Oireachtas Joint and Select Committees
Thursday, 1 June 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 6: Central Government Funding of Local Authorities
9:30 am
Brian Stanley (Laois-Offaly, Sinn Fein)
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Apologies have been received from Deputy Verona Murphy.
I remind all those in attendance to ensure their mobile phones are switched off or on silent mode. Before we start, I wish to explain some limitations to parliamentary privilege, and the practice of the Houses as regards reference witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. As they are within the precincts of Leinster House, witnesses are protected by absolute privilege in respect of the presentation they make to the committee. This means that witnesses 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 does not happen. 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 inquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policies. Members are also reminded of the longstanding 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.
The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness to the committee. He is accompanied this morning by Ms Maria Reck, audit manager at the Office of the Comptroller and Auditor General. This morning, we will engage with the Department of Housing, Local Government and Heritage to examine the following: Appropriation Accounts 2021; Vote 34 - Housing, Local Government and Heritage; the Local Government Fund Account 2021; and the 2021 Report on the Accounts of the Public Services, Chapter 6, Central Government Funding of Local Authorities. We are joined from the Department of Housing, Local Government and Heritage by: Mr. Graham Doyle, Secretary General, Ms Aine Stapleton, assistant secretary, social housing delivery; Ms Caroline Timmons, acting assistant secretary, housing affordability, inclusion and homelessness; Mr. Paul Hogan, acting assistant secretary, planning; Mr. Niall Ó Donnchú, assistant secretary, heritage division; and Ms Sinead O'Gorman, principal officer, local government finance unit; and from the Department of Public Expenditure, National Development Plan Delivery and Reform by Ms Jenny Connors, principal officer.
The Comptroller and Auditor General, Mr. McCarthy, previously introduced the Department's Appropriation Accounts 2021, the Local Government Fund Account 2021 and Chapter 6 of the Report on the Accounts of the Public Services 2021. That was at our meeting on 26 January. Before proceeding, I ask the Comptroller and Auditor General if he wishes to add anything.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I welcome Mr. Doyle and invite him to make his opening statement.
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.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Mr. Doyle.
Verona Murphy (Wexford, Independent)
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I welcome Mr. Doyle. It does not seem that long since he was here in January. His opening statement is not that much different from what we heard before. All of the same issues remain: interest rates going up, inflation not falling quickly enough, and access to land. All of these issues are outside Mr. Doyle's control and mine. What is in his control is the viability issue. As he outlined in his opening statement, there are ongoing issues with viability. Will he tell the committee what his Department has done since his last engagement to address the viability issue?
Mr. Graham Doyle:
In terms of the factors that are outside of our control, as the Deputy points out, we try to respond to those as best we can by making alterations to schemes. We changed, for example, the cost-rental approach, in particular around the cost-rental equity loan. We have made a number of changes to flexibilities that local authorities have in terms of responding to cost inflation in conjunction with the Department of Public Expenditure, National Development Plan Delivery and Reform.
I will give some examples of the adjustments that we have tried to make. In terms of viability, we continue to roll out certain schemes that seek to deal with viability challenges-----
Verona Murphy (Wexford, Independent)
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Such as?
Mr. Graham Doyle:
Such as Croí Cónaithe, for example. We are also trying to bring in a new cost-rental viability measure. Cost rental started out very well in terms of the early projects, but interest rate challenges in particular have affected the financial modelling of AHBs and other providers of cost rental and they have struggled to make it work in the context of a much higher interest rate environment.
Verona Murphy (Wexford, Independent)
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If a model is attractive, it is still attractive even if interest rates go up. Why is viability an issue?
Verona Murphy (Wexford, Independent)
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Why is viability the issue with these projects?
Verona Murphy (Wexford, Independent)
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Why? This is what confuses me. The reality is that Mr. Doyle has now discussed for three minutes everything that is outside of his control and I asked him-----
Verona Murphy (Wexford, Independent)
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The biggest issue with viability is densities, and Mr. Doyle has been told time and time again, not least by me but also by every local authority and every AHB, that they cannot make the cost-rental model work because of the density levels that are imposed through planning policy. Has Mr. Doyle changed the planning policy? Have the densities been lowered to where they would be viable?
Verona Murphy (Wexford, Independent)
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Compact settlements? Mr. Doyle will have heard me request lower densities for three years, but what did he do? Who drew up those guidelines?
Verona Murphy (Wexford, Independent)
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Who is "we"?
Verona Murphy (Wexford, Independent)
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The Department decided to increase densities and spend €6 billion of taxpayers' money. Rather than address the issue and lower densities, Mr. Doyle has decided to throw €6 billion of taxpayers' money at building apartments that are not commencing because they are not viable. Will Mr. Doyle tell me where the cost-benefit analysis is from his Department that justifies that?
Verona Murphy (Wexford, Independent)
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Whatever Mr. Doyle is referring to, those changes are only finished public consultation and they are crap.
Verona Murphy (Wexford, Independent)
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It is as simple as that. The Department will probably find that is what the public consultation says.
What I am asking Mr. Doyle is, where is the cost-benefit analysis that supports the commencement that he says will happen of 6,000 apartments that will cost the taxpayer €6 billion?
Verona Murphy (Wexford, Independent)
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Right, it is very simple. I cannot afford to let Mr. Doyle run down the clock.
Verona Murphy (Wexford, Independent)
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Will Mr. Doyle show the committee the cost-benefit analysis? Will he submit it?
Verona Murphy (Wexford, Independent)
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On 25 April, a scheme was announced where the Department is to spend three quarters of a billion euro it believes will commence the building of 6,000 apartments where there are grants of planning but they have not commenced. I want to see the cost-benefit analysis.
Let me give Mr. Doyle my cost-benefit analysis. If the Department was to do what I have been saying for three years, as well as everybody who understands just how bad our planning policy is and where it is causing the hiatus in building, the cost-benefit analysis on reducing densities from 50 dwellings per hectare for which the Department is insisting, not only in Dublin and but in towns around the country, will see the Department having to purchase 264 acres on which to develop 6,000 apartments at a cost in most cases of €20 million per acre and upwards. That comes to €6 billion. Should the Department lower the densities to 30 dwellings per hectare and go around the country and purchase development land, in Wexford, for example, at a cost of approximately €200,000 an acre, for €50 million the Department could probably service the required extra. It would take 440 acres to build 6,000 houses and the Department could still do it for little or nothing in comparison with the taxpayers' money the Department will spend.
I cannot see where we are looking for value for money here. I want to see the cost-benefit analysis that supports the proposal. It was announced in April. Where is the detail? It is not available. It is not available from the LDA. It is not on a Government website.
Verona Murphy (Wexford, Independent)
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The Department has announced it is spending €6 billion and it has not developed the scheme.
Verona Murphy (Wexford, Independent)
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I am.
Verona Murphy (Wexford, Independent)
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Who came up with the idea?
Verona Murphy (Wexford, Independent)
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Cost rental will not be delivered by this scheme. Mr. Doyle is not listening to what I am telling him. Is Mr. Doyle telling me that we have to spend €6 billion of the taxpayers' money to make cost rental work?
Verona Murphy (Wexford, Independent)
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That is what Mr. Doyle just said, that this is specifically around cost rental.
Verona Murphy (Wexford, Independent)
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By the time the Department commences 6,000 apartments, it will cost €6 billion. The Department is talking about putting €750 million into cost rental. The Department has already said it will see the commencement of 6,000 apartments. That is what it costs. If a person is developing apartments around the towns in the country or in Dublin, Cork, Limerick and Galway, the apartments will cost at least €100,000 more than housing. That is where the €6 billion comes from: 6,000 apartments at €100,000 extra over housing. Mr. Doyle looks confused.
Verona Murphy (Wexford, Independent)
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That is only for the extra €100,000.
Verona Murphy (Wexford, Independent)
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I am talking about building on top of that.
Verona Murphy (Wexford, Independent)
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I am saying for €50 million extra we could build three-bedroom houses around the country. Does Mr. Doyle get that?
Verona Murphy (Wexford, Independent)
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But you cannot. Sorry, Mr. Doyle, you are wrong. We cannot choose because the planning policy dictates-----
Verona Murphy (Wexford, Independent)
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No, you did not mean that. You said you can make a choice.
Verona Murphy (Wexford, Independent)
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You said you can choose.
Verona Murphy (Wexford, Independent)
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Okay. Rather than get bogged down, what I and many others have been stating for three years is that the planning policy is the issue. You can go away from the war in Ukraine, interest rates and construction inflation. Nothing has changed, and nothing has changed since Mr. Doyle was here last year, except that the Department most certainly will not meet its targets this year, and if the Department does, it will be because it is wasting the taxpayers' money. I am asking what consideration the Department has given to changing the planning policy and reducing the densities to what not only will make them viable but affordable and that is in the realm around the country of fewer than 30 dwellings per hectare.
Verona Murphy (Wexford, Independent)
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People want front and back gardens. Own-door is not the important issue, if you were to listen to what anybody who is building or who is responsible for building has said. How many grants of planning have we for own-door that have not commenced?
Verona Murphy (Wexford, Independent)
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By whom?
Verona Murphy (Wexford, Independent)
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Glenveagh is who the Minister told me.
Verona Murphy (Wexford, Independent)
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The funny thing is, I am speaking to all the same people. Nobody has advocated the Department's guidelines and what it has produced, which astounded me. I was promised by the Minister that the problem would be rectified. When I received the document, I had to vote no confidence because it is unbelievable we are in a position where we are flush with money and cannot spend it. Now there is the ideology of subsidy. What makes no sense from the perspective of affordability and viability in any realm is that the Department is to subsidise. We will have to continue to subsidise it. Where is the value for money when it could be simply corrected by reducing the densities?
The Department is moving on with a policy the UK moved away from ten years ago. They stopped building compact development. Has Mr. Doyle done any research at all? They moved completely away from compact, not least because of the antisocial issues that arose when they were completed.
Verona Murphy (Wexford, Independent)
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How many apartments are in the Croí Cónaithe scheme?
Verona Murphy (Wexford, Independent)
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Where?
Verona Murphy (Wexford, Independent)
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This is the point. How much will it cost?
Verona Murphy (Wexford, Independent)
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A number of hundreds of thousands. Are you-----
Verona Murphy (Wexford, Independent)
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You do not have a clue, do you? You really do not have a clue, Mr. Doyle.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Deputy, treat the witness with respect.
Verona Murphy (Wexford, Independent)
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I am treating him with respect. He has not made an answer. To say hundreds of thousands and then go to millions, he really does not know. Can he give me-----
Verona Murphy (Wexford, Independent)
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Fine. Can Mr. Doyle give me one Croí Cónaithe scheme of apartments that he knows of anywhere in the country?
Verona Murphy (Wexford, Independent)
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Where are they? Mr. Doyle will have that much information. What part of the country are they in?
Verona Murphy (Wexford, Independent)
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How many apartments are involved?
Verona Murphy (Wexford, Independent)
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The Department made an announcement on 25 April and I have asked Mr. Doyle for the content. Mr. Doyle is telling me the Minister told him to develop the policy. Is it correct that he asked the Department to develop the content of what they announced on 25 April?
Verona Murphy (Wexford, Independent)
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Where are we with that?
Verona Murphy (Wexford, Independent)
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The Government is three years in office now and Mr. Doyle comes in here and he makes his statement. In every statement, the Department states that viability is an ongoing issue but yet we do not have a planning policy which addresses viability in any shape or form.
We have not one planning policy. If we do, I have missed it. Mr. Doyle might tell me where it is.
Verona Murphy (Wexford, Independent)
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Has viability been made a consideration in planning policy?
Verona Murphy (Wexford, Independent)
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The question I asked is whether viability been made a consideration in planning policy. Viability is the biggest issue, is it not? Mr. Doyle said it.
Verona Murphy (Wexford, Independent)
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Has it been made a condition or a consideration?
Verona Murphy (Wexford, Independent)
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I have read the guidelines, and nowhere in them is viability addressed or is it stated that it has become part of the consideration of planning policy. Would Mr. Doyle agree with that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Deputy is running over time.
Verona Murphy (Wexford, Independent)
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Has viability been made a consideration in the context of planning policy? If so, where is that dealt with?
Verona Murphy (Wexford, Independent)
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I thank Mr. Doyle. I think he will find that he will be back here next year having not met his targets.
Alan Dillon (Mayo, Fine Gael)
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I welcome our guests and thank them very much for being here. First, I want to focus on affordable housing. Mr. Dole referred to the delivery of nearly 1,800 affordable homes in the past year. He also noted that the delivery of affordable housing was below target. What was last year's target for affordable homes, and what were the main reasons for the shortfall?
Mr. Graham Doyle:
In the context of the various affordable schemes announced in Housing for All, the target was 4,000 units. We have a number of approaches to affordable. There is the affordable purchase scheme, which can be delivered by the local authorities and the LDA. There is cost rental, which can be delivered by local authorities, the LDA and the AHBs, and then there is the first home shared equity scheme. There are three strands to affordability.
Alan Dillon (Mayo, Fine Gael)
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Can Mr. Doyle provide breakdown in respect of the 1,800 affordable homes delivered last year, the affordable purchase scheme and cost-rental homes?
Alan Dillon (Mayo, Fine Gael)
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How is the Department tracking against the target of 54,000 affordable homes to be delivered by 2030?
