Oireachtas Joint and Select Committees
Tuesday, 30 September 2025
Joint Oireachtas Committee on Housing, Local Government and Heritage
Peter McVerry Trust: Discussion
2:00 am
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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We have received apologies from Senator Pat Casey. I advise members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings.
The serious financial and governance issues at the Peter McVerry Trust are matters of considerable concern to the public and the Oireachtas and have given rise to questions about oversight, accountability and the use of public funds. This crisis has led to the taxpayer having to support the Peter McVerry Trust's vital housing services by means of a €15 million loan facility provided by the Department of Housing, Local Government and Heritage. Today, I am pleased that we have the opportunity to consider this and other related matters further with the following representatives from the Peter McVerry Trust: Mr. Tony O'Brien, chairperson; Mr. Niall Mulligan, CEO; and Ms Noelle Woods, director of nursing, addiction, IPAS and housing first.
Before we begin, I wish to explain some limitations to parliamentary privilege and the practice of the Houses with regard to references 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. Witnesses are reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of that person or entity. 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.
The opening statement has been circulated to members. To commence our consideration on the matter I invite Mr. O'Brien to make his opening remarks on behalf of the Peter McVerry Trust.
Mr. Tony O'Brien:
Cathaoirleach, Deputies and Senators, thank you for the opportunity to attend. On behalf of Peter McVerry Trust, I fully and unreservedly acknowledge the serious financial and governance issues within the organisation in recent years. These are both governance and regulatory compliance failings at the most serious end of the spectrum. They have understandably raised serious concerns about oversight, accountability and the use of public and other funds. We understand the gravity of these issues and the responsibility we have accepted to restore confidence in the Trust and align with regulatory standards.
In November 2023, when the full extent of the crisis became apparent, exceptional Government funding of €15 million was provided to us through a loan facility. We are very grateful to the Department of housing and, ultimately, to taxpayers for that support, which enabled the trust to continue to provide services to those most vulnerable in our society. As part of the loan arrangement, the trust is working with the Department to transfer unencumbered assets, such as housing units and vacant properties, to local authorities. That process is under way. We are fully committed to repaying the value of the loan in full.
We appear before the committee today with a clear and sincere commitment to transparency, accountability and reform. Under a new CEO, an enhanced senior management team and a newly constituted board of directors, we are actively addressing past shortcomings and implementing robust systems to ensure such failures cannot happen again. The issues identified related to weaknesses in financial oversight, internal controls and governance processes. Since early 2024, the trust has been undertaking extensive work in rebuilding the organisation and implementing fundamental changes across management and internal structures, including appointing new senior leaders and experienced managers in finance, assets and facilities. We have introduced the strengthened governance framework, and our financial systems have been overhauled, with new controls, reporting mechanisms, and external oversight to ensure best practice is embedded at every level.
We have ongoing and detailed engagement with the Charities Regulatory Authority and the Approved Housing Bodies Regulatory Authority. We continue to meet regularly with the Department of housing’s oversight group. These engagements are constructive and play a vital role in shaping the reforms we are implementing. As of today, the trust is addressing issues of compliance and is committed to achieving excellence in regulatory compliance. I need to make it clear, however, that we are not there yet. This work will continue for some time.
Turning to the trust’s operations, during this period of change, our dedicated staff have continued to deliver vital services to some of the most marginalised individuals in Irish society. Their professionalism, compassion and resilience have ensured that those who rely on the trust have continued to receive the supports they need. The continuity of care and support provided by our front-line staff is a testament to their unwavering commitment to the values that have always defined the work of the trust. Across our services, we are supporting 714 adults, 55 young people, and 229 children experiencing homelessness, providing wraparound supports to 1,564 tenants, educating 45 young students through our learning centres and working with over 100 individuals to help them overcome addiction and rebuild their lives. These numbers reflect not just the scale and diversity of service provision, but also the human impact of our work in line with the underpinning ethos of the trust.
