housing in the past year?
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was when the new Minister for Finance was coming in.
Brian Stanley (Laois-Offaly, Sinn Fein)
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That was in December.
Mr. Graham Doyle:
It was in the brief but it could be it was based on figures up to the end of October; I am not sure. It was based on a run rate. If the underspend continued at that level, the point being made was that it could result in an underspend of €1 billion. In fact, most of the delivery happens in that last quarter. This year, that got skewed a little bit more into December.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Secretary General will appreciate that it is a huge projection in view of the fact that there is such a housing crisis.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mismatch.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What is the estimate at this point?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is it €800 million?
Brian Stanley (Laois-Offaly, Sinn Fein)
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In relation to delivery, the Secretary General has figures for the first nine months of 2022.
Brian Stanley (Laois-Offaly, Sinn Fein)
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On the figures I am looking at, the best I can make of it is that there were 6,500 to 7,000 social housing units built, with a shortfall of 27% or 28%.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There is a serious gap there. On affordable housing, what is happening? Why cannot we provide affordable housing? There are only 900. All going well, they might come in at 1,000 delivered. The projected figure was 4,100. We are 78% below on affordable housing.
Will the Secretary General clarify are we talking about affordable rents or affordable purchase, or both? Which are we talking about?
Brian Stanley (Laois-Offaly, Sinn Fein)
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What are we talking about? What is captured in that projection of 4,100? What different schemes are in that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Did the Secretary General say "the shared equity"?
Brian Stanley (Laois-Offaly, Sinn Fein)
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So as we are talking about the same thing here, are we talking about the top-up loan here that individuals get?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes, and one does not start paying back for six years.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is a top-up loan given to people to buy houses of up to 20% of the value of the house.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is equity, but after six years-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes. For six years, one does not have to worry about it. My point is, it is a top-up finance. It is putting more debt on the property. If the value of the house is €300,000 and it is a 20% top-up, that is an extra €60,000. The Secretary General is saying to me that that is captured in this figure of 4,100.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We need a better breakdown of this. This is revealing that the figure of loans for private houses where people are borrowing from private institutions is now being counted by the Department and by the Government in figures for affordable housing delivery.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that, but it should not be. What we are talking about here is new builds. That is our understanding, according to the briefing notes. We had the Housing Agency here last week. We follow this closely. I do not know whether other members are aware of it but this is the first time I heard it. That figure needs to be taken out of it.
In relation to delivery, because this is a real crunch issue, I have raised with the Secretary General previously the issue of generic designs. Nobody, whether politician, official, architect, local government official or anyone else, has ever explained this to me. There is no reason we cannot have generic designs for one, two, three and four-bedroom houses, single storey for disabled people and two-storey for family apartments. We used to do this. We know it works because one can see the evidence of it all over the country in decades gone by. As I have told the Secretary General previously, this is not about lowering the standards to those of 1940 or anything like that. It is about building generic houses to the 2023 standards - A-rated houses. Instead of that, every local authority is starting with a blank canvas. One is paying architects' fees. I checked again this week. Architects' fees of between 8% and 12% of the overall cost are going on it. People in the sector believe that it is madness. I believe that it is worse than that. It is slowing down delivery because one has to get approval from the Department, back and forth, for design.
I raised this and the Secretary General stated that he would look at this and come back to me. Why can we not have generic designs with which we can mass produce houses? I am not talking about low quality. I am not talking about what looks like the Soviet Union in 1940. I am not talking about any of that. I am talking about good-quality housing. I have given the Secretary General examples in the past of good quality housing that his Department approved - A-rated houses. Why can we not take that and replicate it across the country? Who is stopping it? Did the Secretary General raise this with the Minister, or who is stopping this?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Why cannot we do it?
Mr. Graham Doyle:
The significant step that we have made recently around this is to bring out the new design manual that sets out a range depending on the site, depending on what the need is in the particular local authority area and what kind of mix of units they are trying to bring about. It sets out clearly for the local authority what the layouts of that house can be that will comply with what we will fund.
Brian Stanley (Laois-Offaly, Sinn Fein)
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With respect, Mr. Doyle told me that previously. I understand that. and it is a step in the right direction.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that the Department would have certain specifications. That is different from what I am talking about. What I am talking about is simple and straightforward, that we have a generic design, for instance, for a two-bedroom terrace house, that is most appropriate that can be used in Donegal, Kerry, Offaly or Laois, and that we have single-storey two-bedroom units for people with disabilities that can be used across the country.
What I am asking the Secretary General is, why have we to go back to a blank canvas on every occasion? It is costing more. It is slowing down the process. Those are the two issues. We are discussing the cost of these projects and the speed at which we can get them delivered. We are in the middle of a crisis. I need not tell Mr. Doyle that. I am sure the officials are doing their best to deal with this. One of the big impediments are these issues and this is something that we can deal with. There is no reason a firm of architects will not design a generic model for us by looking at the best examples of what we have used to date, there are some brilliant examples, that can be replicated right across the State. A little like how, I understand, pop stars get a royalty every time their tune is played somewhere, every time 100 houses to the architects' design are being built in Donegal or wherever, they would get a limited, modest fee or royalty on it.
Surely there is some way of doing this. We did it before, why can it not be done?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Why can we not go the whole way?
Mr. Graham Doyle:
If we were doing large fields of large numbers of social houses - we try to integrate social housing into the community for all kinds of very good reasons and we are committed that - and when these schemes are developed, they need to fit into a certain site profile and they need to fit in with what has been planned for the area. We have made very clear, to try to short-circuit that design process, what is acceptable, what is required, what meets the standards and what we will fund.
Brian Stanley (Laois-Offaly, Sinn Fein)
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With architects of fees of 12 %, that is nuts.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The quickest way of reducing it is to have a generic design. Can I take Mr. Doyle up on the issue of fitting them in? I get that but it does not have to be huge estates like the ones in the south of the city that were built during the 1970s and 1980s.
Brian Stanley (Laois-Offaly, Sinn Fein)
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This can be done. A lot of these are infill developments and a generic model can be used for them. They can also be used on greenfield sites. This can be done; it is not rocket science. It has been done over and over again and with huge success in providing social housing in decades gone by. The one thing that drives me bonkers is that we seem to have every reason we cannot do what worked in the past. If it worked in the past, there is no reason we should not do it now.
Can I ask Mr. Doyle about PPPs? Can he come back to the committee on this? Can he have a serious chat with those at the top in the Department around what is being proposed and tell me if it can be done, or why it cannot be done? Can we go a step further not just in terms of internal design?
Mr. Graham Doyle:
Our social housing guidelines encourage the use of the generic designs we have. We have not mandated it but the use of generic design is encouraged. What we are now trying to encourage much more of, particularly around the delivery of social housing, is the modern methods of construction such as offsite construction which speeds up delivery and will ultimately in the future bring down the cost. They are two things we are looking at at present.