Mr. Graham Doyle:
We are trying to build a pipeline across the various streams. It was very much a standing start. Very high and ambitious targets were set for the early years, so we are trying to build a pipeline of delivery across the various streams. First home seems to be going very well now. Affordable purchase, and bringing the local authorities back into that space after many years, they are trying to build that pipeline. Cost rental started very well, and it was very well received where projects were delivered. As I said previously, it has become more challenging because of the very high increase in build costs and in interest rates, which affect the modelling around how these schemes work. Ultimately, we want to try to get 25% below market rates. That is the challenge. One can deliver cost rental, but it depends on how one defines it. We try and define it in terms of affordability, and trying to achieve a rent of 25% below the market rate.
Alan Dillon (Mayo, Fine Gael)
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I thank Mr. Doyle. He mentioned the local authority affordable purchase scheme. Maybe I will focus on that. How many local authorities have been excluded from the national affordable housing five-year delivery targets or have all local authorities set targets regarding the delivery of affordable housing schemes?
Alan Dillon (Mayo, Fine Gael)
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For how many?
Alan Dillon (Mayo, Fine Gael)
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On the remaining local authorities which are outside, can the Department provide a reason why these are outside?
Mr. Graham Doyle:
The reason for that is the prevailing prices in those counties mean that there is less of a gap in terms of the affordability challenge. People are finding ways to finance those properties at the level at which they are selling in those local authority areas. It is the 18 with the particular affordability challenges which have been set targets to try to deliver. However, if others have schemes to bring forward for approval by the Department in funding, they can do that.
Alan Dillon (Mayo, Fine Gael)
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I will take my own local authority as the example. It certainly is in a perplexing predicament, where there are no targets set for affordable housing, but there are affordability issues. Numerous exercises have carried out in respect of this. The original assessment was based on whether the second-hand homes for sale within a local authority were at a level deemed to be below the 5% threshold. However, when they looked at an external affordability exercise completed by KPMG, the Department then started to approve local authority affordable schemes.
I am trying to understand. There is an issue, but the Department has excluded 18 local authorities. I am not sure of the actual number. I am trying to understand why this happened. Does the Department need to go back to those local authorities about setting affordable housing targets? There is an affordability issue in these counties, and if we are leaving it up to the local authorities to deliver these schemes, they will not. We can see the evidence of that, unless they are being pushed to do it.
I am asking, what is the Department doing on this? It has set really high targets regarding the 55,000 affordable houses it wants to deliver by 2030. However, when one considers at the pace at which it is going - 1,800 delivered in 2022 - can I get an understanding of the target for 2023, and how it is going to achieve that, especially when some local authorities are not engaged to deliver affordable housing?
Ms Caroline Timmons:
The point the Deputy is making is actually quite fair. This has come up a number of times, and we have dealt with it over the past year. As he is aware, Mayo County Council led the way by pointing out that Westport had an affordability challenge, and it wanted to see if it could access the affordable housing fund. I am very pleased to say that we have approved that scheme in Westport, but it brought forward this idea around the other counties which want to access the fund, and how we deal with that. There are localised affordability challenges which did not, maybe, come out through the analysis and demand assessment that were carried out previously. Local authorities are very well placed-----
Alan Dillon (Mayo, Fine Gael)
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Does Ms Timmons agree now that this was a flawed system with regard to the 5% threshold?
Ms Caroline Timmons:
It did what it was supposed to do, which was to indicate where the highest level of affordability challenges were, and where one might target the funding. However, I do not think it should be a barrier to anyone else accessing the funding if they can find localised affordability challenges that would not have been part of the national statistics. We take that into account more. We have produced a circular for all of the local authorities saying that if they wish to come in, this is the type of analysis-----
Alan Dillon (Mayo, Fine Gael)
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Is the Department going to revise the targets? The Department needs to set targets like this-----
Alan Dillon (Mayo, Fine Gael)
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The Department has set targets for local authority social housing, so why will it not set targets for affordable housing?
Alan Dillon (Mayo, Fine Gael)
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When will the Department do that?
Ms Caroline Timmons:
-----a reassessment of the housing need and demand assessment with the new census material the will come later in the year. That will provide us with an overview of the affordability targets. The housing need and demand assessment will be reviewed later in the year. Once that is available to us and once the Economic and Social Research Institute completes its analysis, we will redo the housing need and demand assessment for the entire country. We will then look at any localised affordability challenges. Where local authorities point out specific localised affordability challenges, we consider them. We see what the evidence base looks like for us, and we will have a look at what targets should be set.
Alan Dillon (Mayo, Fine Gael)
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Take my county as an example.
The Department has approved an affordable housing scheme in Westport. It has received a submission for Castlebar regarding an affordability issue; I hope that gets approval. Again, we see that the local authority needs to be encouraged to set ambitious targets to deliver affordable housing schemes.
I will move on to the ongoing viability challenges Deputy Verona Murphy talked about as regards increased construction costs, higher interest rates and supply chain issues. I will ask Mr. Doyle about the current state of serviced sites under the Department's remit. How many sites are there at present? What is the overall capacity for potential housing units on serviced sites? What proportion of the Department's capital budget is being allocated to the development of serviced sites? The easiest solution to delivering affordable housing seems to be through serviced sites.
Mr. Graham Doyle:
On land available to local authorities, for example, around social schemes, there will be a pinch on that land over the coming years. There is enough land for the next number of years but we are now trying to fund the purchase of additional land. We also have schemes, as the Deputy is probably aware-----
Alan Dillon (Mayo, Fine Gael)
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How much is being allocated this year and next year for serviced sites?
Alan Dillon (Mayo, Fine Gael)
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How much of that has been committed to date?
Paul McAuliffe (Dublin North West, Fianna Fail)
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I thank all our guests for being with us. It often confuses me when I am at this committee because I feel I am at the Oireachtas housing committee, as they have covered much territory together.
On the opening statement, the Comptroller and Auditor General's 2019 annual report referenced the measurement of performance for Exchequer spending on social housing. It is interesting that we are in a fundamentally different place as regards the Government, public spending, policy instruments and Department activity than we were when the 2019 report was written. It is a Government line but it is the truth: we are building more public homes than we ever have. Those public homes are available to more people because we have increased the income limits and we also have cost rental and affordable purchase, which just did not exist a year and ten months ago. In fact, that is not true. Affordable purchase did exist ten years ago but was abolished by the two previous governments, which failed to reintroduce it. I do not accept a narrative that nothing has changed because the facts do not stand up to that. That is not to say we are making the progress I want us to make. I will return to that in a moment.
I will touch on the point Deputy Verona Murphy made around the issue of viability. It is a strange word that hides the fact that essentially because of the planning framework we have adopted, particularly for homes in the cities, structurally, it will almost be impossible for for-profit homes to ever be built again in places such as Dublin city. That is because, as a society, we have decided that apartments are one of the ways we can tackle commuting times and issues of density and so on in the city-----
Verona Murphy (Wexford, Independent)
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As a society and the planning regulator.
Paul McAuliffe (Dublin North West, Fianna Fail)
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-----and the difficulty with that is it massively increases the cost of housing units. For both private operators and local authorities, we are now subsidising housing units up to the scale of €100,000 or €150,000 per unit. In the city, even with those numbers, we are struggling to build units. Deputy Verona Murphy made a very good point. I said, "as a society", but she is right. I am not sure we have had that conversation about the shift towards apartments being very positive from a planning and environmental perspective, but it is having a massive societal impact on the cost per unit. In places such as the cities, you cannot go for the option of three-bedroom units because you will run out of space very quickly.
There is a broader point in other places that we need to consider. We need to consider how we will go forward as a city where, effectively, the opportunity to purchase a home will have to be subsidised by the State to the tune of €100,000 or €150,000 per unit. Even Ó Cualann, which was touted for a long time as being able to deliver not-for-profit housing, will now say that it is just not possible to deliver not-for-profit housing at affordable rates. We have to all start to accept that, essentially, the cost of building now exceeds the ability of anybody on any sort of level of income to be able to afford to purchase a home. That is a really startling fact. We have to come back to the conversation on the point raised by Deputy Murphy because the changes that we made on an environmental and planning level are having an impact. The question is whether that burden falls on society as a whole in terms of the taxpayer and so on, or on the individual who has to purchase that home.
The other side of it is we never get into this issue of viability when we talk about social housing. For people below the €44,000 limit, or €49,000 now, we never talk about whether it is viable to build those homes. We just build them because we know people need to live somewhere and it is our responsibility to house them. Unfortunately, because of the cost of building we will now have to ask that question for a much wider range. I ask the Department to look specifically at the cost-benefit analysis that is applied to some of the affordable housing units. In some cases, the Department is declining applications for affordable homes because homes are for sale on the open market for less than the cost of construction. The answer to that is not to not build those affordable homes because we know we need to increase the supply. The Finglas West-Kildonan site is one example. We are struggling to agree an affordable housing scheme at that site with the Department because there are homes for sale across the road for less than the cost of construction. We need both types of homes. We do not just need to point to the other home across the road and say it is cheaper so people should buy that. We need both types of homes because we have more people and a higher population and so on.
I spent more time talking about this than I expected, but Deputy Murphy made a very important point on the cost of our planning and environmental decisions. That is falling on individuals but it is also falling on the taxpayer. The corollary to that is the Department needs to examine how it is applying the cost-benefit analysis for applications for affordable units that are coming in from local authorities. If we accept we will always have to subsidise homes, we will always be in the situation where we will not build affordable purchase. That policy has to be looked at on a case-by-case basis. The Comptroller and Auditor General referenced that idea of the output and performance versus cost in the 2019 report.
I will talk about the tenant in situ scheme because it points to the same issue of the viability of the rental accommodation scheme, RAS. The tenant in situ scheme is a transformative scheme. People are coming to my constituency offices who are in the desperate situation of being given an eviction notice. Within a matter of weeks, not only have they gone from the point of being at risk of homelessness, they have actually secured their permanent council tenancy in a home they have lived in for many years. The tenant in situ scheme is a no-brainer. The question then is what the value for money is in us continuing to rent that home. The answer is there is no value for money in RAS or HAP. We have all known that for many years. The Department needs to consider a cost-benefit analysis of extending the tenant in situ scheme beyond those people facing immediate eviction. If a tenant is seven, eight, nine or ten years on a waiting list, the Department, the council and the State should be going to the landlord and saying it will buy that home from him or her at market rates, with a voluntary relationship and all of that. There is no benefit in us continuing to rent on HAP or RAS for those tenants. We could radically transform the security of those people. It would not add to the supply and does not solve the housing crisis, but it would radically transform the security of those tenants.
When we have unreliable or unsecured corporation tax coming in from a very small number of companies that we read about, we have to find ways of purchasing assets that do not have an inflationary impact, and that do not draw on further skills that would reduce supply and all of those issues. A capital programme of purchasing RAS and HAP properties from landlords who are willing to sell would be a very sound fiscal measure. It would also reduce our current spending over time because the cost of RAS or HAP would reduce. RAS and HAP were short-term necessary measures.
At a time when we have capital money we can spend, landlords who are exiting the market and tenants who want security, it makes no sense not to go beyond the current scheme. The problem is we will run out of the allocation for the tenants in situscheme probably in August or September. Do we have the funds to continue the scheme? Has consideration been given to expanding it beyond the eviction context?
Mr. Graham Doyle:
Yes. In terms of the figure of 1,500 units mentioned, people refer to it as a cap but it was not intended to be one. It was intended to be an attempt at measuring what the demand for this scheme might be. We have already flagged that we think we will definitely get to this number and that we will be trying to extend it if the properties are available.
Paul McAuliffe (Dublin North West, Fianna Fail)
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The question is whether the financial resources are in place to extend it.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Is that a discussion the Department has already had with the Department of Public Expenditure, National Development Plan Delivery and Reform?
Paul McAuliffe (Dublin North West, Fianna Fail)
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It is important those funds would not be drawn from the capital funding for the supply of new units.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Does the Department accept the value-for-money argument I made about HAP?
Mr. Graham Doyle:
Of course, we would much prefer to have new units or units owned by the State. In the case of some of these schemes, the Exchequer spending on a unit can be €6,000 or €8,000 per annum. If we were spending €300,000, €400,000 or whatever it might be upfront, a huge Exchequer investment would need to be made in terms of building up significant numbers of those.
Paul McAuliffe (Dublin North West, Fianna Fail)
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As a Government policy measure, does the Department accept that the State paying landlords for private rental properties through HAP represents poor value for money when we have capital assets we could spend on purchasing these units?
Paul McAuliffe (Dublin North West, Fianna Fail)
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I am talking about the existing homes with which the State has a relationship. Does the Department accept that if it were possible for us to purchase these homes now, and I ask this from a value-for-money perspective which is what we discuss in this committee, would it be better for the State to purchase those homes now rather than to continue to rent them?
Paul McAuliffe (Dublin North West, Fianna Fail)
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Absolutely, but if the Department accepts there is a value-for-money issue with a proposal that is costing it money from its current budget every year, the onus is on it to prepare a proposal which seeks the capital funding to purchase these units. I say this given we know these landlords are selling and there is an opportunity here for the State to purchase these units.
Mr. Graham Doyle:
Yes, but we have got to think through any policy in this regard. There are unintended consequences if we go down a particular route. We want to try to keep as many people in their homes as possible. We are trying to encourage landlords to stay in the market and trying to find ways to do that. I would not like to give a policy answer in the context of this meeting.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Okay. The Department might reflect on this point.