We are grateful for the continued support of the Department and all our funding partners. Their assistance has been essential in enabling us to maintain these critical services during a period of significant internal change. We also acknowledge the support and patience of our wider stakeholders, including service users, staff and the public, as we work to regain people's trust. Our priority is to continue to strengthen the organisation in order that we can be fully compliant and deliver our mission and core objectives with renewed confidence and credibility. We are committed to learning from the past, listening to our stakeholders, and embedding a culture of openness and accountability at every level of the organisation. As soon as we have completed the critical task of finalising and submitting our 2023 financial statements and annual report, we will seek an appearance before the Committee of Public Accounts to answer the questions of its members.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Thank you. I will now give members the opportunity to ask questions. I remind them that the time allocated is for both questions and answers, so they should allow time for the answers. Depending on numbers, we may have time to go around again, but I note that we received apologies from only one member.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank all those from the trust who are before us today for the work they do. It is obviously extremely valuable work, and it is well recognised and appreciated. We are here primarily to ask questions in respect of the exceptional funding that was made available in 2023. I ask the witnesses to be brief because the clock is against me.
How much public funding does the trust get on an annual basis and what percentage of its overall budget would that comprise?
Mr. Niall Mulligan:
We have an annual budget of about €60 million. In terms of percentages, the highest percentage would certainly be within the Dublin Region Homeless Executive, DRHE, the HSE and TUSLA, and there is a small percentage in the area of the Probation Service and other funders such as the Department of education.
Séamus McGrath (Cork South-Central, Fianna Fail)
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So, a very substantial part would be from public sources.
Séamus McGrath (Cork South-Central, Fianna Fail)
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What I am getting at here is in terms of the exceptional funding that was needed. Mr. O'Brien highlighted the internal control and governance issues.
For an organisation that is so reliant on public funding, it is extraordinary those issues issues of governance and control measures arose. I will move on.
The €15 million was required on an exceptional basis. Can Mr. Mulligan explain as briefly as he can why it was needed? Was it that the organisation overstretched? Was it that money was spent in the wrong areas? Was it that the money was wasted? Will he explain why the money was needed urgently and in that way?
Mr. Niall Mulligan:
If you look at the funding model of Peter McVerry Trust in the past, notwithstanding what I said about statutory funding, there was a heavy reliance on fundraised income, so anything up to about 30% of our services was funded from fundraised income. When there was a significant loss in fundraised income, that caused a cash flow difficulty within the trust. That is my understanding.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Why was there such a reduction in fundraised income?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay, so Covid was a factor but by no means the only factor. Mr. Mulligan points out clearly that there were governance issues, control issues and so on.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay. I will ask about the management team in place at the time. Obviously, there is a new chief executive in Mr. Mulligan. Were there other management members who were in place then who are no longer with the organisation, aside from the chief executive?
Mr. Niall Mulligan:
There has been quite a big change in the senior management team, particularly in the areas that are relevant to governance, financial management, assets and facilities – that particular part of our work. We have a new head of finance, a new CEO, a new director of assets and facilities, a new director of corporate services and equally, that is now reflected on the board.
Séamus McGrath (Cork South-Central, Fianna Fail)
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How did those changes take place? Did people voluntarily leave?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Was there a financial exit package for the former chief executive?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Prior to Mr. Mulligan.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Just be careful, Deputy.
Séamus McGrath (Cork South-Central, Fianna Fail)
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At the time of the management issues.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay. Mr. Mulligan does not believe there was any package.
Séamus McGrath (Cork South-Central, Fianna Fail)
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What was the €15 million put towards?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Mr. Mulligan stated that the trust intends to repay that funding. What is the approximate timeline for that?
Mr. Niall Mulligan:
As Mr. O'Brien mentioned in his opening statement, this is being done through the transfer of unencumbered properties. There are 27 due to be transferred over to Dublin City Council over the next two weeks, the value of which has been agreed at €7.9 million, and I think there are roughly a further 33 within the next two months. It is a process that is not always straightforward but it will reach to pretty much the €15 million. If there is a gap, then we will discuss that.
Séamus McGrath (Cork South-Central, Fianna Fail)
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In the coming months.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I thank the witnesses for coming in to the committee. This is an important session. The previous iteration of this committee had tried quite hard to get them and other players in to the committee last year. It is important to understand why we wanted to do that. We took a view as a committee on a cross-party basis that given the severity of what has happened in 2023, it was crucial that the public were made aware of exactly what had happened, but more importantly, what measures were being put in place to ensure it did not happen again either in the trust or in any other similar organisation.
