Mr. Graham Doyle:

I am pleased to be here this morning as Accounting Officer to assist the committee in this resumed examination of the 2021 Appropriation Account and the relevant chapter. The Chair has introduced my colleagues. We look forward to addressing questions this morning, following on from our attendance earlier this year on 26 January. I have provided some advance briefing for the meeting along with a copy of the opening statement. I will briefly mention some areas notified as being of interest as the committee resumes its work today.

At the outset, I would like to address the topic of underspend. Over the last four years, while capital funding has in some instances been carried forward to be spent in the following year, a total of €382 million from Vote 34 has been surrendered to the Exchequer. The most significant portion of that arose in 2022, with €246 million surrendered across the Vote. The surrendered amount cumulatively represents 1.8% of the total funds allocated to the Vote. The return of funds to the Exchequer occurs when all other actions to complete programmes and maximise delivery have been exhausted, despite best efforts.

Capital allocations are assigned on an annual basis under the Estimates process, but national development plan, NDP, ceilings are agreed on a multi-annual basis. The ceiling for 2021 to 2025 was agreed under the NDP review in 2021. This creates some challenges in terms of large-scale capital delivery, which is not scheduled in "one calendar year" format and crosses multiple reporting periods. The most significant of these is housing.

Covid-19 and, subsequently, in 2022, the Russian invasion of Ukraine, which led to significant interruption to infrastructure delivery, are a critical backdrop to any review of output against expected delivery over recent years. Since 2020, three construction closures, followed by significant operational challenges in terms of how sites operated in a pandemic, impacted and delayed delivery. In terms of the life cycle of a project, it does not just impact projects being built onsite. Disruptions to onsite work, uncertainty as to costs, supply chain difficulties and interest rate changes affected forward planning of projects. This meant new sites were not initiated, as well as resulting in delays in completing sites. The catch-up endeavour has been immense.

As Accounting Officer, I have to ensure that projects to which capital funds have been committed through formal approval processes have that commitment reflected in our public finances for the full duration of the project. If delays beyond the control of the body overseeing the delivery arise, as happened in the case of Covid and Ukraine war impacts, we must ensure that the funds remain available even if the parameters of the Estimates process from January to December cannot align. That is where capital carryover is critical.

The flexibility to vire capital between subheads, either with the agreement of the Minister for Public Expenditure, National Development Plan Delivery and Reform, or the Oireachtas in the case of a technical Supplementary Estimate, is also a very important element of financial management. It facilitates the pivoting of expenditure towards priority areas when an underspend becomes apparent.

In the case of social housing as the key example, it is not being delivered directly through a single contractor. The construction status report for quarter 4 of 2022 showed that over 19,000 new-build social homes are under construction or at various stages of design and procurement, and are being led via the 31 local authorities. Delivery dates will inevitably change over the course of a project and impact the related expenditure. Since 2004, the availability of the legislative-backed capital carryover facility enables this and other capital spending Departments to manage this movement across the major capital programmes while preserving the carried forward amount as a first call on the Vote in the following year.

Underspend is often not certain until close to the year end, because all partners were absolutely committed to trying to maximise delivery and expenditure within the calendar year. Changing course late in the year is not always possible or even permissible under public financial procedures. Capital projects have life cycles and decision gates. That means evaluation, assessment and confidence in actual delivery in the narrow window between when an underspend might become apparent and the year end, as well as following public financial procedures in conjunction with colleagues in the Department of Public Expenditure, National Development Plan Delivery and Reform.

In relation to housing delivery, notwithstanding the challenges experienced over 2021 and 2022, last year saw the delivery of 7,433 new-build social homes. Funding was initially provided to allow for a higher target of 9,000 new-build homes, with some underspend resulting from the gap to target. This highlights the need to continue to focus on improving new-build delivery with both the local authority and approved housing body sectors. Overall, additions to the social housing stock, including social housing acquisitions and leasing programmes, were just over 10,200 social homes for households on the social housing waiting lists in 2022. Last year was the first year of delivery of affordable homes in a generation. From a standing start, almost 1,800 affordable homes were brought about by key delivery partners, which are local authorities, approved housing bodies, AHBs, and the Land Development Agency, LDA, and through the first home scheme. While delivery of affordable purchase and for cost-rental purposes was below our target, it represents a significant footprint, is up from effectively zero in the previous year, and it follows the establishment of the affordable purchase schemes and cost rental. We know that delivery must be scaled up where the need is most acute and we are confident the key, large mixed-tenure schemes in Dublin, for example, are now progressing, with funding applications under assessment or approved for O'Devaney Gardens, Oscar Traynor Road, Emmet Road and Churchfields in Mulhuddart, Fingal.

The first home scheme is also making a difference. More than 3,500 potential buyers have registered interest in the scheme, and that figure is increasing every week. A total of 82% of approvals have been for buyers in areas where affordability challenges are most acute, namely, Dublin, Cork, Kildare, Meath and Wicklow. I think there are 24 counties represented in the scheme. Other measures have also been helping people to buy their homes. The help-to-buy tax rebate has been extended by the Minister for Finance until 2024, and the local authority home loan has been enhanced.

Cost-rental housing is a key tool to make rents more affordable and renting more secure. State support is being targeted to have an immediate impact by achieving cost-covering rents which are at least 25% below comparable local market rents. However, ongoing viability challenges remain within the sector given significant increases in construction costs, higher interest rates for borrowing and supply chain issues, which have combined to have very real impacts on the cost of housing provision and delivery. Notwithstanding these delivery challenges, the past 12 months have represented the first year of a very ambitious programme of delivery of affordable housing. The pipeline of affordable projects will continue to be developed by local authorities, by AHBs, and by the LDA. To improve the cost-rental pipeline further, the Government has recently approved the development of a new cost-rental viability measure which will activate development of sites and bring forward more cost-rental homes in return. This measure is in development at the moment, and I expect that proposals will go to Government over the next few months.

I will mention the National Parks and Wildlife Service, which is part of the heritage side of the Department's remit, as it was flagged as an area of interest. The NPWS is the State body charged with the protection of nature. It is an executive agency within the Department and manages six national parks and more than 80 nature reserves encompassing approximately 85,000 ha, an area greater than the size of County Louth. It also has responsibility for 600 special areas of conservation. The NPWS has 470 staff with further growth in this number planned in 2023 and 2024. The NPWS will shortly publish its strategic plan for 2023 to 2025, which sets out its mission, values and key strategic goals. There has been a significant increase in funding for the NPWS in recent years, with an 83% increase in NPWS programme funding since 2020, bringing it to €57 million, including more money for farmers delivering results for nature, investment to enrich our national parks and nature reserves by tackling invasive species and improving the visitor experience, further roll-out of the conservation measures programme to improve the status of Ireland's protected habitats, and a doubling of the local biodiversity action fund to support community-level action for nature. The increase in funding is important in providing for the development of the National Parks and Wildlife Service and should be seen in the context of the reduction in the NPWS budget from €46 million in 2008 to €14 million in 2011. This much lower budget allocation persisted until 2020 with restoration to 2008 levels only achieved in 2021-2022.

I again 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 local authorities, NGO and AHB sectors, continue to be focused on achieving the best results for the public. I look forward to engaging with the committee this morning.