Catherine Murphy (Kildare North, Social Democrats)
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On that point, has a cost-benefit analysis been done and, if so, has leasing been included as well as HAP and RAS? Leasing is very current. I can see it in my area, where a whole estate may be leased. This is being done for 25 years, with a rent review every four years, at almost market rents, and then the house will be returned to the developer after it has been refurbished before the end of the lease. We then have no asset and nowhere for the tenant to go. For the life of me, I cannot figure out why this is being done. The Department is really only paying the mortgage for the developer in this case. Why would we be pursuing this course of action? Have cost-benefit analyses or value-for-money assessments been done on the schemes? The money going to HAP and RAS is coming out of the current account. It is difficult to figure out where the Department is going with this approach.
Catherine Murphy (Kildare North, Social Democrats)
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When a cost-benefit analysis is being done, have aspects I described been counted in? Have the costs of HAP, RAS and leasing been considered?
Mr. Graham Doyle:
Specifically on leasing, because the Deputy asked about that context a moment ago, there is a Government policy decision to phase out leasing over the next number of years. I think there are 200 units continuing to 2025 and after that there will be zero units on long-term leasing, namely, that 25-year type of project the Deputy talked about. The decision has already been taken in terms of ending that approach.
Catherine Murphy (Kildare North, Social Democrats)
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Mr. Doyle is clearly not going to answer the question in relation to cost-benefit analysis in respect of HAP and RAS
Mr. Graham Doyle:
We have done many analyses over many years on those schemes, as has the Department of Public Expenditure, National Development Plan Delivery and Reform. We have come from a situation where these schemes were implemented post-crisis and capital funding was not available. They were a way to provide roofs over people's heads for perhaps €8,000 per annum in a lot of cases.
Catherine Murphy (Kildare North, Social Democrats)
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I am sorry, Mr. Doyle, even if I had 20 minutes, it would not be enough time, so I am going to move on. I do not understand why the leasing was even permitted in the first place. I cannot imagine how a cost-benefit analysis, in a time when the Department has been not constrained, would have found this to be an appropriate policy position. I will leave the matter there.
On social homes, it was stated that 10,200 social homes for households on waiting lists were delivered in 2022. Some of these are leased. Others are turnkey properties, where a developer builds a housing estate and then the local authority comes in and purchases it. There would have been an expectation that these houses would have gone on the open market but they do not because they are purchased by the local authority. Of the 10,200 social homes, how many were built, from design to delivery, by the local authorities? I know there will always be a need to bring in a builder and do tenders and all that work, but my question concerns the number of units built by local authorities from the design to delivery stages. If the number is very low, what is the impediment?
Mr. Graham Doyle:
There is the local authority building and the approved housing body, AHB, building. On turnkey properties, we have tried to get away from situations where turnkeys are being developed by local authorities or AHBs in respect of units that would otherwise be available on the open market. What we try to do is to use turnkey properties to deliver units that would otherwise not be delivered in those cases. Specifically, in terms of the numbers, if we take the local authority element of this building, the figure last year was 1,666 units initiated in new-build projects under the auspices of the local authorities. There were 1,200 turnkey developments but again the focus would have been on turnkeys that would not otherwise have been developed.
Catherine Murphy (Kildare North, Social Democrats)
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There are tiny numbers in proportion to the crisis. This is not a new crisis but one that has been going on for years. Mr. Doyle opened his comments today by talking about the underspend, which is very hard to comprehend at a time when we have targets below the housing need. The Taoiseach has said we have a deficit of 250,000 houses. The targets in place now are below this need, and we cannot even spend the money available. Is Mr. Doyle confident the Department will be able to spend all the money available to be spent this year? Will we see another underspend this year?
Mr. Graham Doyle:
We are trying very hard to spend the money while also getting value for it. This is about the delivery of units, ultimately, and the spending is directly associated with that. All our efforts are going towards trying to remove any barriers we can find to allow local authorities and AHBs to deliver.
Catherine Murphy (Kildare North, Social Democrats)
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I reiterate that in this environment I think it is criminal to see an underspend, but I will move on because, as I said, the time is very short.
Regarding the first home schemes, Mr. Doyle mentioned the areas where the pressure is acute, including Dublin, Cork, Kildare, Meath and Wicklow. I suspect there are very few of these properties in Dublin city and that they are in the Fingal, south Dublin and Dún Laoghaire-Rathdown council areas. I say this because there is a tiny number of planning permissions for new homes. In Dublin, 93% of planning permission applications were for build-to-rent units. Does Mr. Doyle have a breakdown in this regard?
Catherine Murphy (Kildare North, Social Democrats)
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Yes, and I am looking for information on the other one as well, the help-to-buy scheme.
Catherine Murphy (Kildare North, Social Democrats)
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If the witnesses would, please, because it is very relevant. Essentially, the population is being dispersed. I used these statistics in the Dáil yesterday. In the 1996 census Dublin city accounted for 13% of the national population; it accounts for 11.5% now. The population is decreasing, it is a different type of population and there is a duplication in terms of providing services, having appropriate transport and so on if the city is not consolidating. The same profile is happening in Cork. We are building perfect donuts which are car-dependent, and all sorts of problems go with that. If the Department were to provide us with that information, it would be quite important because it does have-----
Catherine Murphy (Kildare North, Social Democrats)
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I could have predicted that, but it would be very useful to have the evidence.
May I ask Mr. Doyle about something we addressed very briefly at the last meeting he was at, namely his own salary claim? Is that resolved?
Catherine Murphy (Kildare North, Social Democrats)
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So it is not resolved.
Catherine Murphy (Kildare North, Social Democrats)
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Apart from Mr. Doyle, why should there be a separate process for particular grades in the public service over and above public service pay agreements?
Catherine Murphy (Kildare North, Social Democrats)
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How come there is even a potential pay claim then?
Mr. Graham Doyle:
An issue relating to my own terms and conditions, is it? That is something for which the Department of Public Expenditure, National Development Plan Delivery and Reform has responsibility. I am an employee in this case. There is a matter that has been under discussion. It has not been concluded.
Catherine Murphy (Kildare North, Social Democrats)
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To be honest with Mr. Doyle, the reason I ask the question is that there is another Secretary General for whom there is a very different arrangement, and there has been a concern about knock-on consequences. This is not just for other Secretaries General, but if it starts at the top, are there consequences then for feeding down where there is a particular level? Is there an assistant secretary and then people below that, that is, principal officers and so on?
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have somebody here from the Department of Public Expenditure, National Development Plan Delivery and Reform. Ms Connors, you might wish to answer some of that.
Catherine Murphy (Kildare North, Social Democrats)
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Yes. That would be helpful
Ms Jenny Connors:
The Secretary General's salary is obviously set out in the appropriation accounts. I think what the Deputy is referring to is the independent review of the terms and conditions for recruitment and pay determination. As I understand it, there is an independent review panel on senior public service recruitment and pay processes, and that is expected to go to Cabinet in the coming weeks for consideration of the recommendations contained in that report. As I understand, however, those terms of reference are very much centred on the processes, including the recruitment processes, so not specific to one person.
Catherine Murphy (Kildare North, Social Democrats)
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I would not expect them to be specific to one person. I think they should relate to grades.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Just to clarify, Ms Connors, this does not actually relate to paygrades-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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The panel is actively examining that there would be a re-examination of some Secretaries General being paid more than others. Is that right? I am trying to keep it simple.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is being carried out by a panel of civil servants, is it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is being carried out by a panel of civil servants.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes, just on who makes up the panel-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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-----and whether there are outside consultants or individuals brought in on it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Thank you. Deputy Munster, please.
Imelda Munster (Louth, Sinn Fein)
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I want first to touch on the serious issues arising out of housing adaptation grants, housing for older people and mobility aid grants with Mr. Doyle and the issues that have arisen primarily due to lack of funding. Does he accept that there is serious underfunding in respect of those grants?
Mr. Graham Doyle:
As regards those grants, I think the funding that has been provided has increased over recent years. I will just get the figures here. In just the past three years the funding has moved from about €56 million to €69 million, and this year it is around the same amount. Around 12,000 adaptation grants have been done in the past couple of years and, as far as I am aware, we are essentially at full spend on those items. This is Ms Timmons's area in the context of looking to increase that budget, if that is what the Deputy is asking.
Ms Caroline Timmons:
That is a matter on which we did a review in the Department because it was definitely flagged to us by local authorities and by the people applying for the grants that, potentially, we needed to look at the amount of the grants overall and a number of other issues within the grants. We have done that piece of work and we have made a proposal to the Minister. I think he has asked us to progress that proposal now, so-----
Imelda Munster (Louth, Sinn Fein)
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Can Ms Timmons give us details as to what the proposal-----
Imelda Munster (Louth, Sinn Fein)
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I want to ask about how funding is distributed. Year on year, does the Department contact local authorities to find out the number of applications, the waiting lists, etc., and match funding accordingly, or is it just that the grant is issued, the amount is there for the grants and it is divvied up between councils with no consultation and no regard to the number of applicants, waiting lists going back years, etc.
Ms Caroline Timmons:
We actually do a fairly complex analysis of what each county needs and it is informed by the level of disability in the individual county as well as other factors, such as what the county has spent previously and the number of grant applications, so we do take all that into account. Sometimes what we find-----
Imelda Munster (Louth, Sinn Fein)
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Okay, so if a county council were to say this year that it is still trying to wade through applications from 2021, what sort of additional funding would be given for that? Would the Department give sufficient funding to clear the backlog right back to the applications in 2021 and then sufficient funding to cover for this year?
Ms Caroline Timmons:
Without getting into specifics, where county councils come to us and say they have a number of applications and they fear they will exceed their allocation for the year, we absolutely will look at that with them, and if we can find the money within the budget, we will absolutely do that with them. We would probably have to assess on a case-by-case basis why that was. What we want at the minute is for there to be no particular backlog of applications, so we are quite focused on that. If a particular local authority wanted to talk to us, the door would definitely be open.
Imelda Munster (Louth, Sinn Fein)
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That seems strange because, to give Ms Timmons the example of Louth County Council for the minute, it has 610 applications. Hundreds of them are priority 1, that is, people who have had strokes, people who have serious mobility issues, people who have chronic obstructive pulmonary disease, COPD, or people in need of a wet room or a downstairs bathroom. The council has 610 on the waiting list going back to 2001, as I said. We used to refer to priority 1 cases. The council used to say you nearly have to have one foot in the grave to be priority 1, so these people are seriously ill and in need of these housing adaptations or aids.
Louth County Council closed applications at the end of April because it could not get through the backlog. It says it has drawn down all the available funding, which contradicts what we were just told. When I asked Ms Timmons whether the Department would provide sufficient funding if the council flagged that it had more than 600 people on the waiting list, she smiled as if to say that would not happen. If what she is saying is accurate, how come there are still 610 applicants, including hundreds of priority 1 cases, on the waiting list and why has the council had to close applications? Since the end of April, my office has been contacted by people who have suffered strokes as well as a woman in her 50s who had a leg amputated two weeks ago. She was discharged from hospital last week. Her family members contacted the local authority, as such a life-altering situation requires her house to be adapted. That family, and every family since, has been told to reapply next January. When I say that the grants are underfunded, it is an understatement. The Department is preventing people from getting adaptions to their homes that they desperately need. The lack of funding is preventing people from living independently in their own homes. Given the cost-benefit analysis that was mentioned, one would have imagined that the Department would accept that adapting homes and providing mobility aids when necessary saved the State billions of euro in the long term.
Louth County Council wants to provide these grants and has stated that it has drawn down every last cent available to it. It did not want to have to close applications. What is the Department going to do to sort this mess out? Would it tell a person who had a serious stroke in the past two weeks and the woman in her 50s who had her leg amputated two weeks ago that they had to wait until January 2024 to apply for the grant even though there are already 610 people waiting in front of them?
Ms Caroline Timmons:
That specific case was brought to our attention in recent weeks. I have asked the unit to look into what has happened. To my knowledge, the full allocation was not drawn down by Louth County Council last year. We are open to that. The council applied to us in respect of the case the Deputy raised. I cannot say what will happen, as the application has to be examined, but I have asked the team to look at it.
Imelda Munster (Louth, Sinn Fein)
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That is just one serious case. There are people who cannot get into a bath or climb stairs and are waiting on downstairs wet rooms and stairlifts but cannot get any. How is the Department going to rectify this situation?
Imelda Munster (Louth, Sinn Fein)
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Louth County Council has drawn down every cent.
Imelda Munster (Louth, Sinn Fein)
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Will Mr. Doyle give a commitment to provide sufficient funding?
Imelda Munster (Louth, Sinn Fein)
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We are getting this spiel the whole time. I have just said that there are 610 people waiting, hundreds of whom are priority 1. These are people who cannot climb the stairs and do not have downstairs bedrooms or who cannot get into a bath and do not have downstairs wet rooms. Many of us know people in such situations, for example, people with COPD who cannot even attempt to climb stairs, yet all Mr. Doyle is saying is that the Department will examine the situation. Does that mean it will throw in an extra €2 million? That would not even make a dent in the waiting list.
Imelda Munster (Louth, Sinn Fein)
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Due to the scheme's underfunding, there are people who had strokes last week or limbs amputated who are being told to apply in January 2024 and that the council might get to them in 2025 because it does not have funding.
Imelda Munster (Louth, Sinn Fein)
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Did the review find it was underfunded? There was a 2.3% increase last year, but building costs increased by 16.2%. This is nonsense and nowhere near enough. The Department has to sort this mess out and accept that these schemes are not funded adequately. I would like to hear back as soon as possible – not for myself, but for those who are sitting at home waiting for their houses to be adapted or to get mobility aids to assist them to live independently. When are they going to get what they need? Could Mr. Doyle give me-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Deputy has gone over time. She raised a number of issues, particularly about priority 1 cases. A review is under way, but there are live applications in with the county council and will be on the list ahead of others. The scheme has worked well to date, but it was correct to point out that affordability had become an issue in the past two years. Will the witnesses revert to Deputy Munster on the specific case in Louth she raised? Will they also liaise with the county manager to try to get on top of the situation? Is all of the money from last year gone? Can something be done for these critical priority 1 cases? Will the witnesses revert to the Deputy within the next fortnight, please, given the urgency?