Brian Stanley (Laois-Offaly, Sinn Fein)
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On costs and the PPPs, those first two bundles are coming in at €633,000 per unit. Some of those would be one-, two- and three-bedroom units. They would be small units. That is an absolutely astronomical sum. I know Mr. Doyle will say it is for the full lifespan over 25 years and that there is maintenance. However, from what I have seen, and I have checked, the maintenance in the local authorities works out at between one fifth and one eighth of what comes in in rent. That means the rent more than covers it. The rent is normally five to eight times higher than the actual maintenance costs for the local authority. I am puzzled as to where this figure of €633,000 per unit came from. I checked again yesterday to see the cost for local authorities. The all-in costs - it goes back to Deputy Verona Murphy's point - with site costs, architects fees and all of the other expenses - come to €250,000, or €290,000 for good-sized local authority housing. This figure is two and a half times that. Why is that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The only additional costs-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that €633,000-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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The only difference though is-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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The only extra here is maintenance. I told Mr. Doyle that the rent, and I keep an eye on these things, collected by the local authorities can be five time to eight times the amount spent on maintenance. That is a fact and he can check that for himself.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am open to correction on this but I have looked at a few local authorities.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Finally-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Can Mr. Doyle clarify-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Who gets the rent on those PPPs over the 25 years? Who collects it and who holds on to it or passes it on?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The PPP builds them-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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No part of the rent goes to the PPP.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. Go ahead.
Mr. David Kelly:
All of the PPPs to date have involved partnerships with AHBs which come in to manage the properties as part of the contract arrangements in place. The AHB will manage those properties on behalf of the local authorities and developers for the 25 year period. The properties are then handed back to the local authority.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Until recently AHBs could borrow for 0.5% but we are paying €633,000 per unit. That is an astronomical figure and the maintenance does not run to that kind of figure to bridge the gap between the actual cost of the build and the final figure of €633,000. That is all I am saying.
Mr. David Kelly:
All PPPs undergo a public service benchmark so there is a detailed financial analysis to ensure this provides comparable value for money. When one looks at the overall number over 25 years it looks very big but that is benchmarked against the cost of the State delivering through other means.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Are the Minister and the Government aware of that figure?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The figure of €633,000 for the first two bundles.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Overall, is the Minister aware of that figure of €633,000 per unit for the first two bundles?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Was the Minister briefed on it, Mr. Doyle?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay, we have the figure-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Could the witnesses come back to the committee and clarify whether the Minister is aware of that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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That is okay, thank you. I am just concerned about the cost and value for money.
Imelda Munster (Louth, Sinn Fein)
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On the €633,000 figure for one property, be it one-, two- or three-bedroom, can the witnesses say definitively that the Minister has not been made aware of it? Did the witnesses have discussions with him or did anyone in the Department say that this PPP is €632 million so we would get 1,000 homes which works out at €633,000 per home?
Imelda Munster (Louth, Sinn Fein)
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Yes we know that-----
Imelda Munster (Louth, Sinn Fein)
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No, my question-----
Imelda Munster (Louth, Sinn Fein)
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Did Mr. Doyle tell him?
Imelda Munster (Louth, Sinn Fein)
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Did anyone from Mr. Doyle's Department inform the Minister?
Imelda Munster (Louth, Sinn Fein)
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No, we know that-----
Imelda Munster (Louth, Sinn Fein)
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We are talking about the specific cost of these homes coming in at €633,000. Is the Minister aware of that? Has that been brought to his attention, "Yes" or "No"?
Imelda Munster (Louth, Sinn Fein)
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So he may not know.
Imelda Munster (Louth, Sinn Fein)
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Mr. Doyle's Department certainly-----
Imelda Munster (Louth, Sinn Fein)
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Yes, we know that.
Imelda Munster (Louth, Sinn Fein)
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Mr. Doyle keeps saying that. He knows exactly the question I am asking of him. Did Mr. Doyle, as Secretary General, or anyone in his Department inform the Minister that was the actual cost per property?
Imelda Munster (Louth, Sinn Fein)
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Chair, could we check that? Many committee members have asked for information to be forthcoming. Is there a situation at this stage, because this has happened once too often, where we request information and it is put on the long finger? I am sure there are departmental officials watching the meeting. Could we get that information on whether or not someone in the Department informed the Minister that those individual properties would work out at that figure before the end of the meeting? It cannot be a big deal to ask someone to check.
Imelda Munster (Louth, Sinn Fein)
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Can Mr. Doyle get that-----
Imelda Munster (Louth, Sinn Fein)
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Could Mr. Doyle seek clarification on whether or not the Minister was informed that was the actual cost per home? Can he get clarity before the end of the meeting, please?
Imelda Munster (Louth, Sinn Fein)
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I hope he does.
Imelda Munster (Louth, Sinn Fein)
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I wish to return to the target of the delivery of 29,000 homes in 2023. Did I hear correctly that Mr. Doyle cannot indicate whether they will achieve that target because of the industry or it is to do with the whole sector?
Imelda Munster (Louth, Sinn Fein)
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Mr. Doyle cannot indicate-----
Imelda Munster (Louth, Sinn Fein)
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However, Mr. Doyle cannot give clarity as to whether or not that will be achieved this year. Is that not what he said to one of my colleagues?
Imelda Munster (Louth, Sinn Fein)
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Can I put a question to somebody from the Department of Public Expenditure and Reform? That was the target that was given to the Minister at the first briefing. On day one, the Minister for Public Expenditure and Reform-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Minister for Finance, I think.
Imelda Munster (Louth, Sinn Fein)
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The Minister for Finance, sorry. If it is not a target that the Secretary General can speak to, can anyone from the Department of Public Expenditure and Reform do so? The briefing that was given indicated that achieving the overall delivery target of 29,000 new units would be challenging. Can Ms Costello shed light on whether the Minister for Public Expenditure and Reform is responsible for setting that target and the delivery or it is Mr. Doyle?
Imelda Munster (Louth, Sinn Fein)
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I am asking Ms Costello because Mr. Doyle could not clarify it.
Imelda Munster (Louth, Sinn Fein)
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Mr. Doyle can clarify it. He could not give the figures, however, so I am asking Ms Costello.
Imelda Munster (Louth, Sinn Fein)
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The Secretary General would be responsible for the delivery.
Imelda Munster (Louth, Sinn Fein)
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Yes. We know that. Mr. Doyle is the Secretary General. He was asked to give confirmation that the delivery would be met and he would not answer.
Mr. Graham Doyle:
I absolutely will answer. It is a target for the industry. There are many factors that impact on the delivery of overall output for the industry. We are trying to set a context across Government. Housing for All is an all-of-government programme. We are trying to set a context that allows industry ultimately to deliver around that target level.
Imelda Munster (Louth, Sinn Fein)
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Mr. Doyle is talking about the industry in general, both private and public.
Imelda Munster (Louth, Sinn Fein)
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Is it not Mr. Doyle's remit to put a framework in place to ensure that delivery happens?
Imelda Munster (Louth, Sinn Fein)
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So that is Mr. Doyle's job. That is the job he is tasked with doing.
Imelda Munster (Louth, Sinn Fein)
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It is like the Chair said. There is every excuse under the sun as to why-----
Imelda Munster (Louth, Sinn Fein)
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It is a reality that Mr. Doyle cannot seem to get to grips with. The reality for people out there is that we are living in a housing emergency and he is not meeting his targets. That is the reality.