I am conscious this is the first public appearance the trust has made and therefore I think the witnesses’ testimony is important for all the reasons they said, to demonstrate transparency, accountability and compliance. I would like them to tell us a little more around the nature of the serious financial and governance issues. I think the public has the right to hear from them the scale of those and in particular the thorny issue of how the trust underbid significantly for tenders and was then unable to fund those tenders and cross-subsidised capital funding for current funding.
I invite the witnesses to give us more detail about what systems have been put in place to ensure something like this does not happen again. There are two issues I am particularly keen to hear from them about. One is how it will not be possible to cross-subsidise in that manner in future. Second, there was a massive failure not only on the executive but on the then board. What measures are in place now to ensure that if there were problematic behaviours at an executive level – I know there will not be but if there were – we can be confident that the board as it is now constituted is fit to do the job that the previous board did not do?
Mr. Tony O'Brien:
I thank the Deputy. I understand absolutely his opening remarks about the importance of transparency. Not having been there but having read the various reports and having had access to the internal organisation, it is my opinion – I stress, my opinion – that there was a degree of non-strategic recklessness, if I can put it that way, about the rapid expansion of the organisation in terms of new projects and geographical reach. Internally, there were insufficient controls that enabled the then board to have a full understanding of the financial basis on which various bids were put in. The Deputy used the term “underbidding” and I think it is a fair term. There were unmatched costs, to use the public sector jargon. That was possible because the board did not have access to sufficient information at the time. It was not provided with that information. That comes through in the regulatory reports.
The new board, to which we are adding four additional members this evening at our AGM, has a much broader range of experience outside just the charitable sector and has put in place processes that are contemporary governance standards so nothing gets approved by the board without full transparency. Obviously, the board is very conscious of the legacy the trust has had but Mr. Mulligan and his colleagues have also worked very hard, together with the new director of corporate services, to make sure that the board is fully informed. In addition to that, we have new external auditors, who were not the ones in place at that time, and we have very direct and ongoing engagement with our regulators and with the Department of housing through the oversight groups. The whole series of checks and balances have been put in place reflect the failings of the past and seek to avoid them.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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At the centre of this is a funding mechanism for the homeless services sector that combines a mixture of a deficit funding, where organisations can bid for only a portion of the full cost, and competitive tendering, where there is quite a competitive environment. Would it be fair to say that funding mechanism created an environment where some of the things that transpired were enabled or made possible? They were ultimately the responsibility of the people within the executive who made those decisions, but if a different funding model or a more controlled funding mode had been in place, would it have been more difficult for the kinds of abuses that the two regulators reports have outlined to occur?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I agree with Mr. O’Brien on that. On that last point, what kinds of extra protections could have been put in place or should now be in place to make it virtually impossible for such behaviour to be repeated?
Mr. Tony O'Brien:
I can only speak for this trust but obviously, the regulators will look through and apply lessons from this trust to other bodies. An appropriate costing model for all bids that is transparently reflected to the governing body, the trustees in this case, and which is capable of interrogation by those awarding the contracts, is necessary in order for all parties to be satisfied that there is not going to be a crash down the road. Clearly, sustainability is absolutely critical in all these contract awards.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Does Mr. O'Brien think the same level of investment should take place at a Department level? He had considerable experience prior to taking on this role. Does he think there should be the same level of assessment by the Department when assessing the costing gap he spoke about?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Yes, but it sets the rules within which the local authorities award the contracts.
Rory Hearne (Dublin North-West, Social Democrats)
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I thank the witnesses for their presentation. In the context of sustainability of funding for services, the level of money that comes from donations was mentioned. What is the status of donations relative to the past two or three years? Has there been a significant fall?
Rory Hearne (Dublin North-West, Social Democrats)
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Does that leave the Peter McVerry Trust in a situation with regard to the viability of services? I imagine contracts were entered into and the whole model, as Deputy Ó Broin mentioned, is based on charities being able to provide a certain amount of their own finances through donations.