Brian Stanley (Laois-Offaly, Sinn Fein)
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There are probably several hundred cases. I am dealing with a few, although not as many as Deputy Munster. The specific case she mentioned sounded very difficult.
Imelda Munster (Louth, Sinn Fein)
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Can I get an absolute commitment? Often, we do not hear back-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Not a review, but a solution.
Imelda Munster (Louth, Sinn Fein)
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How do the witnesses propose to address the issue? Will they correspond directly with me and the county council-----
Imelda Munster (Louth, Sinn Fein)
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-----within a fortnight?
Mr. Graham Doyle:
Regarding Louth, we provided an extra €1 million over and above the allocation two years ago. Last year, the drawdown was approximately €750,000 less than what we had allocated. Flexibility has already been shown, so we will seek further flexibility in this case. We are happy to engage with the Deputy on it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The scheme is good, but a problem with inflation has developed in recent years.
Colm Burke (Cork North Central, Fine Gael)
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I thank the witnesses for their presentation. I wish to raise several issues. Can we get a breakdown in real terms of the number of units AHBs have delivered in the past 12 months? The number delivered by local authorities has already been discussed. Regarding the cost-benefit analysis, local authorities are subject to strict spending rules and are under considerable scrutiny. Have we a structure to ensure we are getting value for money from AHBs?
Mr. Graham Doyle:
I will ask Ms Stapleton to answer the Deputy's second question. Regarding the first, the number of AHB own builds last year was 3,140. That was against a target of 3,360. I spoke about the local authority element. In both cases, the figures excluded any Part V commitments.
I will ask Mr Stapleton to address value for money and flexibility in that regard.
Ms ?ine Stapleton:
In relation to AHB-funded schemes, a significant portion are funded through what we call our capital advance leasing facility, CALF, scheme. Due to the particular challenges around cost of construction increases and interest rate increases, that became a challenging model for the AHB sector last year in a number of respects. In some rural local authority areas, the link we had made to market rent was not sufficient to cover the full cost of the unit and in some urban areas, the challenge was simply the excess cost of construction. We put a CALF review in place to give greater flexibility on that model. We have a robust value-for-money procedure with the AHB applications that come in for those CALF applications. They go through analysis by the housing agency. It examines the financial analysis and also does a multi-criteria analysis on the proposals.
Colm Burke (Cork North Central, Fine Gael)
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Looking at what the approved housing bodies have delivered and what local authorities have delivered, are there lessons to be learned as regards why it is so slow for a local authority to deliver? If one looks at the timescale from the time an approved housing body identifies a project to finishing delivery and the time a local authority identifies a project and delivers, are there lessons the be learned? We are now so reliant on approved housing bodies and moving away from a reliance on local authorities in real terms. Is now not a time to examine this to see how we can expedite the process within local authorities to identify the project and move it forward on a faster timescale? I have seen in my local authority area, Cork City Council, that projects have been identified but still have not progressed. In fairness, it has moved forward a huge number of projects but there is still a number of projects that could have moved a lot faster than what occurred.
Colm Burke (Cork North Central, Fine Gael)
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Is that not the problem? At one stage, there were about eight different steps for a local authority to get a project from start to finish. I understand that the number of steps was reduced, with the same level of scrutiny remaining. I hear from officials about their frustration. They want to get on with a project but they have to jump a lot of hurdles. They are also frustrated by it.
Ms ?ine Stapleton:
To speak positively about the delivery of local authorities, they do a much greater proportion of own delivery than AHBs, which tend to rely mainly on what we call "turnkey" delivery. The latter is a simpler model in terms of approvals. Local authorities devote a far greater proportion of their delivery to own construction, which requires a significant number of steps to take something through design and planning that AHBs would not be required to do if they pick up a turnkey development. The local authority picture is improving. We have looked at some of the challenges they have in ratcheting up own-build because that is our policy. We looked at issues like the land acquisition fund the Secretary General mentioned earlier and we brought in emergency planning provisions to enable fast-tracking of planning for a temporary period. We resourced local authority teams to the scale of 250 staff for social housing delivery. I expect, taking those measures into account, that we will see significant ratcheting up of both the speed of local authority delivery and the scale of own-build delivery.
Colm Burke (Cork North Central, Fine Gael)
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Why has it taken that long? We started this project in 2016 and we are now talking about ratcheting it up. Why was that not done three, four or five years ago? Why is there such a reluctance to speed up the process? That is how it comes across.
Colm Burke (Cork North Central, Fine Gael)
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For instance, in 2022, a target was set. How many local authorities reached their targets?
Colm Burke (Cork North Central, Fine Gael)
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It is important that we have that figure because if one is setting targets, we are the Committee of Public Accounts and we want to deliver housing. Everyone in the House wants to make sure adequate housing is delivered. Should the Department not have figures on what local authorities reached their targets immediately available for the committee?
Colm Burke (Cork North Central, Fine Gael)
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I am still asking how many local authorities reached their targets and how many did not.
Colm Burke (Cork North Central, Fine Gael)
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How is engagement with authorities that did not meet their targets progressing? We must deliver. There is a demand. It is the case that someone has to oversee it. We rely on the Department to oversee local authorities. In fairness, councillors are frustrated as well because they might see their local authority not delivering. What can we do to make sure every local authority reaches its target?
Ms ?ine Stapleton:
There are a number of positive initiatives at the moment, which will help to underpin delivery. Towards the end of last year, the Department put a proposal to the Minister about discharging legacy debt on sites across 26 sites. That discharge of debt has been linked to accelerated delivery using modern methods of construction, MMC. It is a strand that we think has potential.
Colm Burke (Cork North Central, Fine Gael)
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Another issue is the land bank that local authorities have. If Ms Stapleton had an assessment in the morning of the land bank each local authority has, what numbers of housing or residential units would those deliver in each local authority? Do we know what land bank each local authority has? What is their plan over three to four years in relation to those land banks? How many local authorities have insufficient land to progress their housing projects?
Ms ?ine Stapleton:
We did a significant analysis with colleagues in the housing delivery coordination office with local authorities around land available for social housing delivery and how that maps against targets in Housing for All. The result of that analysis showed that out to 2026, there is a gap in land to support about 4,000 units. On foot of that analysis, we agreed with colleagues in the Department of Public Expenditure, National Development Plan Delivery and Reform to put the land acquisition fund in place. The first set of proposals under that fund will be focused on those that are capable of delivery within that time period. This is a pilot initiative. It will be reviewed in conjunction with the Department of Public Expenditure, National Development Plan Delivery and Reform. We hope to build on it. The analysis of land availability has been very helpful in giving us a sense of what the gap is and how we need to move forward on it and support the sector.
Colm Burke (Cork North Central, Fine Gael)
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On the cost analysis of housing being built by local authorities and housing agencies, is there an overall figure? Is there an average figure per local authority comparable to, for example, what is available on the private market? How does that compare, percentage-wise, for example, when a local authority gets 50 houses built and houses are being sold privately in estates quite close to it? What is comparable in that case?
Ms ?ine Stapleton:
We have quite a lot of data on that. I am happy to share that information with the committee. Our various delivery streams help us to build up a picture. With own construction delivery, we get good-quality information coming through from the tender process, which allows us to set basic unit cost guidelines for local authorities. Our separate delivery stream on turnkeys gives us a good indication of the market prices of similar units. We can give the committee average figures across the different delivery streams, which will allow members to look at the comparison. We might do it by local authority area if we have the information. I caution that there can be differences depending on location, unit type and site issues, etc. It is not necessarily comparing like with like when looking at high-level averages.
We will look at the level of detail that we have and we are happy to share that with the committee.
Colm Burke (Cork North Central, Fine Gael)
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Can I ask a final brief question? With regard to approved housing bodies, I came across a few cases where private estates were being built. When private estates are being built, a certain level have to go to local authority housing. The same rule does not apply where an approved housing body buys an entire estate, where a certain percentage has to be for private ownership. I have one in my area where more than 80 houses were being built. Many young people locally wanted to buy. They were working and living ten, 15 or 20 miles away from home. They wanted to move back to their own neighbourhood and suddenly found that the approved housing body had bought all 80 or 85 houses. They felt aggrieved by that because they did not then have an opportunity to come back into their own area. Is there any restriction on an approved housing body acquiring an entire estate overnight? We have a restriction where a private developer is developing, where a percentage must be provided for local authorities, but we do not have the same restriction on approved housing bodies buying entire estates.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Sorry. Deputy Burke asked a very direct question, not to go on about broad policies. Is there a restriction on the percentage that an approved housing body can buy in a housing estate? That is the question. Is there a restriction or not? Just to be helpful to him.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The question he is asking is whether there is a restriction.
Colm Burke (Cork North Central, Fine Gael)
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For our example, 85 houses were being built privately. There were many young people. Many had even paid deposits and suddenly the developer was approached by one approved housing body to buy the whole lot of the 85 houses. This was the only opportunity for people to get back into the area. Suddenly, they found it was taken from under them.
Colm Burke (Cork North Central, Fine Gael)
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Is it not something that should be looked at?
Colm Burke (Cork North Central, Fine Gael)
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Especially where there is an area with little opportunity for people to buy themselves and to move back into their own home area. Many would have been involved in sports organisations and community groups in the area. They could not get a house locally and had to move ten miles out, then when they got the opportunity, it was suddenly swiped from them again.
Ms ?ine Stapleton:
One thing that is helpful to us in policy terms is the availability of the affordable purchase schemes and cost rental schemes, because they allow us to look at tenure mix in a better way than we had previously. It gives us extra levers. We would be happy to consider that point. It is a valid point to raise from a public policy perspective.
Brian Stanley (Laois-Offaly, Sinn Fein)
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To conclude, can we clarify that there are no restrictions at the moment on the maximum percentage an approved housing body can buy as a turnkey?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Are there restrictions on local authorities?
Colm Burke (Cork North Central, Fine Gael)
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I thank the Chair.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I just wanted to get clarity on that. We are going suspend until 11.10 a.m. and I ask for people's co-operation with that because we have much work to do this morning.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We are back in session. I call Deputy O'Connor.
James O'Connor (Cork East, Fianna Fail)
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I welcome all of the officials. It is important that we get a sense of what is going on. My first question relates to Mr. Doyle's pay increase. I am aware that this question was asked by one of my colleagues earlier, but I want to ask Mr. Doyle if he sought that pay increase or did somebody come to him offering it.
Mr. Graham Doyle:
This issue relates to personal terms and conditions. I have engaged with colleagues elsewhere in government in respect of to it. It is a personal HR matter and it is under the policy remit of the Department of Public Expenditure, National Development Plan Delivery and Reform. There is not a particular update since the previous meeting. I addressed the matter at that meeting. The detail of the situation is not something I am able to comment on.
James O'Connor (Cork East, Fianna Fail)
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What does Mr. Doyle currently get paid?
Mr. Graham Doyle:
I am currently paid at the level of the Secretary General II salary under the higher PRSI pension contribution.
James O'Connor (Cork East, Fianna Fail)
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What is that?
James O'Connor (Cork East, Fianna Fail)
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Does Mr. Doyle think it is appropriate to seek a pay increase on that figure?
James O'Connor (Cork East, Fianna Fail)
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That is approximately two and half times what a Deputy gets paid. It is a significant wage. I just want to get to the bottom of how that conversation started. This is the second Department in respect of which this issue has emerged. We, as elected representatives, need to get a sense of what on earth is going on. I will ask the question again. Did Mr. Doyle seek that pay increase?
James O'Connor (Cork East, Fianna Fail)
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So somebody came to Mr. Doyle to raise that-----
James O'Connor (Cork East, Fianna Fail)
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I just need to make the point that if somebody enters the public service or public life, it is a career where we have enormous influence, where we get to work on issues that matter to people and where we can effect change. I do have a problem, however, when people working in the system are on salaries of such scale, particularly in light of the housing crisis. This is the reason I want to ask, and it is important those questions are asked.
I will now move on to the delivery of housing and the underspends that are occurring in many Departments. I want to get a sense from Mr. Doyle of what is going on with funding the construction of social and affordable housing. Are there any particular areas of the Department, from the years 2021 and 2022, in which there was an underspend. If so, why did that happen. I ask, in particular, in the context of social and affordable housing.
Mr. Graham Doyle:
The bulk of the underspend was in the social housing area. There was a huge amount of capital negotiated to fine deliver on the targets. The targets were not met and there was a different mix of delivery, which also impacts the up-front capital outlay. It is for those two reasons we see the underspend, and particularly in 2022.
James O'Connor (Cork East, Fianna Fail)
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If Mr. Doyle was to translate that underspend into the number of units that could be delivered, is there an approximate figure?
James O'Connor (Cork East, Fianna Fail)
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Is the Department on track for 2023 so far?
James O'Connor (Cork East, Fianna Fail)
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Obviously, during that year there were significant challenges in the context of the pandemic. Being honest, I do not believe any of us should dismiss that. There was a lot of frustration around restrictions impacting building sites. While hindsight is 20:20 vision, in getting a sense during that year of when the Department was going to be able to identify the under supply and the underspend, at what point in 2021 did the conversation happen within the Department where it was brought to the Minister's attention that this is going to occur?