Imelda Munster (Louth, Sinn Fein)
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Private delivery.
Imelda Munster (Louth, Sinn Fein)
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Was the target relating to public and social housing met?
Imelda Munster (Louth, Sinn Fein)
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Of course not.
Imelda Munster (Louth, Sinn Fein)
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Given Covid and that-----
Imelda Munster (Louth, Sinn Fein)
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If Mr. Doyle is referring to that for goodness' sake, then God help us all.
Imelda Munster (Louth, Sinn Fein)
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The research carried out by the Housing Commission estimates the number of homes required. The Government target delivery for this year is 29,000. The Housing Commission estimates that what is needed is anywhere between 40,000 and 62,000. That is almost or more than double what the Government estimates needs to be delivered. Who is right and who is wrong?
Imelda Munster (Louth, Sinn Fein)
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Would it be the case that the Government has completely underestimated the number of homes that need to be delivered this year?
Imelda Munster (Louth, Sinn Fein)
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Is the Housing Commission's research wrong?
Imelda Munster (Louth, Sinn Fein)
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I suggest that if Mr. Doyle is saying that the Housing Commission's targets are not wrong, he take a serious look at matters and-----
Imelda Munster (Louth, Sinn Fein)
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Mr. Doyle cannot even give a commitment that they will be delivered this year and he failed to deliver the targets last year, so we have to take what he says with a pinch of salt.
Imelda Munster (Louth, Sinn Fein)
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He failed in the delivery of public homes.
Imelda Munster (Louth, Sinn Fein)
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With all due respect, I suggest that Mr. Doyle works a bit harder. I come up O'Connell Street every morning and I practically trip over people lying in doorways. That is not to talk about three and four generations-----
Imelda Munster (Louth, Sinn Fein)
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In fairness, we cannot see evidence of that. The job Mr. Doyle is tasked with is to deliver and he is failing to do so. Even this year, to give people the slimmest glimmer of hope, he could not do that.
Imelda Munster (Louth, Sinn Fein)
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In the middle of a housing crisis, it is disgusting.
Imelda Munster (Louth, Sinn Fein)
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Is Mr. Doyle is confident in his figures? He is coming in here and spewing out figures and yet he cannot back it up and say that "Yes, we can say that we will deliver. We failed last year but we will deliver this year."
Imelda Munster (Louth, Sinn Fein)
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However, he failed again and he-----
Imelda Munster (Louth, Sinn Fein)
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Mr. Doyle failed last year. Will he fail again this year?
Imelda Munster (Louth, Sinn Fein)
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Will a representative from the Department of Public Expenditure and Reform and, perhaps, the Comptroller and Auditor General outline a process whereby the Government might decide whether or not to increase a Secretary General's grade within a Department? What is the formal process involved in the context of the review? Is it based upon particular criteria, such as the size of a Department? What is the general process that goes with upgrading somebody from, say, grade II to grade I?
Ms Clare Costello:
With respect to pay policy for senior public servants, it is set out that there are three different grades. At the moment, that process is undergoing review. An independent panel was established last year, chaired by Dr. Donal de Buitléir, which is looking at the process for setting things such as pay terms and conditions, tenures and how Secretaries General and the wider senior public service pay matter is treated.
Imelda Munster (Louth, Sinn Fein)
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As it stands, would it be dependent on the size of the Department involved and various other criteria. Is there a certain criterion at the moment or could it be decided at the whim of the Secretary General of, say, the Department of the Taoiseach?
Ms Clare Costello:
On the standard Secretary General grades, Secretary General I applies in the Departments of the Taoiseach, Public Expenditure and Reform and Finance. The grade that applies in other Departments is Secretary General II. The regrading will be a matter for the Department of Public Expenditure and Reform.
Imelda Munster (Louth, Sinn Fein)
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I heard one of my colleagues raise this matter earlier. There seems to be some confusion around the agreement for pay upgrades to grade I. If that original agreement was made with an individual from the Department of the Taoiseach who is now in a different Department or a new role, could that not simply be clarified by asking about that initial conversation? Is there something in writing? Why would somebody not contact somebody just to-----
Mr. Graham Doyle:
I responded to the question earlier. There are some HR-related matters that go back quite a few years. They have been under discussion. There was an element of that portrayed in media coverage. They are HR issues and they are dealt with by central Government Departments. I am sure those will be clarified through normal employee-employment engagement.
Imelda Munster (Louth, Sinn Fein)
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That is my question.
Imelda Munster (Louth, Sinn Fein)
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We know that, but my question is why that is not being clarified. If the person who led the Department to believe that this would be the case is still in a Department or in another role, why is simple clarification not sought on that?
Imelda Munster (Louth, Sinn Fein)
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I just-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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No, Deputy. You have gone way over time. I will let you in a second time. I call Deputy Verona Murphy. We will have a second round of six-minute slots because we could have latecomers.
Verona Murphy (Wexford, Independent)
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May I ask about modular homes?
Verona Murphy (Wexford, Independent)
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The remit of the proposal for 700 modular homes falls within Mr. Doyle's Department.
Verona Murphy (Wexford, Independent)
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Okay, but there is a proposal for Mr. Doyle's Department to give local governments €100 million towards the building of modular homes. Is that correct?
Verona Murphy (Wexford, Independent)
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Very simply, is the €100 million towards the cost of the modular homes or the cost of the sites?
Verona Murphy (Wexford, Independent)
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There is a proposal to give local government €100 million towards the cost of developing sites for modular homes, and national planning policy is to serviced sites. In Wexford, we have put together our county development plan. the proposal is that almost 60% of zoned lands in Wexford would be d. Mr. Doyle spoke earlier about the fact that the Department had hoped the costs would be reduced to help it meet its targets. Does the Secretary General agree? He is an accountant by trade. Is that not correct?
Verona Murphy (Wexford, Independent)
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Does Mr. Doyle think it is logical to impose a residential land tax on zoned lands which are not being built on because of a viability issue and that, at 3%, depending on the value of the land, the imposition of that tax will reduce the cost of housing? He said earlier we have a viability issue, which means that, clearly, it is not affordable to build the houses, but now it is proposed that on the vacant site that is not being built on we should impose a land tax at a rate of 3% per annum that is not refundable - or, at least, currently not refundable. Does that sound logical? Does it sound like it would serve to reduce housing costs?
Verona Murphy (Wexford, Independent)
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No, please-----
Verona Murphy (Wexford, Independent)
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Please, Chair. You asked me to remain calm. I have asked a specific question. Is it logical? I am not asking Mr. Doyle to suppose anything. I am asking a binary question. Is it logical?
Brian Stanley (Laois-Offaly, Sinn Fein)
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On that issue-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Just hold on a second, Deputy, until we get an answer.