Mr. Tony O'Brien:
What happened in the trust has had a significant impact on perceptions of the viability of the model. The Peter McVerry Trust is no longer in a position to do that meaningfully. Since 2024, the funding arrangements affecting the trust have reflected that changed circumstance. We are currently in the finalisation process of the financial arrangements of the trust for 2025 and again, they reflect the reality that the costs incurred in providing services for public bodies need to reflect the true cost of them. It is obviously of benefit for additional services the State would not be in a position to fund, or which do not match State priorities, to be provided by way of fundraising, but there needs to be a clear distinction between what is funded by public funds and what is funded by charitable funds. Cross-subsidisation is not really a viable mechanism because it is too vulnerable. It was vulnerable in the case of the Covid-19 pandemic and it is vulnerable in the event that anything undermines public confidence in giving. The trust has not returned as yet to seeking to raise significant amounts of public funding because it would be unrealistic to do so before publishing the 2023 accounts and being as transparent as we need to be with anyone who seeks to give funds about what will happen in the future.
Rory Hearne (Dublin North-West, Social Democrats)
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Does Mr. O'Brien think part of the reason the Peter McVerry Trust reached this crisis point is the pressure to provide emergency accommodation and a response to homelessness on a huge scale and that the State has essentially outsourced that to charities? It has been relying on charities fundraising, rather than paying the full cost.
Mr. Tony O'Brien:
Clearly, there are two significant backdrops. One is the homelessness crisis we are still experiencing and the other is the historical development of a wide range of charities to provide a wide range of social and care services. There is a general acceptance now that services procured by the State need to be fully funded by the State and the State has moved dramatically in that direction. Unfortunately, the experience of the Peter McVerry Trust is one of the reasons that has been understood to be a necessity. There is also a huge value in those entities having the capacity to raise funds to do additional things the taxpayer would perhaps not wish to fund.
Rory Hearne (Dublin North-West, Social Democrats)
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Absolutely, and they play an absolutely key role in providing many services, as the Peter McVerry Trust does. We are all concerned that those services be provided to people, including emergency accommodation and the huge number of other services the trust provides. It is important that people remember that. That is why it is unfortunate and upsetting for people that this happened because it was a breach of trust. There is concern about the most vulnerable people who are supported. Does the trust have concern about the long-term impact of that on its viability?
Mr. Tony O'Brien:
I do not have huge concerns about the ongoing viability of the trust because of the strategic changes and choices that have been made. However, we clearly need to get through this process of exposing or being transparent for which we depend on the publication of our 2023 accounts. We intend to be as accountable as is necessary to regain public trust. As I mentioned in my opening statement, we are not just seeking to become compliant. We are seeking to become an exemplar of compliance with the various standards that charities and approved housing bodies should be held to. Therefore, I believe that, at the end of this process, the trust will have an important future.
Rory Hearne (Dublin North-West, Social Democrats)
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Is there sufficient funding from the State to provide adequate safeguards and supports in emergency accommodation, particularly in family hubs for children and families?
Rory Hearne (Dublin North-West, Social Democrats)
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Concern has been raised about the services that are provided. The core issue was that funding was not sufficient to ensure that there were sufficient services, including enough social workers, support services, on-site support and so on. There were reports of family hubs having only one staff member. That was not particularly the case with the Peter McVerry Trust, but in others, especially private ones. Is the trust concerned about the standards and quality of emergency accommodation, especially family hubs, perhaps not those of the Peter McVerry Trust but in the wider system? Is it concerned that the funding is not sufficient to guarantee proper emergency accommodation that ensures the welfare of the people living there?
Ms Noelle Woods:
At any given time, it is important to remember that within the remit of social care collectively, there will always be a percentage of work that is being assumed by relief staff and otherwise across the services. I will speak a little generally about family services. We work towards the stakeholder requirements at all times as regards an adequate staff-to-participant ratio. On the needs - to be clear, I am speaking only about the Peter McVerry Trust - we work with a number of complex participants across the variety of services we deliver on a daily basis. We are constantly working towards ensuring we have the appropriate staffing and so on. However, there are simply not enough staff coming through third level colleges to fully support the rapid expansion of the sector collectively. It is a challenge not only for the Peter McVerry Trust but across the board.