Mr. Graham Doyle:
With regard to what we tried to do last year, there is a strong tendency that one can see year after year in housing delivery terms where a huge proportion of the delivery happens in the last quarter. That has been a perennial challenge. Last year we had hoped to try to pull that delivery across the totality of the year. The issues that occurred in the early part of the year, which the Deputy has referred to, with construction inflation, issues around risk uncertainty, and tendering and supply chain issues pushed a lot of that time frame, and in fact made it worse than ever in the context of pattern of delivery through the year. A huge proportion of the delivery actually happened within the last quarter. Nearly 6,000 of the units were actually delivered within the last quarter. What we had hoped might happen did not happen, given the major changes that occurred at the start of the year.
Therefore, in that context, what you are doing is trying to work with the local authorities, the AHB sector, and with social housing and asking specifically about trying to get as many of those units delivered as quickly as possible.
James O'Connor (Cork East, Fianna Fail)
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I will stop Mr. Doyle there because we have limited time. On the delivery of housing, I want to make one point. I hear this time and time again from young people, particularly those working in places like Dublin, Cork, Limerick and Galway, where these problems are most acute because there is such high demand on rental accommodation in these high-density urban areas. If someone is looking in Dublin, particularly between the canals, there is no house being constructed at present that is eligible for the first home scheme. From the point of view of the first-time buyer in that situation, living and working in those areas, they are paying out significant rents. Looking at a 20- or 25-year mortgage, if you were to boil them down to two-bedroom apartments with an en suite and a parking place, many of those rents would probably work out somewhere in and around 60% more expensive than a mortgage repayment. If somebody has a child in those circumstances, such as in a two-parent household with one or two children, and they are stuck in rental, it is critical that something is done to help those parents. Would the Department consider, in conjunction with the Department of Finance, looking at potentially doubling the first-time buyer's grant for households that are renting and that want to purchase and may have children, given the huge costs involved with childcare needs, with trying to meet rent payments, and the cost of living in general in these urban areas in order to try to free people from a situation where they are continuing to pay rent? That comes back to bite those families later in life. Whatever the equivalent in 40 or 50 years' time is of today's fair deal scheme, there are incredibly acute long-term problems that occur as a consequence of somebody not acquiring a roof over their own head. It is back to the debate about Irish people liking to own the home over the heads. Effectively, what I see occurring here is a very serious long-term problem that will have very serious long-term consequences. I make that point to Mr. Doyle. What is going to be done in areas such as in Dublin city centre where the delivery of units, quite frankly, is farcical at the moment when it comes to residential accommodation that is affordable? There does not seem to be any movement on it. I do not want to hear about the costs of construction and other inflationary problems with which the Department is dealing; I want to know what it is going to do about it. I would appreciate a reply on that please.
Mr. Graham Doyle:
The particularly difficult piece of the Deputy's question is within those core city areas he talks about. There is a lot being done for that buyer in the context of areas outside of that and the first home scheme is hugely attractive in some of the circumstances the Deputy mentioned-----
James O'Connor (Cork East, Fianna Fail)
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The challenge, and the point I am trying to make to Mr. Doyle, is that the first home scheme is great if you are down the country, in Kildare, or in a lot of rural constituencies where there are houses being built that are eligible for it. My own constituency is one of them where there will be a significant number of houses delivered. What I would say is that in urban areas like Dublin and Cork city, quite frankly, there are not enough houses going up that are eligible for it. Within the canals in Dublin, there are zero. That is incredibly problematic for people who effectively get trapped in a situation where they are paying high rents for potentially over a decade. When someone is in a situation where that is occurring, unless they are on a salary like Mr. Doyle, he or she is not going to be in a position to qualify for a mortgage to purchase, for example, a €350,000 or €450,000 apartment to get on the properly ladder in terms of home ownership. I want to get a sense from Mr. Doyle as to what has been done because I am not getting that.
Mr. Graham Doyle:
The first issue on that, particularly in those core locations the Deputy talks about, is to try to get units developed and activated. Schemes like Croí Cónaithe are very much about trying to get apartments built in those core areas to try to use those brownfield sites in an efficient way.
James O'Connor (Cork East, Fianna Fail)
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With all due respect to Mr. Doyle, there are no sites. One could count on one hand the Croí Cónaithe eligible sites in Dublin city centre. There are none between the canals. There are very few.
James O'Connor (Cork East, Fianna Fail)
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This is where we need the population density because it has the infrastructure.
Mr. Graham Doyle:
That is why we are trying to bring forward cost-rental schemes and schemes that allow activation of some of those sites within that core area the Deputy mentioned, and to try to bring forward mixed-tenure sites where we can in those core areas that provide opportunities for various different cohorts of people at different stages of their lives.
Marc Ó Cathasaigh (Waterford, Green Party)
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I thank the representatives from the Department for their opening statements. This is my first time meeting them in the course of the Committee of Public Accounts, although I know they have been in relatively recently. I turn to something which was detailed in their opening statement. I want to change tack slightly and look at that heritage element of the Department of Housing, Local Government and Heritage, and the National Parks and Wildlife Service in particular. The figure outlined of the 70% drop in funding between 2008 and 2011 is very stark. There has been an absolute sea change in terms of funding for nature generally within this Government but also within the NPWS where we have had a rapid re-expansion. Both of those scenarios are challenging. Has there has been a scarring effect on the organisation from the retrenchment of the money? What does the Department see as growing pains as it tries to regrow, restaff, and repower the organisation?
Mr. Graham Doyle:
I thank the Deputy. There has been a huge focus on trying to bring back and restore the funding and the staffing levels from before. As I said in the opening statement, it has taken a long time to do that but we have done it relatively quickly in the past couple of years. In terms of scarring effect, I have no doubt there has been. I joined this organisation at a late stage and the heritage brief joined us relatively recently. I can only imagine, and in terms of talking to people within the heritage and National Parks and Wildlife Service side, that it is quite demotivating when you see funding lost and you are passionate about the role you do. I have no doubt that this scarring effect takes place within the sector generally. I hope that some of that gets healed or improved by the commitment that has been shown and by the willingness to negotiate the higher levels of funding and to try to provide the additional staff numbers.
As to the last part of the Deputy's question, there is a huge challenge for everybody in all sectors now, whether in the private or public sector, in terms of just getting staff. That is a challenge.
Marc Ó Cathasaigh (Waterford, Green Party)
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The question has been put to Mr. Doyle around his own salary but the question I would ask is around the salaries being offered, particularly to rangers. I want to talk about both recruitment and retention. These are often very highly qualified people. I know the starting salaries are in or around €35,000. Those boots on the ground are absolutely critical. I have submitted a number of parliamentary questions around where we have deficiencies in terms of the rangers and I get back this answer that it is for operational reasons. I understand the rationale behind that but from talking to people, I could identify on a map of Ireland where it is we are short of rangers. Those boots on the ground are absolutely critical. I ask about recruitment and retention particularly with regard to that. The strategic action plan for the NPWS committed to 60 additional staff members as a priority as well as that increasing number of conservation rangers. Where are we specifically regarding those conservation rangers?
Mr. Niall ? Donnch?:
I thank the Deputy for his interest in this area and for those questions. Funding levels are now back ahead of where they were in 2008 which was the zenith of previous funding. To put the growth of the organisation in perspective, at the end of 2020, there were 349 staff members in the National Parks and Wildlife Service; as of the last counting, there were 472. Therefore, there has been very significant growth and recruitment, including as a result of the programme for renewing and refreshing the National Parks and Wildlife Service which the Government agreed last May.
I cannot really address the pay issue, in the context of the ranger grade. Front-line staff are absolutely crucial to us. They are the first among the troops within the National Parks and Wildlife Service. They cover 87,000 ha of national parks and nature reserves, as members will know.
Some 14% of the country is designated for either birds or wildlife and that is a very significant footprint for which we, in the NPWS, with partner organisations and the farming community, have responsibility. The targeted ranger cohort is 120. Now we are at approximately 80. We are in the middle of two recruitment competitions for rangers. We had nine new rangers assigned to us in the past fortnight. A Public Appointments Service process is ongoing and we are taking people from those panels as quickly as we can ------
Marc Ó Cathasaigh (Waterford, Green Party)
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I know Mr. Ó Donnchú said it was difficult to talk about paygrades -----
Marc Ó Cathasaigh (Waterford, Green Party)
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The simple question is: is enough being paid to get those 40 extra rangers?
Mr. Niall ? Donnch?:
I will address it. They are coming into us. Recruitment is challenging in the labour market right now and retention is a real challenge. We make the investment in these colleagues who are absolutely crucial. Sometimes they are attracted to the private market. There is an ongoing pay claim with Department of Public Expenditure, NDP Delivery and Reform which has responsibility for pay and I do not want to prejudice that. Our view within NPWS, which I will say plainly, is that the pay for the ranger cohort has not been looked at in a very long time and needs to be addressed. I do not want to prejudice the engagement between Forsa, the conservation rangers and Department of Public Expenditure, NDP Delivery and Reform at the moment but we certainly will not stand in the way of that review.
Marc Ó Cathasaigh (Waterford, Green Party)
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It is absolutely critical to have those boots on the ground. Mr. Ó Donnchú mentioned that 14% of land mass is designated in one shape or form. A total of 85% of our EU protected habitats are in unfavourable condition. The problem is particularly acute in our SACs. Will Mr. Doyle comment on the European Court of Justice case that is referred to here regarding the State’s failure to fulfil its obligations under the conservation of habitats and wild fauna? I assume that is the habitats directive, as we commonly refer to it. I want a sense of the potential liability. Are we are looking at substantial fines from the EU? If so, would we not be better advised to spend that money on bringing those protected habitats up to scratch? If we are looking down the barrel of fines, we are also looking at the nature restoration law that was debated in the Dáil yesterday. Article 4 in particular will be quite stringent in respect of our protected areas. Where are we in that case and what are the State’s liabilities looking like?
Mr. Niall ? Donnch?:
The Deputy mentioned the reduction in funding post 2008 at the outset in the context of addressing the banking crisis and so on and the moratorium on recruitment. In several respects, we see the impact of that on SACs. There are 424 special areas of conservation within the ambit of that case. The Commission contended - we believe incorrectly - that we had not transposed the directive sufficiently in respect of those 424 sites. There are three tests of transposition. First, are they protected in law; are they protected through the planning system? The answer to that, as anyone here who works in the planning system, is an unequivocal “Yes”. From the moment they were notified to the Commission, every single one of those 424 sites was protected through the planning system. Second, was there a statutory instrument, SI, backing each of those 424 sites? In that respect, we needed to up our game. As of today, 401 of those sites that have full SI backing to reinforce the protections we have through the planning system.
The third test is whether we have site-specific conservation objectives for each of those 424 sites. We now have a full complement of site-specific conservation objectives for each of the qualifying interests. The qualifying interests would differ. The Chair will be very appreciative of this in the context of raised bogs etc. The qualifying interests differ from site to site. The other test, which is challenging and where there is probably a degree of exposure, is did we have comprehensive conservation measures in respect of each qualifying interest on each of those sites? We tended to deal with conservation measures on a programmatic basis, that is, a national programme as distinct from a site-specific programme. We now have a nature conservation directorate within the NPWS as a result of the review. We have comprehensive sets of measures, some more comprehensive than others, in respect of all of those sites. I believe significant inroads have been made in this respect. We mounted quite a robust defence and, I need to be careful here, but given the direction of travel in the Advocate General opinion published in February, it seems there may be some challenges around that. It will not go to immediate fines, we understand. If the ECJ finds against us, that goes back to the Commission. There has been significant engagement with the European Commission on the significant progress being made here. We have 424 subject SACs. There are 127,000 NATURA network sites. We know that, in respect of the other member states, that a huge number of those are not as compliant as we are. We are actually leading the charge here. There are very significant impacts for other European member states if there is a finding against us. In some respects, that is feeding into the sense of unease about the direction of travel on the nature restoration regulation. I do not know if the Deputy wants me to address that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Mr. Ó Donnchú for that very comprehensive answer. Deputy Brady is next.
John Brady (Wicklow, Sinn Fein)
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I welcome the officials. It is estimated that between 1991 and 2013, up to 80% of apartments built had major issues in regard to fire safety, structural defects and water ingress. Between 60,000 and 100,000 homes are estimated to be affected. Does Mr. Doyle agree that was mainly due to the lack of build controls, poor regulation and a lack of oversight?
John Brady (Wicklow, Sinn Fein)
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There was no oversight there to ensure that compliance was met.
John Brady (Wicklow, Sinn Fein)
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On the oversight in place now, is it correct that the National Building Control Office was established in 2019?
John Brady (Wicklow, Sinn Fein)
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It operates under the jurisdiction of Dublin City Council.
John Brady (Wicklow, Sinn Fein)
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On the costs of remedying defective apartments, there is a figure of approximately €3 billion. Is that an accurate figure?
John Brady (Wicklow, Sinn Fein)
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Then there was the mica scandal. Again, there was a lack of oversight and building control and poor regulations. It is estimated that €3 billion is needed to remedy that.
John Brady (Wicklow, Sinn Fein)
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How many core staff are working in the building control office operating out of Dublin City Council?
Mr. Graham Doyle:
The initial cohort for that office under the business case was eight staff to do the co-ordinating function across the local government system. That was increased by four post Brexit in the context of additional work that was required. Approximately 100 people across the local authorities operate in the building control and market surveillance space. They work with the office. The relevant number is 12. I think there are ten in place at the moment. There has been quite a bit of churn and there are two recruitments happening at the moment.
John Brady (Wicklow, Sinn Fein)
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There are at least ten.