Verona Murphy (Wexford, Independent)
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I asked Mr. Doyle-----
Verona Murphy (Wexford, Independent)
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Even though the issue was, as Mr. Doyle said earlier, viability. Logically, then, as the Secretary General looking for an increase of €15,000, Mr. Doyle is telling me that it is correct to impose a tax on such land - we are all saying there is a viability issue - and correct to increase the taxes pertinent to housing development in the middle of the worst housing crisis ever.
Verona Murphy (Wexford, Independent)
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The housing policy, the national planning policy, is to lands. What will that do? It will serve to drive up the site cost of the lands that remain zoned because, as Mr. Doyle just said, supply and demand is the issue. Less land means higher costs.
Verona Murphy (Wexford, Independent)
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I am asking for logical conclusions.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Allow the Secretary General to answer the question, Deputy.
Verona Murphy (Wexford, Independent)
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I ask Mr. Doyle to come back to the viability issue. Does that further create a viability issue or does it reduce it?
Verona Murphy (Wexford, Independent)
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No. I did not ask Mr. Hogan, with all due respect. Mr. Doyle is the accountant. He is the Secretary General. Logically, does this serve to enhance or to decrease viability? Which is it?
Verona Murphy (Wexford, Independent)
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How do we encourage the use of land by de-zoning land that is zoned and, possibly, in some cases, serviced?
Verona Murphy (Wexford, Independent)
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No, it is not different.
Verona Murphy (Wexford, Independent)
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No. There are two issues. I specifically stated that. One is the residential zoned land tax; the other is the national planning policy to lands. Neither of them makes sense if we are trying to reduce the cost of housing in order to make it viable for commencement of current planning permissions.
By the way, going back to Mr. Hogan, I assume that the national guidelines he says are coming will have no bearing on the planning permissions we have that currently are not commenced. I assume that the Department has not made any other recommendation because Mr. Doyle does not even agree with what I am saying. He does not even see that what I am saying is logical.
Verona Murphy (Wexford, Independent)
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All the policy that has been put in place is serving to drive up the cost of providing housing. It does nothing to ensure commencement. It does the total opposite, but Mr. Doyle is saying he does not agree with that.
Verona Murphy (Wexford, Independent)
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We know what it is aimed at.
Verona Murphy (Wexford, Independent)
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Does Mr. Doyle, as the Secretary General, believe that this will work and help the Department meet its targets?
Verona Murphy (Wexford, Independent)
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If there were not a viability issue, that land would be in use. It would be-----
Verona Murphy (Wexford, Independent)
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We have not seen any land speculation in Wexford.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. Whether or not it works is a debate-----
Verona Murphy (Wexford, Independent)
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I am concerned about the grades Ms Costello mentioned.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is a policy of the Government-----
Verona Murphy (Wexford, Independent)
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I have just a quick question about the pay grades we talked about. Are they based just on years worked? Have they nothing to do with experience?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will ask the Department of Public Expenditure and Reform to answer that.
Verona Murphy (Wexford, Independent)
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I am just asking for clarity.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We will ask Ms Costello about that. You are referring to the Secretary General grades, Deputy.
Verona Murphy (Wexford, Independent)
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I am referring to the pay grades.
Brian Stanley (Laois-Offaly, Sinn Fein)
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If you could briefly outline that-----
Verona Murphy (Wexford, Independent)
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Clearly, from what I have read, the issue is that the Secretary General is at grade II and needs to go to grade I. Is that based on experience, years worked or what?
Brian Stanley (Laois-Offaly, Sinn Fein)
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All Secretaries General are grade II, with the exception of those in the three Departments in question. Is that correct?
Verona Murphy (Wexford, Independent)
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That is not the question I am asking. The question I am asking is what makes grade I so special. What is it based on? Is it the size of the Department and the management of-----
Verona Murphy (Wexford, Independent)
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The Department of Housing, Local Government and Heritage is not one of them. Is that the case?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Thank you for that clarification. I call Deputy Catherine Murphy.
Catherine Murphy (Kildare North, Social Democrats)
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What does the Department do and what does it choose when it comes to looking at value for money in respect of the various housing schemes? How does it select those if it is seeking that value for money? I remember saying in 2014, when HAP was introduced, that it would become unsustainable if there was not a large-scale housing building programme. We are hearing about PPPs that have been evaluated.
We can see the position with turnkey projects. A 2020 review found that it was 30% more cost efficient to build directly rather than use turnkey projects, so there is a value for money issue at play. There are examples of AHBs whereby leases are being subsidised by way of RAS. We know that apart from the human cost, homelessness is very expensive. There are wider societal and economic issues relating to the under-delivery of housing.
All of these schemes that involve a short-term element are not permanent solutions. What has the Department done with regard to value for money for each of those schemes? Has it tested them individually? What has it found? What is its methodology?
Catherine Murphy (Kildare North, Social Democrats)
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What has the Department done?
Catherine Murphy (Kildare North, Social Democrats)
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Can Mr. Doyle give us a list of what the Department has tested from a value for money perspective?
Catherine Murphy (Kildare North, Social Democrats)
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Can we see those?
Catherine Murphy (Kildare North, Social Democrats)
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To see where there is an assessment of value for money and what the methodology is.
Catherine Murphy (Kildare North, Social Democrats)
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It would be useful to see that because, to be honest, regarding some of this stuff, including these enhanced leases, it is very difficult to see where you could possibly look at that from a value for money perspective and come to the conclusion that there is value for money so let us have a look at those.
I have a question about the local government fund, something about which I routinely ask, and the review of the baselines and the change in them. The population with regard to the local government fund really dates back about 25 years. That is the basis of how they were originally determined and it has not changed much in that time. The population of the area I represent has doubled in that time but the baseline has not changed and this determines how much local property tax the local authority can spend. You cannot grow a population without growing the services to meet that population increase but that is exactly what has happened. Trying to figure out the local government fund is akin to the third secret of Fatima. I spent several months going through this. If members of the public, particularly those in areas that are growing, really understood this, they would be up in arms because the money is not being spent where it needs to be spent because the system is not population-based. It pays no attention to population. What is happening? I know a political decision was made on this. What information does the Department have? Has it produced reports on how it is be managed in terms of when that change is going to happen because parts of the country are at breaking point in terms of delivery of services that should go with their populations?
Catherine Murphy (Kildare North, Social Democrats)
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Complex is an understatement.
Ms Sinead O'Gorman:
The Deputy is correct. The baseline funding has remained unchanged since 2014-2015. It was not possible to adjust the baselines or undertake the review in advance of the local property tax, LPT, allocations for 2023 due to the delayed census and also to take into account the LPT yield date following revaluation. An examination of the current LPT baseline funding has commenced and is expected to conclude in advance of the LPT decisions to be taken prior to the budgets for 2024. The process will include consultation with the sector and relevant stakeholders. Elected members are the key stakeholders in that regard. Previous reviews and studies of local authority funding will be assessed.
The Deputy is correct. Undertaking such a review is complex and the circumstances of local authorities vary so significantly in terms of population, population density, service needs, geography, topography, roads and coastlines. They are all-----
Catherine Murphy (Kildare North, Social Democrats)
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Would Ms O'Gorman accept that you cannot double your population and not provide the resources to go with that?