Aubrey McCarthy (Independent)
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I thank the witnesses for being here today. I was devastated when the news broke about the Peter McVerry Trust and all the debacle that happened. I have known Peter for many years and I know the work the trust has done on the ground. He has been very disheartened for many years, both personally and with the organisation, so to see it being dragged into disrepute is a horrendous sight. Has there been accountability? Have there been any prosecutions or was it simply a matter of bad governance?
The housing first model was mentioned and Deputy Ó Broin highlighted how the pricing of the housing first model seems to greatly undercut a lot of competitors. Mr. O'Brien mentioned that 30% of the trust's income comes from fundraising. When the trust is budgeting for the likes of housing first, is fundraising part of that?
Aubrey McCarthy (Independent)
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In the past, was housing first priced on the basis of fundraising?
Aubrey McCarthy (Independent)
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I noticed that the 2023 accounts still have not been finalised.
Aubrey McCarthy (Independent)
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We have been dealing with this for nearly a year so it is surprising that the skates were not put on that.
I also noticed that housing first tenancies have fallen from 822 to 699. The emergency homelessness numbers and so forth have gone up, so the crisis is getting worse, yet the number of housing first tenancies has decreased. I am little worried about that because of the wraparound supports and so on. How are we safeguarding that?
Mr. Tony O'Brien:
Regarding the accounts, new auditors were appointed a little less than a year ago. I became chair in May, at which point some of the work had begun. I will be completely honest; it became apparent that we needed to go back to first principles regarding the asset register of the organisation, that is to say the properties and so on. While that was already identified as an area of concern in the regulatory reports, the lengths that we have had to go to have been extraordinary. I used to be the Accounting Officer for the HSE and this has been by far the most difficult audit I have ever been involved in, which is saying something. We have had to go right back to original source documentation in order to develop an asset register that can be the basis of a comprehensive set of audited accounts. That has taken-----
Aubrey McCarthy (Independent)
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It was a rabbit warren with a lot of stuff that could not be got to. Is that correct?
Aubrey McCarthy (Independent)
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Okay, I am just a bit conscious of the time.
Mr. Tony O'Brien:
A lot of work had to be done and is now substantially complete. I have been advised by our auditors that we can expect to be in a position to be looking at draft accounts and therefore finalising our governance approach in the second half of October. Therefore, I am hopeful that we are only a matter of weeks away from filing those accounts, which is an important milestone for the organisation. I fully acknowledge that it is an unacceptable position for any charity to be in that it has not yet accomplished those accounts. Ms Woods will come in on the other questions.
Ms Noelle Woods:
Regarding housing first, it is noteworthy that at any given time we have tenancy breakdowns and ultimately that reduces the overall number of tenancies, which we report on a month-on-month basis. It is important to note that part of the tenancy breakdowns figure includes individuals who have unfortunately passed away within their tenancy. It also includes tenancy breakdowns associated with antisocial behaviour, etc. Within the remit of housing first, we work with an ageing cohort, so we have individuals who may have started off within a tenancy whose needs have changed, requiring them to progress to other, stable, long-term supported accommodation.
Another factor that has impacted the overall tenancy numbers is the hold on the creation of new tenancies. Without a doubt the need remains very urgent regarding the provision of tenancies under the housing fiirst model. In October of 2024 we ceased intake as we had been advised to put the creation of new tenancies on hold because we were in the tender process. Peter McVerry Trust was responsible for delivering on the intake component of housing first, which is a specific stream that supports individuals from the point of where they may be engaged in rough sleeping right up to the point at which they enter their home. As a result of not creating additional tenancies, I assume that the numbers are reflecting this.
Brian Stanley (Laois, Independent)
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My apologies for being late as I was caught in the Dáil. I welcome the witnesses. What has come to light in the reports so far is damning, to say the least. I know that efforts are being made to get on top of these issues. I hope this can happen and that the Peter McVerry Trust can get back on track. I know it has done good work in the past and that needs to be acknowledged as well.