John Brady (Wicklow, Sinn Fein)
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That was on the basis of a business case that was put together for the office.
John Brady (Wicklow, Sinn Fein)
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Who put together that business case?
John Brady (Wicklow, Sinn Fein)
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Mr. Doyle is likely aware of Ms Mairéad Phelan, who is the head of the building control office.
John Brady (Wicklow, Sinn Fein)
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I assume Mr. Doyle is also aware of correspondence penned by her in January 2020 wherein she described the situation as a national emergency. She outlined challenges and difficulties and a lack of resourcing within the building control office. Is he aware of that email?
John Brady (Wicklow, Sinn Fein)
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Has Mr. Doyle seen that email?
John Brady (Wicklow, Sinn Fein)
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Is Mr. Doyle aware of the content of the email?
John Brady (Wicklow, Sinn Fein)
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Has Mr. Doyle sought to find out who got a copy of that email?
John Brady (Wicklow, Sinn Fein)
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That organisation was established in light of a cost of €6 billion, and potentially more, that resulted from a failure to have oversight and building controls in place and poor regulation. The organisation was put in place to ensure all those issues are addressed. The head of the organisation penned an email and called the situation a national emergency and said that regulatory staff are forced to work outside normal hours, cancel annual leave and rely on interns to plug gaps, despite appeals for extra resources. This email has not been flagged with Mr. Doyle, the Secretary General.
John Brady (Wicklow, Sinn Fein)
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I am trying to ask that question. Mr. Doyle only became aware of this email via the media last week.
Mr. Graham Doyle:
That is correct. From speaking to staff in my own organisation in the meantime, I understand that while the resourcing of the office is a matter for Dublin City Council in the first instance, it has not come to us to ask if we can provide resources. We did provide some funding in 2021 in response to increased functions at that stage under an agreement where the funding of the office would then revert to the system. My understanding is that we have not been asked for additional funding.
John Brady (Wicklow, Sinn Fein)
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Has anyone from the Department contacted Dublin City Council on foot of this? I find it astonishing that the head of this body described the situation more than a year ago as a national emergency and the Secretary General is not aware of that. I find that extraordinary. Since he found out about the email via a newspaper article, has Mr. Doyle contacted Dublin City Council to see what has been done in the intervening period?
Mr. Graham Doyle:
I have not done so. I have engaged with my own staff in the area and they have informed me. The County and City Management Association, CCMA, Dublin City Council, the office itself and the Department met recently to discuss a new governance structure, particularly around the upgrade of the IT system and the office generally. Dublin City Council is preparing a paper on that, which it will discuss with us. That is a recent development.
John Brady (Wicklow, Sinn Fein)
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I have referenced two major failures. We only need to look across the water to see the disaster that took place in Grenfell Tower. Some 72 people lost their lives because of serious failures. What analysis has been carried out in of high-rise buildings throughout the State to ensure what happened in London cannot and will not happen in this State? Is Mr. Doyle aware of any audits of high-rise buildings that have taken place?
Mr. Graham Doyle:
I am not aware of the specifics but I can get them. I know the issue of fire regulation is taken seriously within the local government system. In general, there has been quite a lot of reform of building controls and regulation in recent years. There have been additional improvements at various junctures. We are now preparing for a national building standards regulator under the programme for Government and staff have begun work on trying to develop a model for that regulator. That will take the building regulation regime further.
John Brady (Wicklow, Sinn Fein)
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I am conscious of time constraints. The Minister has said there are up to 37,000 homes at various stages of construction across the State. The head of the building control office stated there is a national emergency. Is Mr. Doyle concerned that a year has elapsed and nobody in the Department is aware that the situation was described as a national emergency? There is a lack of resources within a body that was put in place to ensure building control oversight. Is Mr. Doyle concerned that a year has elapsed and he is not aware of this email? Nobody in the Department has reached out to Dublin City Council to see what the challenges are or what additional resources may be required. Is Mr. Doyle concerned that a situation such as that in Grenfell Tower or another potential scandal related to lack of oversight may happen because of the failure of the Department? The Department does not have oversight as to what oversight and resources are in place for the body that has been specifically put in place to ensure something like that cannot happen again. Is he concerned that there is no oversight from the Department?
John Brady (Wicklow, Sinn Fein)
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I specifically asked Mr. Doyle five minutes ago who from the Department has reached out to the office. Mr. Doyle told me nobody had done so.
John Brady (Wicklow, Sinn Fein)
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I asked had anyone from the Department reached out.
Mr. Graham Doyle:
I apologise. My understanding is that the comments made by the head of the shared office about resourcing was a reference to the office itself. There are approximately 100 staff engaged in building control across the local government system. If staffing in the shared office is an issue, we will work with Dublin City Council to address it.
The next step in all this is the establishment of the building controls regulator, which has already been agreed on in principle at Government level. We are now trying to put that in place.
Brian Stanley (Laois-Offaly, Sinn Fein)
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To continue on the theme of standards, the mica scandal cost is, depending on inflation and a number of matters, between €2.5 billion and €3 billion. Defective apartments are on the far side of €2 billion. We are looking at €5 billion or €6 billion there. How much was the figure for the pyrite, roughly? Does somebody in the Department know?
Brian Stanley (Laois-Offaly, Sinn Fein)
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It will run up to approximately what figure? Will it be €200 million or €250 million?
Brian Stanley (Laois-Offaly, Sinn Fein)
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We are therefore looking at approximately €6 billion to cover those three major issues. Back in the year of our Lord 1946, an Act was passed by the Oireachtas. It was the Industrial Research and Standards Act 1946. Section 21 provided for a statutory instrument, S.I. Is Mr. Doyle aware of this? It states that:
"Every person who makes any representation which is false in any material respect that any commodity, process or practice is of standard specification shall, unless he proves that he acted without intent to defraud, be guilty of an offence under this section and shall be liable on summary conviction thereof to imprisonment for a period not exceeding six months or to a fine".
Specifically, a statutory instrument came from this in 1949. It was S.I. No. 288/1949, the Standard Specification (Solid Concrete Building Blocks Made With Natural Aggregate) Order, 1949. It deals with harmful impurities and it goes on to state what they are. The relevant section states:
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.
It is very specific. It states that in the case of fine aggregate there should be no more than 3% for natural sand. There should be no more than 5% for crushed stone. In the case of coarse aggregate, it should be 1%. To me, that is very simple. I am not an engineer, but I can understand what it is saying.
We have just had a conversation about the National Building Control Office. If the media reports are correct - and I have not heard them being contradicted this morning or since they came out over the weekend - clerical officers are being sent in to fill gaps where engineers and lab technicians may be needed. They do not have the staff they need. Huge bills are clocking up. We here in the Committee of Public Accounts are looking at this and asking how we can protect the public purse. I am sure everybody and the people in the Department want to do this as well. However, I am getting no comfort. My doubts are not being erased here this morning if it is being left to do by the county council, or the city council in this case. I am not coming down on Dublin City Council in particular, but they will have their own priorities. Mr. Doyle and I both know how it works in the local authorities when there is an attachment like this and where there are shared services.
This needs to be a stand-alone office. There is the question of the red flags and red flags on fire, which were raised in January of last year. This is almost a year and a half ago. In fact, it will be a year and a half ago this month, because we are in June. They have still not even come to the attention of the Oireachtas. We cannot say here this morning what action has been taken on it. Who in Mr. Doyle's office and in the Department has gotten back to Ms Whelan to tell her that we have a serious situation and asked her what they can do to help?
There is the fact that in excess of 30,000 homes were built last year. There will possibly be in excess of 35,000 homes this year. That is all good. Yet, here we are saying, "Here we go again". We spent a whole decade. I can bring Mr. Doyle to estates that are not yet finished because of the last mess we created during the 2000s. Some of us who tried to raise these matters at the time were told we were anti-jobs and anti-housing, but we were simply trying to raise these certain serious matters that were sitting in front of us. Any common Joe Soap could see what was going on in terms of building standards and building regulations.
Here is this legislation from 1946. They had very little technology. They did not have computers. They had very little way of working. Yet, they had very clear specifications. How can we continue like this? Can Mr. Doyle understand my frustration from my point of view as a member of the Committee of Public Accounts? Members of the public are looking in on this and they will ask why this was not acted on. Has any complaint been made to An Garda Síochána regarding fraud in relation to mica? There were a whole pile of suppliers here, and where are they now? Even if they have gone out of business, there are still the people. They were directors of companies. Has anybody looked at this in terms of taking a prosecution?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that.
Mr. Graham Doyle:
-----my understanding was that a lot of legal advice was taken in relation to the pursuit of organisations in this case, as well as the challenges in relation to that. What I would say is that since I came to the Department and in the last couple of years, the focus has really been on trying to support and help the people who have been affected, as well as developing the scheme, etc. There is-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Doyle, with respect, the Oireachtas has done a lot of work on that. We must stop doing these things. We must stop having the mica. We must stop having pyrite. We must stop having defective apartment blocks. I know there will be slip-ups here and there, but these are monumental problems. They are absolutely monumental. We are lucky that the State's revenues are very good at the moment. If they were not, we would be up you-know-what creek without a paddle. If we were in a period of austerity here, we would have leaky apartments. There would be crumbling houses in Donegal, Mayo and down as far as Clare. There is pyrite in houses in Offaly, the whole way up to Dublin and back down to Wicklow. We would not be able to do anything about that. We are lucky that the State's finances are fairly good at the moment and that bumper taxation is coming in. That is all good. That is allowing us to get past this, but what we are trying to convey here this morning is that there needs to be a sense of urgency.
I welcome the fact that the Minister of State, Deputy O'Donnell, has had a conversation with the National Building Control Office. It is good that they acted quickly on that. However, I refer to Mr. Doyle as Secretary General and to his senior team who are here this morning. Mr. Doyle's team will have a major role in this, because the officials will do the tick-tacking behind the scenes when we all walk out of here today. This is the public part of it. I ask him to give this a sense of urgency and to come back to us here within two weeks about what is going to be done to beef up the office.
It is unfair and it is not right to rely on the local authority to pull resources out of somewhere within Dublin City Council. I am sure Dublin City Council is firefighting issues such as homelessness, traffic problems and numerous other problems. It is not for me to defend them or speak for them, but this needs to be sorted. We need this building control office. Mr. Doyle mentioned the figure of 100 staff in local authorities. I understand the number of building control officers is closer to 70. Mr. Doyle and I also know that many of them work half-time. They have numerous other roles within the local authority. Is that not correct?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Some of them do HAP inspections.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Some of them have roles where they inspect HAP properties. They have other jobs as well. I refer to some of the smaller local authorities.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We must be mindful of that. In relation to this mica and pyrite situation, how close are we to finishing with pyrite?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Can we have a progress report in the next two weeks regarding the National Building Control Office and what is being done directly by the Department? I do not want to crucify anybody here this morning.
The buck stops with the Department to get on top of this situation. We cannot continue. Somebody will be sitting in this room in ten or 20 years sorting out another bunch of problems with another Bill and they could be in a period of austerity when the money is not there. At the end of the day, this is taxpayers' money. We cannot keep firing it around like confetti at a wedding.
Verona Murphy (Wexford, Independent)
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The Chairman said "confetti at a wedding". A lot of weddings will be cancelled at the rate we are going. I want to go back to the density issue. Let us forget about the schemes. Approximately 6,000 apartments that are on the table are going to be subsidised. The only site sold in Dublin that I have been able to find of late was 5.2 acres and achieved a price of €60 million, at density levels of 100 dwellings per hectare. That works out at a site value of €126,000 per apartment. If someone builds five blocks comprising 500 apartments on 5 acres, that works out at €126,000 per apartment. The apartment itself is going to cost €100,000 to €125,000 more to build than any house, so that is €250,000 for building at high density.
The Department's insistence on a planning policy dealing with compact development will bankrupt this country. We could build 6,000 three-bedroom houses outside of the M50 where the balance of that money could be used to develop transport infrastructure in any county where lower densities are not only viable but what is wanted. People do not want apartments. The 440 acres that would be required to build 6,000 houses would cost somewhere in the region of €250 million - that is a generous estimate - versus €6 billion, if we were to calculate at Savills rates the cost of the land to build the 6,000 apartments in city environments.
The witnesses seem to believe, given they referred to it in response to Deputy McAuliffe, that people need to live in this 15-minute city idea where services would be cheaper and would be provided. They do not, and people are voting with their feet. They are moving outside of Dublin to be able to afford a home they want to purchase and own themselves. Nobody is going to purchase apartments built at a starting cost of €250,000 before a block is laid. If we were to calculate the cost of the 6,000 apartments, we would only subsidise the purchase of the land, because the Department’s €750 million will achieve €125,000 per apartment of a grant or subsidy. How long are we going to do that for when we have an alternative? That is why the UK moved away from compact development.
Mr. Doyle has a choice here. He is the Secretary General and Mr. Hogan is sitting in front of him. They can choose to change our planning policy and save the taxpayer billions of euro, or they can continue with it and end up bankrupting the country. That is where we are. It is €6 billion to build apartments in city environments where we do not have infrastructure to support apartment-building outside of Dublin. In Wexford, we do not even have a train service. We have a train that is probably the biggest polluter in the country and it does not even run to schedule. Where would we be going putting people into high-rise apartments? What would we be doing? There is no transport infrastructure and it will not follow. The Department is following a pipe dream. An ideology was developed by the person who was the head of planning policy and now happens to be our Planning Regulator, and nobody has the balls to stand up to him and say this has to change.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I ask the Deputy not to personalise the discussion in regard to someone who is not here to defend himself.