Catherine Murphy (Kildare North, Social Democrats)
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Will this be completed in time for the budget this year?
Catherine Murphy (Kildare North, Social Democrats)
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That will be for next year.
Catherine Murphy (Kildare North, Social Democrats)
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Can I correct Ms O'Gorman on one thing? It was not 2014. In fact, it goes back to the needs and resources model, which would have taken account of the census of 1996 as opposed to a more recent census. There is no reason why this could not be reviewed even using the 2016 census. It could then have been amended and it should be amended at each census.
Neasa Hourigan (Dublin Central, Green Party)
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I want to return to Vote 34, which I mentioned earlier. I am sorry; I know it is not the most exciting of subjects but I just want some clarity. My questions are largely for Ms Costello and Mr. Doyle. I want to understand the decision process involving that €314 million. As outlined by the officials so far, the Department felt that this was a moving around of funds that had been saved in another area and it informed that the Department of Public Expenditure and Reform that this was how it was going to proceed and bring it to Cabinet. The Department of Public Expenditure and Reform had not preapproved that but said the Department of Housing, Local Government and Heritage could proceed and carry out a virement - I am not an economist so I am not good on that word - but that the next time the Department of Housing, Local Government and Heritage did that, it had to tell the Department of Public Expenditure and Reform beforehand. Is that a fair representation of what happened?
Neasa Hourigan (Dublin Central, Green Party)
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How much?
Neasa Hourigan (Dublin Central, Green Party)
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Could the Comptroller and Auditor General differentiate between a substantive increase and a technical Supplementary Estimate?
Neasa Hourigan (Dublin Central, Green Party)
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I thank the Comptroller and Auditor General for that. It makes it much clearer because I have seen technical Supplementary Estimates of quite small amounts.
Neasa Hourigan (Dublin Central, Green Party)
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And they are laid before committees?
Ms Clare Costello:
I thank the Comptroller and Auditor General for the clarification. A total of €197 million of it was subject to a substantive Estimate. That was because there was insufficient funding in the Vote because of the in-year Government decisions to do the commercial rate waiver. At the time of the discussions between ourselves and the Department of Public Expenditure and Reform, significant savings were identified, and it was a judgment call, but it was felt that these savings could be used to fund the remainder of the commercial rates waiver-----
Neasa Hourigan (Dublin Central, Green Party)
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I am not disputing the material point of whether or not it was the right decision. To be clear, I am asking about the process.
Neasa Hourigan (Dublin Central, Green Party)
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My question involves who made the original decision. Did the Department come to the Department of Public Expenditure and Reform and say it was going to do that?
There would have been ongoing conversations around the amount that would have been required. The Department would have been identifying savings. At that stage, it would have been approximately six weeks before the end of the year. The Department was doing a calculation to identify savings.
Neasa Hourigan (Dublin Central, Green Party)
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Where was the point at which the Department of Public Expenditure and Reform said that the next time this happens, the Department of Housing, Local Government and Heritage has to get pre-approval?
Neasa Hourigan (Dublin Central, Green Party)
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With regard to the Comptroller and Auditor General, there is a point at which the Department of Public Expenditure and Reform is asking the Department of Housing, Local Government and Heritage to get pre-approval where that arises again. The Department of Public Expenditure and Reform guidelines indicate that the better approach to transferring the funding is to use the Supplementary Estimate. There is a point somewhere. Maybe the Comptroller and Auditor General will contribute.
Neasa Hourigan (Dublin Central, Green Party)
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Why did the Department of Public Expenditure and Reform issue that letter?
Ms Clare Costello:
As a part of the sanction process, the Department of Housing, Local Government and Heritage would have approached our Department to look for formal sign-off on all the virements that would have happened throughout the year. As part of that, as the Comptroller and Auditor General has outlined, we would have highlighted to the Department the need to seek provisional sanction in advance going forward.
Neasa Hourigan (Dublin Central, Green Party)
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It sounds as though the Department of Housing, Heritage and Local Government operated in a way that is quite outside the normal process. The Department of Public Expenditure and Reform said that this was fine but that the Department needed to tell it first.
Neasa Hourigan (Dublin Central, Green Party)
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For €340 million, I would say it did.
Neasa Hourigan (Dublin Central, Green Party)
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Nobody is arguing that there was not an extreme reason for it. However, I am asking about the Department of Public Expenditure and Reform's reason for stepping outside the process.
Neasa Hourigan (Dublin Central, Green Party)
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I get that. Ms Costello has said that already. I just do not understand why that choice was made. Are there limits to the cumulative number or value of the transfers under these kinds of informal agreements?
Neasa Hourigan (Dublin Central, Green Party)
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Have any guidelines been issued by the Department of Public Expenditure and Reform to Departments?
Neasa Hourigan (Dublin Central, Green Party)
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It is extremely wide at €314 million.
Neasa Hourigan (Dublin Central, Green Party)
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I apologise for cutting across Ms Costello again. It is large, numerically, with regard to the subhead.
Neasa Hourigan (Dublin Central, Green Party)
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Is that a percentage or a number? I know I am over time.
Neasa Hourigan (Dublin Central, Green Party)
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What does large mean then?
Neasa Hourigan (Dublin Central, Green Party)
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It is a judgment call. There are no guidelines.
Neasa Hourigan (Dublin Central, Green Party)
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I am-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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You are going over time, Deputy.
Neasa Hourigan (Dublin Central, Green Party)
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May I finish with one quick question?
Brian Stanley (Laois-Offaly, Sinn Fein)
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You may, to conclude.
Neasa Hourigan (Dublin Central, Green Party)
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The Department of Public Expenditure and Reform not having any numerical guideline makes the work of committees incredibly difficult with regard to providing oversight, because there does not seem to be any rules around whether a Department can sidestep committees. If the Department of Public Expenditure and Reform is serious about that - this is very big money - is it proposing to rewrite or change the public financial procedures? It is effectively doing so.
Neasa Hourigan (Dublin Central, Green Party)
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That is a "Yes" or "No" question. Is the Department of Public Expenditure and Reform revising the public financial procedures in any significant way?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I suggest that Ms Costello should bring back to the Department what is happening here. I refer to the discussion and specifically to the points Deputy Hourigan is making regarding our concern about such a large virement of €340 million being unvoted. The lack of democratic accountability is significant.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We understand that situations arise in the course of a year, especially in a big Department such as the Department of Housing, Local Government and Heritage, which is handling a great deal of money. The problem is that neither the Dáil nor the committee was involved. There is an issue here. I ask you to convey that back to the Department. We will not hold you, as principal officer, over a barrel for it, but we ask you to bring this back to the Secretary General and the Minister. We need democratic accountability.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that.
Neasa Hourigan (Dublin Central, Green Party)
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The decision was brought to the Cabinet, not to the Government.
Brian Stanley (Laois-Offaly, Sinn Fein)
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An Oireachtas committee can be convened very quickly. I would say, with respect, that in future it is about respecting the primacy of the Parliament and its committees.