Coming from down the country, I have a very hazy picture of how the trust operates and what it does. In recent years, the trust started operating in Laois. I do not expect Ms Woods to have the figures off the top of her head but she might come back to me with these. How many tenancies does the trust have in Laois and how many of them are tenanted at the moment? I would also like to know their locations and the nature of the tenure. Are they leased or are the purchased properties? I know the trust has ten leased from Respond in Gortinore, Abbeyleix, which I have a question about that in a minute. What are the other locations in Laois?
Another issue I want to mention is that trying to get in contact with somebody from the Peter McVerry Trust has been "Mission Impossible". I am not just speaking for myself as I know others have tried as well. It would be useful if we had a contact number. We may need to contact the trust every two or three years but we do not have a number. When the public cannot get a result they expect us to be able to talk to somebody. Communication is very important. Bad internal communication may have led to some of the problems the trust has at the moment. It does cause a lot of problems for us.
There have been some problems with the Abbeyleix operation. It has not been all bad but the biggest problem is that when there were problems, it was very difficult to get anybody to sort it out. The local authority might clarify this but as I understand it, the local authority generally puts forward tenants for the trust to accept or reject and generally this is agreed between the two bodies. Will Ms Woods confirm that this is operating? Because the trust is a charity it is a registered approved housing body because it is under examination by the approved housing body regulator so it is one of those. Are the trust's tenants coming with recommendation from the housing officer in Laois County Council or not? A short answer will suffice. For any questions that Ms Woods does not have an answer, let me know and she can send me the answers. I will be happy enough to receive them in a week or a fortnight.
Ms Noelle Woods:
I will answer the question just a little bit more broadly, for clarity purposes. Outside of Dublin, the Peter McVerry Trust delivers supports under the housing first programme in an additional ten counties in the midlands, the mid-east and the north east. In Laois, we have leased a combination of properties that are owned by the Peter McVerry Trust. We also have a number of properties that are provided by the local authority in which housing first supports are delivered directly.
Regarding the nomination process or the assessment process into the programme, the majority of individuals referred into the housing first programme come directly through the local authority. A small number of individuals may come from other areas, such as the Probation Service, but the majority come directly through the local authority.
Brian Stanley (Laois, Independent)
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So the Probation Service would nominate them to this?
Brian Stanley (Laois, Independent)
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I ask Ms Woods to come back to me with the breakdown of those figures and regarding the tenancies, who actually owns the premises, the number that are leased and where they are. Sometimes, when there is an issue with a house in an estate, no one knows who owns it. That can be a problem. I also ask for a contact number. It only has been once in the past five years that I could have done with a contact number for the Peter McVerry Trust in County Laois. Ms Woods can send this information to my email address.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Please provide Deputy Stanley with the breakdown for his own constituency.
Joe Flaherty (Fianna Fail)
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I thank the witnesses for being here. I commend them on taking on a very difficult challenge. Much of what we say here today does not reflect on the witnesses but what went before them. I ask them to help me to get some sense around some of the figures. We have a briefing document and the opening statement. This says that the trust's services are supporting 714 adults, etc. When I total those figures, I get 2,707 but then when I look at the briefing document it seems to be more. How many people does the trust support through all its services?
Mr. Niall Mulligan:
I can address this. I am not being facetious, but it will change on a day-to-day basis and we tend to work around that. At any one time we are supporting between 2,000 and 2,500 people, and that is adults, families, children and young people, across the broad range of our services, including our education services.
Joe Flaherty (Fianna Fail)
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Would it be maxed out at about 2,500?
Joe Flaherty (Fianna Fail)
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For the purpose of this, if I go with what was on the opening statement, it is 2,707 people and a budget of €60 million. It is costing €22,000 per person to run the service. To give a comparable example of a local authority, I would say that what the trust has to do is comparable with County Longford.
It has a population of 40,000 and, between revenue and capital a budget of €140 million but then, most astonishingly, there is still a staff of 716 people for 2,500 people. I know the service is picking up the pieces and trying to rebuild. I am ideologically opposed to charities and bodies doing this work, and perhaps the Government should do it, but we certainly do not seem to be getting good value for money. The total spend by Longford County Council per head of population is €1,600 yet it costs the trust €22,000, on average, per service user, to deliver that service. I appreciate that some service users have addictions so require more intensive assistance. However, the service has a lot of straightforward tenancies so there should be no problem. Longford County Council manages 2,200 tenancies. Did the trust benchmark itself against other bodies that provide these services? Do our guests admit that €22,000 per service user is an extraordinary figure?