Verona Murphy (Wexford, Independent)
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I am not personalising it. It is fact. Will Mr. Doyle tell me where the Department’s cost-benefit analysis that discounts what I am saying is?
Verona Murphy (Wexford, Independent)
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I have one quick question. Did the Department carry out a cost-benefit analysis? Where is it? I want to see it, and Mr. Doyle had better not be in any way economical with the truth here. Has the Department carried out a cost-benefit analysis?
Verona Murphy (Wexford, Independent)
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If he has the answer.
Verona Murphy (Wexford, Independent)
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Mr. Hogan is not going to run the clock down on me. He has been before the committee previously in respect of densities. Viability is the biggest issue we have today.
Verona Murphy (Wexford, Independent)
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I have pointed out pretty clearly to Mr. Hogan where my cost-benefit analysis is. What is the Department’s most recent cost-benefit analysis of what it says is Croí Cónaithe and all these other schemes?
Verona Murphy (Wexford, Independent)
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Why did the UK move away?
Verona Murphy (Wexford, Independent)
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It is true.
Verona Murphy (Wexford, Independent)
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I have undertaken a study from a university under research that shows exactly why they moved away from it.
Verona Murphy (Wexford, Independent)
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Who can purchase an apartment-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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I ask the Deputy to allow the witness to answer the question.
Verona Murphy (Wexford, Independent)
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The answers are only gibberish.
Mr. Paul Hogan:
The Deputy has asked several questions now, so she might let me answer. First, in the UK, they have not moved away from density standards or lowered densities. What they have done is remove caps, so instead of having a band or range like we do, they have taken that away for performance-based standards-----
Verona Murphy (Wexford, Independent)
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Who decides on the densities in the UK?
Verona Murphy (Wexford, Independent)
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The local planning authority, not a planning regulator.
Verona Murphy (Wexford, Independent)
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It does not matter. The local authority decides, does it not?
Verona Murphy (Wexford, Independent)
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Who decides here?
Verona Murphy (Wexford, Independent)
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When we are developing a county development plan under the planning policy we currently have, who decides?
Verona Murphy (Wexford, Independent)
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When the county development plan is devised, that is the hierarchy. My point is that the content that goes into the county development plan is devised by the Custom House, that is, the person who is now the Planning Regulator.
Verona Murphy (Wexford, Independent)
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It is the case, and he is also someone who tried to tell me minimum densities were in legislation. They are not, are they?
Verona Murphy (Wexford, Independent)
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Will Mr. Hogan answer the most recent one because it is more pertinent? Are minimum densities-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have gone over time and I have to allow-----
Verona Murphy (Wexford, Independent)
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I have to get an answer to that. Mr. Hogan needs to answer.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There are two questions.
Verona Murphy (Wexford, Independent)
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One question relates to whether minimum densities are contained in legislation.
Mr. Paul Hogan:
When we did the national planning framework, we looked at the cost of sprawl and dereliction versus alternative scenarios. The scenario we chose was 40% development nationally within the existing built-up footprint of towns and cities. That is compact growth. It is not even half, at 40%, and that is based on research we access from Canada and Australia, where the levels of growth are similar to that in Ireland, that demonstrated that the long-term cost of sprawl is twice that of more compact forms of growth-----
Verona Murphy (Wexford, Independent)
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Canada and Australia.
Mr. Paul Hogan:
The reason research in those countries is relevant is that they have similar legal systems, similar levels of growth and similar levels of apartment development in urban areas. We have three to four times fewer forms of housing than the European average. We are way off anything that is typical elsewhere-----
Verona Murphy (Wexford, Independent)
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That is because we also have more homeowners than any other country in Europe, if the Department had considered that. This is the final question I want answered. Are minimum densities contained in legislation?
Verona Murphy (Wexford, Independent)
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It is a "Yes" or "No" question.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have gone over time.
Verona Murphy (Wexford, Independent)
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Mr. Hogan needs to answer.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I want to get an answer for the Deputy. Are the densities contained in law? "Yes" or "No".
Verona Murphy (Wexford, Independent)
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That means they are not in law, does it not?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Are they not in law?
Verona Murphy (Wexford, Independent)
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The answer is "No".
Alan Dillon (Mayo, Fine Gael)
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Given the serious housing crisis we face and the failure to spend the allocated housing budget, resulting in a total of €382 million having been returned to the Exchequer over the past four years, what specific programmes of expenditure contributed to this underspend?
Alan Dillon (Mayo, Fine Gael)
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Will Mr. Doyle give a breakdown for the different programmes in which there has been an underspend? How does the Department plan to rectify this when setting capital budgets in the future?
Alan Dillon (Mayo, Fine Gael)
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It seems the Department is setting unrealistic targets. It is failing to deliver year on year.
Mr. Graham Doyle:
We are trying to set high and challenging targets because there is a need out there. Everybody has referenced that need. In conjunction with our colleagues in the Department of Public Expenditure, National Development Plan Delivery and Reform, we negotiated for, and were provided with, significant capital funding. The issue has not been trying to take away finance. The issue is actually getting the units built.
Alan Dillon (Mayo, Fine Gael)
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Of the €382 million, what proportion in 2022 was the highest contributor to the underspend that was surrendered back to the Exchequer?
Alan Dillon (Mayo, Fine Gael)
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What did that comprise?
Alan Dillon (Mayo, Fine Gael)
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In terms of affordable housing schemes, what figure was surrendered back to the Exchequer?
Alan Dillon (Mayo, Fine Gael)
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Yes, I ask Mr. Doyle to expand on that.
Alan Dillon (Mayo, Fine Gael)
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What lessons has the Department learned from that underspend and what measures has it put in place in the capital budget for 2023?
Alan Dillon (Mayo, Fine Gael)
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Will Mr. Doyle outline specific measures?
Mr. Graham Doyle:
We have issued standard design specifications, which we are now making mandatory. We have planning and development regulations. We have the temporary exemption from Part 8 requirements in 2023 and 2024. We have a single-stage approval process that we are moving to a complier explain process. We have pre-submission funding for site condition surveys, the lack of which is something that was delaying output.
Alan Dillon (Mayo, Fine Gael)
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Has the Department met all its capital budget targets to date for 2023?
Mr. Graham Doyle:
The tracking of spend this year is 30% to 50% ahead of what it was this time last year. That is what we are seeing to date. We still have this issue of when housing will be delivered over the course of the year. To date, we are tracking at approximately 30% to 50% on some programmes.
Alan Dillon (Mayo, Fine Gael)
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What impact will that have on housing delivery for this year?
Alan Dillon (Mayo, Fine Gael)
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What is the target?
Alan Dillon (Mayo, Fine Gael)
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What is the target for affordable housing?
Alan Dillon (Mayo, Fine Gael)
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A total of 1,800 affordable homes were delivered in 2022. How does Mr. Doyle realistically expect to hit 5,500?
Mr. Graham Doyle:
From a standing start, there is no question there is a huge challenge in trying to develop the pipeline in affordable housing, particularly given the challenges that have faced us since those schemes were developed. We have tried to adapt them to give more delivery and build a greater pipeline. As I said, the pipeline on the social housing side is good.
Alan Dillon (Mayo, Fine Gael)
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It goes back to the local authority affordable schemes. Unless we get all local authorities delivering at scale and setting realistic targets, we absolutely will never reach more than 5,500 affordable homes. That is the message I feel is coming loud and clear from Mr. Doyle.
I move on to the defective concrete blocks scheme. A total of €40 million was allocated for the scheme in 2022, but only €9 million was paid out due to delays in approval. What challenges have led to such delays in approvals and completions of work?
Alan Dillon (Mayo, Fine Gael)
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Given the issue primarily is arising in Donegal and Mayo, how many applications have been approved for those counties to date? My final question is on the Department's engagement with the respective county councils and how it intends to ensure affected homeowners are aware of the schemes and that any potential barriers homeowners may encounter in availing of the schemes are removed.
Mr. Graham Doyle:
In Donegal, the recent figures show there are 1,242 stage 1 applications, of which 658 have been approved. In Mayo, there are 310 applications at stage 1, 290 of which have been approved. At stage 2, there are 143 applications in Donegal, of which 83 are already approved. In Mayo, there are 85 stage 2 applications, of which 69 have been approved.
Alan Dillon (Mayo, Fine Gael)
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I thank Mr. Doyle.
Catherine Murphy (Kildare North, Social Democrats)
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I want to pick up on the points raised by Deputy Brady and the Cathaoirleach in regard to the National Building Control and Market Surveillance Office. We have a history of self-regulation that has been disastrous. We pay for failure but we will not pay to prevent failure. When the witnesses talked about the 100 building control staff in local authorities being part of this process, I nearly laughed. They are not doing the same thing as the staff in the National Building Control and Market Surveillance Office. Building control in the local authorities typically involves engaging with the developer when a housing estate is being built, making sure the services are being provided and things like that. They will have a bit of an overview but a lot of what they do is a paper exercise in regard to compliance. We would need an army of inspectors to stop the issues we are discussing from happening.
Local authorities never had a responsibility for the quality of building blocks or whether, for example, what was being taken out of a quarry contained pyrite. That is where the National Building Control and Market Surveillance Office is involved. It is a totally different thing. It seems there is more consumer protection when buying a bag of crisps or a packet of biscuits than when buying a home. That is because we rely on self-regulation. We are still at the point where we will pay a price in the future for not having a standard. Inspections have to happen as the buildings are being constructed. A lot of the building defects during the Celtic tiger happened because shortcuts were taken by builders and developers and despite the fact engineers are supposed to be legally obliged to sign off on things and have an indemnity. I did not see any real challenges taken in respect of that. It just does not seem to me that any significant lessons are being learned on this.
I had reason to go to the National Building Control and Market Surveillance Office recently when it was brought to my attention that some of the material being taken out of a quarry in my area could lead to problems with defective materials finding their way into the construction sector. As I said, that function is an entirely different thing from what the local authorities do. I have to say that the way the issue was handled by the office was not entirely satisfactory. It was very obvious to me that there was a really serious gap. I am not reassured at all by what has been said here today that we are not going to end up with the use of some material whose name we have not yet even heard emerging as a problem in another five years. Instead of preventing failure, another €3 billion will have to be thrown at failure.
When the Department comes back to the committee with information, will it include what initiatives are being taken to deal with preventing failure in the future? We passed legislation. We may end up with a national buildings regulator, but if that person does not have the resources to do the job, we will have a problem in the future. We must stop doing this to ourselves. Will the Department please come back with something comprehensive on this?
Catherine Murphy (Kildare North, Social Democrats)
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The replies Mr. Doyle gave earlier and the experience of the National Building Control and Market Surveillance Office do not fill me with confidence. Will he give us a ballpark idea of how this will work, without confusing the issue of the building control from a local authority perspective and the regulation of the materials, which is an entirely different thing?
Catherine Murphy (Kildare North, Social Democrats)
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I will make a second point about the underspend, which was primarily in the area of social housing. If the Department had that level of underspend, it would have been scrambling to reduce it as much as possible. Did that lead to such things as more leasing or more turnkey properties being purchased to minimise the underspend?
Catherine Murphy (Kildare North, Social Democrats)
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Okay. Does the Department accept that if the local authority does not deliver, design and build by bringing in builders - I am not saying it will have an army of builders - but buys and leases, that has a bearing on houses that would otherwise traditionally be for sale by driving prices up because one sector is underperforming. This area must perform. Does the Department accept that has an impact on the price of houses?
Mr. Graham Doyle:
We have tried to avoid that in the sense that we do not want the provision of social housing through the local authorities to compete with the private sector so we have tried to manage it in a way that prevents that from happening. Many people were anti-turnkey properties, for example, a few years ago for that reason. It was happening more than it is now. On the turnkey property side, we have tried to encourage a situation where a local authority can deliver in areas it does not have land and housing is required and where houses would not otherwise be built. That is the philosophy behind it now too.
Catherine Murphy (Kildare North, Social Democrats)
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I must say that is not the profile in Kildare. There have been a lot of turnkey properties.
John Brady (Wicklow, Sinn Fein)
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Mr. Doyle will be aware of the crisis in the retained fire service and the unfortunate circumstances that have led to retained firefighters being forced to initiate industrial action, which will start next week on 6 June. It will quickly escalate from there to a rolling strike from 13 June and an all-out strike from 20 June unless meaningful solutions are found to the crisis in the retained fire service. These issues did not only emerge in the past year or two. They have been there for many years. Does the Department believe there is a recruitment and retention crisis in the retained fire service?
John Brady (Wicklow, Sinn Fein)
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I am aware of that. I will get to it in a minute. The Department believes there is a recruitment and retention issue.
John Brady (Wicklow, Sinn Fein)
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It was stated at the Chief Fire Officers Association conference last year or the year before that the retained service is simply no longer fit for purpose. Is that a view shared by the Department?
John Brady (Wicklow, Sinn Fein)
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The report Mr. Doyle referred to, which I think was published in December, makes 13 key recommendations. I am not sure whether Mr. Doyle is aware of the recommendations.
John Brady (Wicklow, Sinn Fein)
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All have been accepted. Okay. Mr. Doyle will be aware that the breakdown in negotiations between the Local Government Management Agency, LGMA, and representatives of the retained fire services a couple of weeks ago was because of a failure to move forward on some of these recommendations around remuneration. Am I correct in saying that?
Mr. Graham Doyle:
It is probably fair to say there has been good progress, good engagement and good pending progress on many of the recommendations. Pay will always be the most challenging area in any industrial relations, IR, situation or any negotiations. That is the one that is escalating at this point.