Brian Stanley (Laois-Offaly, Sinn Fein)
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A discussion on approved housing bodies, AHBs, arose last week out of an issue I brought up last week. I have discussed it with Mr. Doyle in the past. I know we are trying to deal with a legacy situation. Nobody in this room has been responsible for the creating the situation. When these small AHBs reach the end of life, what happens to the property? What happens to the tenant? What protections are there? Some of these small AHBs were set up in order to provide 20, 30, 40 or 50 houses. They are a credit to the people who set them up. They were people who worked voluntarily. I am not casting any aspersions on them. However, we are reaching a situation where things are moving on. Some people may be moving on in years and the homes are coming out of the terms of loan. What happens now? What is happening in a particular AHB - I will not name it, but you know the one to which I am referring - is that there are no rent controls, the tenants are being handed forms to claim rent supplement from social welfare and €10,000 in hello money is being charged before one gets in the door. That is ruling people out. These houses were built by the taxpayer for social housing purposes to meet a housing need; in most cases, for the most vulnerable groups, that is, elderly people and people with disabilities.
People who were tenants of social housing now find themselves dealing with a management company that has been brought in. That is the interface and with whom the tenants are dealing. I brought this to the attention of the agency and the regulator. It is a very welcome move that we have a regulator. The head of the regulator seems to be a formidable woman. I wish her well in her work. However, the houses effectively stop being social housing. You are correct in that there is a bit of time with some of the houses, but some of them are maturing very quickly. They are out of the term of the loan, which means we could wind up with the wild west, for want of a better term. What can we do in the short term? Someone needs to get a grip on this, because I do not have answers for these tenants. Other Deputies and councillors throughout the country do not have answers. This problem will come out all over the place in the coming months and years. What can we do to try to give some level of comfort? The thought of taxpayers paying for rent on a house that they built is absolute madness. The fact there is a possibility that these houses could be moved on without us, the council or anybody else having any control over it, and with hello money being charged, is crazy stuff. The houses were built for vulnerable people and people are being asked for €10,000. What can we do about this in the short term?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I do not.
Mr. Graham Doyle:
In general terms, we are trying to establish facts. We have already spoken to the regulator with regard to what can be done about that specific incidence, once we establish all the facts around it. Both of the schemes go back a very long period of time. We are trying to establish the facts and work with the regulator. We have spoken about the unencumbered units, the terms of reference of which my colleague has here beside me. We will provide those to the committee. We will work through those issues. What we have seen more often, or what colleagues and the regulator have seen more often, is a situation where some of these AHB properties, in the circumstances you describe where people may be getting on in years and so forth, have been transferred to other AHBs. We insist on that being done at no cost, which is what has happened.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What I am asking you is-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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That is okay, Mr. Doyle. I do not wish to rush you, but the problem is that a situation has arisen whereby a private management company is already in.
The private management company is now dealing directly with these tenants and handing them the forms to go and claim the rent supplement. That company's officials are the people who are now setting the rent. They are now the people in charge. Can anything be done in the short term? I know one of the principal officers, Mr. Roger Harrington, is dealing with the issue and he did come back to me on it. I ask Mr. Doyle to ensure that a principal officer sits on top of this because it is an escalating problem.
Mr. Graham Doyle:
There are actually a number of principal officers trying to deal with the situation going forward to put in whatever safeguards need to be put in. If those ultimately need to be further legislative safeguards, we can propose those as well.
With regard to that specific matter, yes, that specific principal officer who appeared before the committee last week is dealing with that matter to try to establish the facts that go back a long period and work with the regulator. The initial piece now is that the regulation model is a significant change. I think it has helped in the industry significantly and this is exactly the type of thing we have a regulator for at this point.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. The allocations do not come through the local authority. They have not even come within the term of the loan. While the loan was maturing and before it was discharged, it was not the usual situation where the allocations came through the local authorities. The assessment of social housing need has to be done by the local authority. We cannot have a situation where people make it up as they go along. The local authorities have the lists of who is eligible in terms of income, housing need, family size, disabilities and the rest of it. We cannot go outside of that and break that model with houses that are built by the taxpayer. We have to get that back on track.
This is the final thing I will ask of Mr. Doyle. Will he please put it to the Minister to try to come up with a model? None of us will be here in 25 years' time but the people who are sitting here will be facing similar problems. This will be a rolling issue. We must move to an equity model. In other words, instead of the State giving a loan, grant or whatever else under the five different models, which we went through last week so I will not do so again, but which included the different housing and financing programmes for AHBs, we must put in place an equity model. If the State owned 10% of those, this could not happen. The State or the local authority has control of it. It is not about standing on anybody's windpipe or anything like that. When we build something and pay for it, we cannot just take three deep breaths and head off into the wild west. We have to try to manage this in a housing crisis. These are houses for social need. We have to try to make sure that those people who are going into them are those who are most in need and that they have a reasonable way of dealing with the landlord or AHB. One of the pieces of information I ask Mr. Doyle to take back with him is to have a discussion within the Department and also perhaps with the Minister-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Doyle advises the Minister. He needs to advise him of this issue. In fairness to the Minister, he is dealing with a lot. I criticise him often but he has a lot on his plate. He may not be aware of the snowball effect of this. It is the case with a number of these AHBs that the loan has been or will be discharged fairly soon. We are facing a really large problem.
Mr. Graham Doyle:
Three elements of work are under way within the Department at the moment. There is the capital advance leasing facility, CALF, review, which the Minister has been part of and is essentially happy with at this point. We now need to make a proposal to the Department of Public Expenditure and Reform about changes to the CALF model, which we have worked through and on which we have had stakeholder consultation. The second piece is the unencumbered units and what happens in that regard, which is much of what the Chairman has been talking about. That piece of work is ongoing. The third piece of work is what the Chairman referred to when he spoke about the equity piece, which has been raised by some of the bigger AHBs. We now have to continue a conversation and try to get to a point where we have an approach to this gearing issue. I spoke to representatives of the association and also the alliance that represents the big AHBs last week. This issue of gearing was raised. That is, therefore, another work stream.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Does Mr. Doyle agree with me that having equity would give that lean on a house, apartment or property?
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have to make sure that social housing remains social housing.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I agree.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Absolutely.
Verona Murphy (Wexford, Independent)
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I wish to address the Secretary General's remarks on land hoarding. Everything we have heard today has been the Department blaming everything that is outside of its control from interest rates to inflation and now land banks. The reality is that land hoarding is a false narrative and if it does exist, it is very much in a very small minority of cases. It certainly does not exist in County Wexford and I doubt very much if it exists in the Secretary General's home county of Waterford. It may exist in a small percentage of cases here in Dublin.
We need to get to grips with the real issue, which is planning policy. Mr. Doyle has now been Secretary General for three years, in which time he has had much correspondence from me pointing out where planning policy is, in effect, causing problems of viability and all the other issues. Mr. Doyle is well aware that 60% of the planning permissions granted will never commence because of viability, and 70% of those not granted will never commence because of viability. The Department blames all the outside influences, however, and then if planning is to commence, it wastes the taxpayers' money by purchasing property that is essentially driven up by the Department's lack of action.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Deputy might ask her question.