Mr. Niall Mulligan:
I think we are benchmarked against other similar type of organisations in terms of our funding, staffing levels and ratios. As can be seen from the briefing document, there is a complexity of services that we offer. Some of our services need a ratio of more than two or three staff to one individual because of the complexity of their stay. For these individuals the staffing costs do not come cheap. Without delving into the mechanics behind the €22,000 cost, it is a broad mathematical equation piece.
Joe Flaherty (Fianna Fail)
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We will take the cost up with the Department but it seems to be a shocking figure. Can Mr. O'Brien tell me what is the total value of the asset register now that the trust has sweated it?
Joe Flaherty (Fianna Fail)
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Yes. On the unencumbered properties we are talking 27 properties and possibly another 33 coming. Do unencumbered properties make up 50% of the total properties that belong to the trust? What percentage are unencumbered properties?
Joe Flaherty (Fianna Fail)
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Are they individual units as opposed to an apartment development?
Joe Flaherty (Fianna Fail)
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Let us look at what I will call the cavalier period. Were we dealing with a small cohort of developers who came to the previous regime and dealing with them and doing deals? As the witnesses have forensically examined this, did they see the same names come up repeatedly?
Joe Flaherty (Fianna Fail)
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How many of the trust's units are vacant at the moment?
Joe Flaherty (Fianna Fail)
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Yes. The trust needs to know that figure. We challenge local authorities when they are in here to know their vacancy rates. Surely if the trust manages 1,000 properties and multiples of that in terms of units then the trust's officials should be able to come in here and tell us the vacancy rates.
Finally, the trust provides support for an IPAS centre in Longford. How much does the trust receive for that and what does that support entail?
Joe Flaherty (Fianna Fail)
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I would appreciate if Mr. O'Brien could tell us the vacancy rate before the close of the meeting.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I wish to advise that Deputy Eoin Ó Broin is taking Deputy Thomas Gould's spot.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I welcome the fact that Mr. Mulligan has said that going forward the approach will be a "full-cost recovery model", which is very sensible in my view. How many of the current services that the trust is contracted to provide operate under the old deficit funding model or are underfunded? Has Mr. Mulligan a sense of the scale percentage wise of the underfunding of those?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Even ones that might be pre-existing tender arrangements-----
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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-----or service level agreements?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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My next questions are on creditors. I refer to service providers who were not paid from the period of the crisis in 2023. Are there still outstanding creditors who have not been paid? I am not asking for individual creditors to be named. Do our guests have a sense of quantum of that and how that will be resolved, particularly as Mr. O'Brien said that a lot of the actual documentation is not as detailed as would be required?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Obviously I am not going to ask for any of the details of that. It would not be appropriate. It would be fair for us to ask, what is the total quantum of money that those creditors claim is owed to them?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Has everything else been resolved at this stage?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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No, no. I thank Mr. Mulligan for that.
One of the concerns many of us have is staff retention. One of the things that many of us experienced at a constituency level in the 18 to 24 months up to the summer of 2023 was already evidence of a high turnover of staff. Some of us thought that was individual projects or services. Of course it was much more systemic. Staff recruitment and retention is vital to provide the services to the folks who use the McVerry services now. Please give a picture of the current situation. Is it still a struggle to retain and recruit staff? How healthy is that looking at this stage?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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That was a very low base last year.
Mr. Niall Mulligan:
It is always a challenge anywhere, irrespective of where one works. I have worked in the charity sector for a long time and particularly over the last five to ten years, the challenge is out there, without doubt. The McVerry Trust, if one looks across the broad range of staff, quite a youngish cohort of individuals come to us maybe directly as graduates, etc. They would tend to stay two or three years and then move on for whatever reason. It is a challenge but we are used to that challenge.