John Brady (Wicklow, Sinn Fein)
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I believe agreement was reached in principle, and on foot of that, the LGMA put a proposal to the Department of Public Expenditure, National Development Plan Delivery and Reform. That is where the problem arose. That Department essentially refused to provide funding to implement what the LGMA proposed and what came out of the negotiations.
Mr. Graham Doyle:
I understand the importance of this issue, but the importance of trying to get a resolution to this issue will also be there in the coming days. I am anxious not to say anything that inflames the situation. All parties have signed up to industrial relations mechanisms and we encourage that they be gone through.
John Brady (Wicklow, Sinn Fein)
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As it stands, negotiations have broken down. Firefighters will initiate industrial action stemming from a vote they took last year when more than 90% of them said "enough is enough". That stemmed from the results of a previous survey of firefighters that stated 60% of them do not see a future because of the work-life balance and all the other issues. As we currently sit here, negotiations have broken down. Are there plans for negotiations to recommence?
John Brady (Wicklow, Sinn Fein)
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Is Mr. Doyle aware of the proposal for funding that went to the Department of Public Expenditure, National Development Plan Delivery and Reform?
John Brady (Wicklow, Sinn Fein)
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It would be useful if we could get some of the specifics. Essentially a figure has been put on bringing the retained fire services into the 21st century. Ultimately, that is what needs to happen. It would be useful if Mr. Doyle could get the proposal that was brought to the Department of Public Expenditure, National Development Plan Delivery and Reform, including the cost of the implementation of the 13 recommendations and furnish it to the committee. Some of the recommendations do not have any monetary implications. This report is six months old. Has work commenced on the implementation of any of those recommendations?
John Brady (Wicklow, Sinn Fein)
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Unfortunately-----
John Brady (Wicklow, Sinn Fein)
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Unfortunately, the issue of the retained fire service has not been given priority by the Government. In my constituency of Wicklow in 2005, the station officer, Mr. Brian Murray, led a walkout of the fire station in Bray citing huge issues within the service. He said that someone would die because of the major issues there and a year later, himself and his colleague, Mr. Mark O'Shaughnessy, both died tackling a blaze. I contend that was because of the failures within the retained service. Firefighters are saying that things are worse today than they were at the time of that walkout in 2005. Unfortunately, here we are again. Due to the consistent failure to deal with this, firefighters have been forced into taking industrial action, leading to full strike action.
Meaningful measures, including financial measures, must be taken. It is totally unsustainable for a firefighter to be on call for 365 days a year, 24 hours a day and to be confined to living within a 2.5 km radius of a fire station. It simply is not sustainable for a basic firefighter to be on a retained salary of €8,000 to €9,000 per year. Nobody would do that. It is well below the minimum wage. There needs to be a sense of reality here from the Government and the Department. They have to understand that without a financial package to bring the retained fire service into the 21st century, there will be serious problems in terms of the safety of firefighters and members of the public. There needs to be meaningful engagement immediately. The Minister, in fairness, said that he wants this issue to be addressed but the failure to do so rests with him and the Department of Public Expenditure, NDP Delivery, and Reform. Unless the money is put in place, we are going to be back here again and again.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I agree with the Deputy on that. One person with whom I am acquainted who is a firefighter in a small station has told me that some crews are down to five or six members now. They are not able to recruit new members. There are posters outside the stations trying to recruit people. This individual told me that one of his children got first communion and there was a meal afterwards. The numbers are so depleted now that he is on call 24-7, 365 days a year and it has been like that for himself and his colleagues for years. He had to get up and go during the meal. The pager went off and he had to get up and leave. There is a practicality there. Furthermore, employers are not as well disposed as they were in the past to staff walking off the job to fire fight. A firefighter could be working in a local garage, for example, and the pager goes off. I recall working with people years ago who were in the fire service and the employer tolerated it but the way things are now, they are not as tolerant of it. There is a real urgency to getting this sorted. I ask Mr. Doyle and Ms Connors to convey the sense of urgency around this to their respective Secretaries General. There is a safety issue, as well as equality issues.
I want to go back to the issue of housing targets on which this committee received correspondence very recently. While I accept that the officials are not responsible for this, various Ministers have said that the number of houses built by local authorities last year is the same as the number built in the 1970s but that is not the case. They did not come within an ass's roar of it. There were 1,666 units built by the local authorities, according to the Department's figures, and AHBs built 310 units under the two funding streams they use. That is what is on page 13 of the aforementioned correspondence. Essentially, 2,000 houses were built but only 1,666 were built by local authorities. The figure of 7,400 given is made up of turnkeys and units built under Part V, known as local authority Part Vs, LAPVs. AHBs are also using Part V. The use of turnkeys is obviously causing a problem for first-time buyers and so on. In reality, local authorities are building one fifth of what they were building in the 1930s and the 1970s. I want to address this issue with the officials. Part of the problem is the level of bureaucracy. I know that the Department has facilitated and funded extra staff for the local authorities but things are not moving at the pace required. The year before last, only 818 units were built by local authorities, according to the Department's figures.
We are not building at scale. I appeal to the Department to address this. I do not want to hear the officials to talking about uniform standards and so on. We need a uniform plan. The Minister was opening houses in County Laois a couple of weeks ago and I mentioned this to him. He opened a small scheme of ten houses in Ballyroan that included both semi-detached and terraced units. Why is it that the plans used there cannot be used elsewhere with the agreement of the architectural firm that designed the scheme? I am just giving that as an example. There is also a group of 25 houses in Durrow, and a number of other schemes in the county, including on Harper's Lane in Portlaoise. We are talking about terraced houses, some of which are high density while others are lower density. Why can those plans not be mass produced? Why can the architects not being given royalties and their designs reused? Why is that not being done? I have raised this issue with the Department previously. If we want to do something at scale, we have to mass produce. That is true for anybody who ever made anything. Let us take the example of a carpenter making a table. If we give him a different design for each table that we want, he is going to be very slow. If we give him a standard design and ask him to produce 100 tables, he will turn them out like hot buns once he gets to the 20th or 30th table. It is the same with local authorities and builders. If builders are trying to work off a different plan each time, progress will be slow.
I have checked with various local authorities since I last raised this issue and the figure coming in for fees to architectural firms is 11% plus. Before we even start negotiating the cost of building, we have between 11% and 14% of the budget - hard-earned taxpayer's money - being whittled away on architectural fees for design. Why are we doing this to ourselves? Why are good-quality units not being mass produced? The units in any of the schemes that the Minister visited that day could be replicated in any town or city. It is possible to do high density with them. Some of the four schemes he visited are high density while others are lower. Why is that not being done in the interests of cost and speed?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I have been arguing this for nearly two years. Mr. Doyle says we are moving in that direction but surely to God we should be just doing it. I cannot tell him which architects designed the schemes. There may even be better schemes somewhere else in the country but these looked to me like very good schemes. I have been in the houses, which are A-rated. There are also apartments in some of the schemes. They are lovely.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What are the issues?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Doyle, please stop. They are being built on flat sites. Assuming that the sites can be serviced, what is the issue? There is a reason we were able to build at scale in the 1970s. I am not arguing for the same type of housing that was built then because we have moved on. Mr. Doyle and I agree on that. A-rated houses are now being built. The local authority houses that are being built now are of a very high standard. They can be heated with a candle. In fact, the biggest issue now can be the need to let some heat out. They have triple-glazed windows and are very high quality. We must stop moving and just do it. They were able to do it in the 1930s even though the country was very poor and in the 1970s when there was an oil crisis and a recession in the middle of the decade. I remember that. I was working at the time. We were able to do it back then because we cut out the red tape and we built houses that were of a good standard for the time. We mass produced houses.
Why can we not do that now for both social and affordable?
Brian Stanley (Laois-Offaly, Sinn Fein)
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There are eight plans, though.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Between 11% and 15% is still being wasted on architectural fees.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Doyle is talking about modular.
Brian Stanley (Laois-Offaly, Sinn Fein)
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That is fine. Modular is appropriate and some are going to be built very near my area in the very near future by Clúid. That is good. What I am saying is in regard to the standard of construction. I am not getting any comfort from what Mr. Doyle is saying in regard to straight builds by local authorities, which design and build and bring in contractors to do it. Why can we not use the same plan? Why can we not encourage Clúid, Respond and the other approved housing bodies to do the same thing?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I would like answers to this.
Mr. Graham Doyle:
We have given a range. We have not given one. We have not said, “Go out and produce just this kind.” We have given a range in terms of our design manual. We are now making that design manual mandatory. What we are saying is that they will be quicker through processes, it will cut out fees and this is more efficient, and we are now making that mandatory with the local authorities. We are not going as far yet as just saying, “Produce this box.”
Brian Stanley (Laois-Offaly, Sinn Fein)
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Why not? There is the plan. I would bet anything that if we said to the architectural firms that design any of those that there is a royalty of a modest fee for each one that is built around the country, the very same as when people are selling records, we would get-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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I know it is different. Mr. Doyle knows that the gist of what I am saying is that each time their plan is used, they would get a modest royalty. That is all I am saying.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What is the argument about using a uniform plan? I know there would need to be maybe ten different types for ten different family types, disability, elderly people, urban, rural, high density, low density, semi-detached and terraced - I understand that. Mr. Doyle still has not come back to me to say why this cannot be done. That is all I am asking him.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I want the Department to mass-produce. If we want to build them at scale, if we want to get 15,000 or 20,000 social, affordable and cost-rental units, preferably 20,000 or more, we are going to have to mass-produce. Does Mr. Doyle not agree? We cannot do it as it is. There were 1,166 built by the local authorities and 310 by the approved housing bodies, AHBs. That is all there was. Those are the figures that Mr. Doyle gave me and that the other members of the Committee of Public Accounts got. It is minuscule.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I know, but that is when we add turnkeys, Part Vs and everything else into it as well. That is how we get the 7,000 but that is taking some out of the private market.
Mr. Graham Doyle:
There is a huge initiative now across Government to try to bring modern methods of construction, in particular, into our procurement systems, into really kick-starting that industry so we see those speed gains in particular. It is not really a price or cost gain at the moment but there is a speed gain.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Would it be possible for Mr. Doyle to prepare a paper for the Oireachtas and the Minister to say why we can do what I am proposing or why we cannot? Is that possible? I am not telling Mr. Doyle what to do but I would love to see it. I know in my heart-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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But there is the cost, the delays and the time. I have a final question on the AHBs. We had a long conversation the last time Mr. Doyle was here and we had the regulator, Susanna Lyons, here. I spoke to Ms Lyons again recently. An annual sectoral analysis came out which is a very useful document. It states:
Future Intentions of AHBs
The annual monitoring programme sought information relating to the future intentions of AHBs, including their intention to register with AHBRA, mergers, stock transfers and considerations relating to applying for cancellation.
345 AHBs (89%) indicated that they intend to register...
A lot of these are now coming out of the mortgage period. I only had a very quick look at this document but my understanding is that the AHB now owns the property, the loan has been redeemed and it is out of that mortgage. A total of 89% of them said they intend to retain AHB status. I want to know what happens to the other 11%. What happens to these houses and apartments that are out of the loan period or finance period? Is the AHB free to do what it likes with that house? The taxpayer built the house. That is what I am asking Mr. Doyle.
Mr. Graham Doyle:
That is exactly the issue we are trying to address at the moment in terms of what happens with those unencumbered units. As the Chair knows, there is a group that is trying to address this with the AHB sector. A total of 95% of them have charitable status. The regulator is now in place. What we are now seeing-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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They can change the status to a limited company. They could register with the Companies Registration Office, CRO.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I gave the example to Ms Lyons on the previous day of one case where a private company is now dictating to the tenants that the rents are going up. By the way, since I last spoke to Mr. Doyle about it, more of the tenants have been forced to apply for social housing. It is social housing they are living in, built with taxpayers’ money on a site previously owned by the nuns or by the church. The problem is that they are now being told they must apply for RAS or HAP, and some of them have been sent to the local social welfare office to claim rent supplement. I have been dealing with this with an official in Mr. Doyle's Department, Mr. Roger Harrington. I ask Mr. Doyle to speak to him again today to raise this.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I ask him to liaise with the regulator.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I spoke to her last week about this. What I am concerned about is that 11% of AHBs have not come back yet. The percentage of properties is another day's work. What we are all watching, and I hope the Department is watching, is what happens to those houses when they are unencumbered from a financial point of view. Are AHBs going to be in a situation where they become private landlords? I have given Mr. Doyle one concrete example. As Secretary General, I appeal to Mr. Doyle to do this. A lot of the tenants of that little scheme I am talking about in County Laois are vulnerable people. There are people with serious health issues, some have mental health issues, they are all very elderly, some are very frail and some are actually bedridden. It is a very important point that somebody from a private company can show up at their door in the past year and tell them their rent is going up 60%.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Will Mr. Doyle please express my appreciation to Mr. Roger Harrington and ask him to continue his efforts with the regulator to get on top of it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The senior executive officer, SEO, in the housing department in Laois County Council is also on the case.
That brings us to the end of our questions to the witnesses. I thank Mr. Doyle and the staff of the Department, and Ms Connors from the Department of Public Expenditure, National Development Plan Delivery and Reform, for preparing for this meeting. I also thank the Comptroller and Auditor General and his staff for attending and assisting at today's meeting.
Is it agreed that the clerk will seek any follow-up information and carry out any agreed actions? Agreed. Is it also agreed that we note and publish the opening statements and briefings provided for today's meeting? Agreed.
We will suspend until 1.30 p.m., when we resume in public session to address correspondence and any other business of the committee.