Verona Murphy (Wexford, Independent)
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The cost of housing has been driven up beyond belief. The Department has done it all by itself because it has refused to take any cognisance of the poor planning policy that has left us where we find ourselves today. If I were the Minister, I certainly would not be giving Mr. Doyle an increase; I would be asking him to go and look for a new job.
Alan Dillon (Mayo, Fine Gael)
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With regard to the devastating impact the pyrite mediation and defective concrete block schemes and now the apartment defects are having on families and households, and which will certainly have an effect on the Exchequer, what is the Secretary General doing to safeguard public funds with a more robust regulation regime? How is he going to put that in place as regards building standards nationwide?
Mr. Feargal ? Coigligh:
The State is paying a significant bill and will continue to pay a significant bill to address legacy defects, particularly going back to the Celtic tiger years. It is important to note that while there may be more work to be done, a huge amount has been done over the past decade to ensure that what happened in the 2000s and before does not happen again. That has happened at a number of levels. New construction standards came into place in 2013, for example. New building regulations came into place in 2014 that very clearly assign responsibility for each stage of the construction process and the sign-off in that regard. We have supported the local government system in terms of developing a shared service office and national building control office. In other words, a huge amount has already been done to improve standards. Lastly, there was the enactment this year of legislation that will provide for the construction industry-----
Alan Dillon (Mayo, Fine Gael)
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To make a register.
Alan Dillon (Mayo, Fine Gael)
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What regulations has the Department implemented to ensure that the mica and pyrite issues do not reoccur? How are these new regulations being monitored currently?
Mr. Feargal ? Coigligh:
Construction product regulations came into effect in 2013, for example, with regard to construction standards that we use.
The National Standards Authority of Ireland, NSAI, prepared additional national advice and guidance on the EN product standards, namely SR 16 and IS 325. The Department recently introduced specific guidelines on the marketing of concrete blocks which address some of the issues. The Minister asked for the addition of quarries in Donegal. The Department has taken many steps and the National Building Control and Market Surveillance Office works with local authorities to ensure those steps are enforced.
Alan Dillon (Mayo, Fine Gael)
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Have we had any cases of defective concrete blocks since the new regulations were implemented?
Mr. Feargal ? Coigligh:
I am not aware that we have. The Deputy might have seen that an issue arose last year in Donegal. The Minister requested an audit that was carried out by the national building control office in association with Geological Survey Ireland, GSI, and Donegal County Council. They found some fault with paperwork and process but the block standards seemed to be fine. That shows the regulations are working.
Alan Dillon (Mayo, Fine Gael)
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Why has the re-establishment of the building regulatory advisory body been kicked from 2022 to 2024?
Alan Dillon (Mayo, Fine Gael)
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This is a serious matter. What measures are currently being taken about it?
Alan Dillon (Mayo, Fine Gael)
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The correspondence we received stated that input to an expert panel was being sought in quarter 1. Will Mr. Ó Coigligh give the committee some further information about the work that is currently being undertaken?
Alan Dillon (Mayo, Fine Gael)
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The expert panel on the re-establishment of the independent building standards regulator. At present we do not have one.
Mr. Feargal ? Coigligh:
At present we have a national shared service office. Each local authority has the legal responsibility. A shared service office run by Dublin City Council provides a national service. Last week the Government decided that we should establish an independent statutory regulator and we will now press ahead with that.
Alan Dillon (Mayo, Fine Gael)
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Will it take until 2024 for it to be implemented?
Alan Dillon (Mayo, Fine Gael)
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What resources are allocated to the current regulations to ensure they are adequate to monitor the regulations?
Alan Dillon (Mayo, Fine Gael)
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Its implementation is in the Department's remit.
Alan Dillon (Mayo, Fine Gael)
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The Department must know.
Alan Dillon (Mayo, Fine Gael)
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The Department allocates the resources to the local authorities.
Alan Dillon (Mayo, Fine Gael)
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It is up to each county manager to determine that.
Alan Dillon (Mayo, Fine Gael)
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Is it done on a national basis?
Alan Dillon (Mayo, Fine Gael)
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We will need to revisit that issue.
Brian Stanley (Laois-Offaly, Sinn Fein)
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May we revert to the mica and pyrite issues? It seems legislation and regulations are in place and there is a timeframe for re-establishing the building regulation authority. Why is it 2024?
Brian Stanley (Laois-Offaly, Sinn Fein)
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It seems like a long time.
Mr. Graham Doyle:
With regards to this regulator we need to look at the evidence, design the structures, see what legislation is required and scope out the role of the regulator. A considerable body of work must be done in order to get it right. We must do it as quickly as possible, but that is what needs to be done.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Ó Coigligh outlined some of the legislation. SI 288 of 1949 is Standard Specification (Solid Concrete Building Blocks Made with Natural Aggregate) Order. I will not read it all but the relevant part states:
The sand, i.e. fine aggregate passing a 3/16 in. test sieve, shall not contain more than 10 per cent. passing No. 100 test sieve.
(a) Harmful Impurities.
The aggregate shall not contain harmful material in sufficient quantity to affect adversely the strength or durability of the concrete. Mica, shale or similar laminated materials, or soft particles, shall not be present in such a form or in such quantity as to affect adversely the concrete.
When tested in accordance with the method given in Appendix A the quantity of harmful impurities passing a No. 200 test sieve shall not exceed (i) in the case of fine aggregate 3 per cent. for natural sand and 5 per cent. for crushed stone, and (ii) in the case of coarse aggregate 1 per cent.
We know "coarse" means there is a lot of stone in it.
That is from 1949. It was brought to my attention this week. We have legislation since 1949 and here we are in the year of our Lord 2023 and it seems as though no one was watching this. Who tests the sand? We have been lucky where I live, except for north Offaly. Edenderry was affected by pyrite but so far - touch wood - we have good companies providing good quality products in that part of the midlands. Where are the tests done and who is doing them? We could paper Leinster House with regulations, statutory instruments and legislation but who actually does this? Does someone go to the concrete plant unannounced every now and then and take a sample?
Mr. Feargal ? Coigligh:
A number of different processes are involved in ensuring the standards. For example, the NSAI gives certification based on documentation provided by companies that get independent geologists and testing laboratories to provide certified evidence. A huge evidential trail is required to get a product-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Who looks for that? Who is it produced to?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Ó Coigligh will appreciate that the word "trail" is not appropriate. This should not be a trail. It should be a straight line.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I worked in construction where 20 lorry loads were being poured in a couple of hours. Every few hours a quality control person who was on site took a sample. That was in a different jurisdiction where the local authority and relevant government departments had to have sight of those samples. Problems start at source. The source is the concrete plant. We know what has happened. There is no need to rehash all of that. We ended up with mica, pyrite and all kinds of problems because of it. I have quoted the 1949 legislation. Who will enforce it? This is the solution.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes, they do.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We obviously do not have an effective one.
Mr. Feargal ? Coigligh:
We have an effective system. We did not have an effective system in place when these problems arose in the 1990s and 2000s. Many measures have been put in place as I have explained. The national building control office has a specific programme of inspection and inquiries. The Department funds and works with GSI for dirt testing.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Even the smaller local authorities have many people with a science background, including engineers. Would it not be simple for random tests to be done or for companies to supply a sample?
There are not that many in a given local authority area in order to display a sample. As I said, think of whoever is here in 25 years' time. We now sit here with a bill for €2.5 billion, that is, for 2,500 million euro, because of the hands-off approach. Surely we can stop creating these problems and allowing these problems to arise. We have the legislation and the knowledge. We have more knowledge than they had in 1949. Think of what this country was like in 1949 after the Second World War, recession and so on. In 1949 they were able to solve this. Do you know why they were able to do that? It was because they had a clerk of works and local authorities that kept an eye on things. That was despite the fact that the country was very poor. Here we are now and we cannot seem to do because everything goes in a roundabout way through trails. There cannot be a trail. This has to be straightforward.
Mr. Feargal ? Coigligh:
I believe there is a good system in place to provide assurances that material from quarries and concrete products are being put on the market safely. We had an audit that the Minister requested in regard to issues that arose in County Donegal again recently. That made some recommendations about the need for further resources to help local authorities to carry out their functions. The audit showed the extent of work that went in, the extent of compliance which showed where there were gaps in the paperwork, and on the back of that the Government has decided to build on the good work that has been done and the good controls that are now in place to bolster that by putting in place a national regulator.
Brian Stanley (Laois-Offaly, Sinn Fein)
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That is fine. That will be an office which will be staffed. What I am saying is that out on the ground where it matters, there is a concrete plant and a construction site. The concrete is made in the concrete plant and goes to the construction site. I am saying this by way of being helpful. I saw it in operation. There has to be a simple way of dealing with this. There have to be tests at the concrete plant on a random, weekly or monthly basis.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes but when you remove it from the coalface-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Employed by whom?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Let us be honest about it, they do not have a laboratory on every construction site. That is the problem. If someone is building a one-off he or she will not have that. The product has to be tested at the concrete plant. You have lost it-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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At the concrete plant?
Brian Stanley (Laois-Offaly, Sinn Fein)
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What I am saying is there have to be samples and the local authority is probably best because it is the closest to it and has engineers. I am saying that the Department must look at this. As I said to Mr. Doyle, we are in a process now where we are setting up this regulatory authority. I am trying to suggest a way whereby we ensure that we do not keep making these problems for ourselves and creating huge bills for the taxpayer. I ask the Department to look at seeing whether there is a way of simplifying that. It has to be done at the concrete plant and what is called the batching plant. It has to be scrutinised by an official with an engineering and scientific background who can state there is no mica in it or that the components in the batch are correct. There is no other way. You have to stop creating this problem at source. When it gets to the site it is too late. It is all over. A load of concrete arrives and rain, hail or snow, that load of concrete has to be poured. If the sky opens it has to be poured. That is the reality. That is how it works on any building site.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am not an expert in construction but can you see the logic in what I am saying?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Will the officials come back to us on how this is going to be dealt with at source? Will they re-examine this issue of the regulatory body? It is grand to have all these bodies but we have more quangos than would fill the Phoenix Park. We need a very straight line in regard to the tests being taken at the concrete plant, particularly at the batching plant so that it can officially be stood over and somebody in a public body somewhere can say "Yes" or "No" and if it is not up to standard that they can intervene and stop it. Otherwise, the wheel keeps going around.
Brian Stanley (Laois-Offaly, Sinn Fein)
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They need to be short-circuited too. That is all I say to you.
Alan Dillon (Mayo, Fine Gael)
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One area I brought up previously with the Department at the Committee of Public Accounts is the rural water programme. It is accounted for under the subheading B4 with an expenditure of €48 million in 2021 against an estimated €56.5 million. In regard to the commencement of the review for the 2019 to 2021 multi-annual water programme, has that commenced yet? How advanced is it at present?
Mr. Graham Doyle:
The review is going on at the moment. Having multi-annual funding gives some confidence into the sector and has allowed these plants and the issues around them to be addressed over a period by the local authorities, so it is given that structure. I have a note on it here, I was talking to colleagues in that area last week so my understanding is that the review is now starting.
Alan Dillon (Mayo, Fine Gael)
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In regard to the rural water programme, it is of critical importance. In my constituency more than 500 households in north Mayo, in Porturlin, Portacloy, Srahataggle and Carrowteige, do not actually have a domestic running water supply. The urgency and importance of measures for consideration in the future multi-annual rural water programme from 2022 to 2025 needs to be expedited. Currently it has not been published. What is the reason for this delay?
Mr. Graham Doyle:
I am not sure of the reason for the delay but I absolutely take the point in regard to Mayo. It has the highest proportion, only Galway rivals it in any way, in regard to the number of private group water schemes. In regard to the 2019 to 2022 programme, I believe about 18% of the total funding has been paid through Mayo County Council. The importance in that part of the country is recognised. We have significantly increased the funding overall on this scheme over the past number of years.
Alan Dillon (Mayo, Fine Gael)
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There was an underspend of €8.4 million in 2021 in this regard. What is the commitment in the Department for the future programme?
Alan Dillon (Mayo, Fine Gael)
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In regard to the next programme, the 2022 to 2025 programme, what is the Department committing to the actual delivery of the rural water programme?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Can I suggest that in this particular local issue, it might be helpful if one of the officials come back to the Deputy on this.
Alan Dillon (Mayo, Fine Gael)
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The real issue is that the local authority still has not received a request for a submission. We are now in 2023. It is causing huge concern among communities in north Mayo.
Mr. Graham Doyle:
If there is an issue with that, I will write. The answer to that is the end of quarter 1. In 2021, the spend in this area on current and capital was €48 million. It was €44 million the previous year. Our budget for 2023 is just under €68 million. We are providing the funding. We are willing to work with local authorities on this. We absolutely recognise the importance of it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank the witnesses and the staff of the Department of Housing, Local Government and Heritage for the work they have done preparing for today's meeting.
I thank the Department for its work as well and I thank the Comptroller and Auditor General, Mr. Seamus McCarthy, and Ms O'Connor for attending. I also thank Ms Costello, from the Department of Public Expenditure and Reform, for coming along and providing information to us.
The Department of Housing, Local Government and Heritage is a big Department with big issues and challenges. We can see and understand that. Regarding the themes, there are a number of issues to come back to us on, including the breakdown of the costs in respect of the PPPs, or the €633,000 per unit. If the delegates are here again, could they discuss further progress on the generic house designs, in addition to the unencumbered units of AHBs when then they come up with the term of the loan? I know a principal officer is working on that but could the committee be kept briefed on it in general? The regulatory authority is another issue. There are several other issues. The delegates will see them from the transcript. I have just mentioned four of the big ones. The big themes coming up today, along with a range of others, are speed of delivery and value for money. We recognise that there are many challenges. We obviously wish the Department well with them. Hopefully, we can move things along and speed things up.
Is it agreed that the clerk will seek follow-up information and carry out any agreed actions? Agreed. Is it agreed that we note and publish the opening statements and briefings provided for today's meeting? Agreed.