On the crisis, yes, absolutely it has had quite a significant impact. We have lost some staff. Also, when we have tried to recruit for some key positions - in particular, our finance team was pretty decimated 18 months ago - it has been a challenge. We have got there. We have two vacancies on our finance team and we will soon appoint a director of finance.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Does Mr. Mulligan know how many vacancies there are across the organisation either as a number or a rough percentage of the staff complement?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I wish to express a concern which I am our guests are more aware of than I am. Given the very complex needs of the folks that the trust works with in respect of housing first and the very significant level of support required, a very significant level of vacancy in that service in particular would be quite a concern.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Is that something the trust shares? How is the trust trying to address that in the transfer of housing first to other organisations at a later stage?
Mr. Niall Mulligan:
I might ask Ms Woods to answer in a second. In terms of the wider piece, we have a strong relief panel, which we use a lot across our various emergency services. We have very experienced people on the panel.
That would be the norm in a lot of services but in terms of housing first specifically I will hand over to Ms Woods.
Ms Noelle Woods:
I will go back to the start. Our supported temporary accommodation, which accounts for a significant portion of our service provision, is over 85% in terms of our staffing complement, as in fully staffed. Our biggest challenge when we look across each different layer of provision actually lies in housing. We have been challenged particularly over the past year within the context of housing first in Dublin specifically. Throughout the period of the tender we have not been in a position to actively recruit. It has undoubtedly put additional pressures on the team collectively. We have been working with relevant stakeholders in and around this matter and certainly by no means are we naive to the complexity that comes within the cohort that is actually served under the housing first programme. Within the Dublin Region Homeless Executive, DRHE, the local authorities and otherwise, they have been actively supporting us in bringing in additional supports through other NGOs, and otherwise, to try to support the staff team on the ground.
It is also important to note that the process collectively with the tender has been challenging. It has been a significant factor that has contributed towards the ongoing reduction in our staffing complement in housing first.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I thank the witnesses.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I thank the witnesses for being with us here today. I would have appreciated the opportunity to question them in my role at the Committee of Public Accounts earlier this month. I should open by saying that the witnesses had indicated to us at that committee that they would be willing to come before us once the accounts were published. Can I take it that the invitation to come before the Committee of Public Accounts will be accepted?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay. Why were the witnesses willing to attend this committee meeting in advance of the accounts being published, but not to attend the Committee of Public Accounts?
Mr. Tony O'Brien:
Essentially, if you look at the terms of the invitation issued by each committee, naturally the PAC has a more arduous process in relation to what it requires its witnesses to do. We could not have met the obligations of that invitation had we accepted it in the situation where we did not have access to the finalised 2023 accounts. That is essentially the difference.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I would argue that the queries and questions this committee had in relation to this issue were very similar to the questions that will be put by members of public accounts committee. Perhaps we will discuss them when the witnesses come before that committee. That puts me in an invidious position in some ways because I am not clear as to the areas I should properly question the witnesses on. For example, I have significant questions about the restricted funds. I have questions on how the tax warehousing debt arose in such a significant way. I have questions about conflict of interest on the board. Are the witnesses in a position to answer those questions here today?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay. Let us start with the restricted funds. Will Mr. O'Brien put on the record what happened with regard to the restricted funds and why they found themselves in charity No. 3's possession?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Yes, from the religious order.
Mr. Tony O'Brien:
Essentially, my understanding is, having read the reports and the internal information, that at the time there were what might be loosely called cash flow pressures, which it was assumed would be resolved. It was a borrowing from Peter to pay Paul type of effort. Of course that all came to halt when the music stopped. Therefore, it was not possible to replenish the restricted funds.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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So, there were funds that were restricted by the nature of how they were donated to the Peter McVerry Trust?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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They were transferred to another entity which is known as charity 3 in some of the reports. That was done on a temporary or loan-type basis but I did not see any paperwork or documentation that suggested this.
Mr. Tony O'Brien:
What was done, first of all, was completely improper. Let us be clear about that. The reason there was insufficient documentation is because it was not done on a transparent basis internally within the organisation. It should never have happened. I can tell the committee that we are in the final stages of agreeing a remediation of all of that with the donor of those funds, which will satisfy them and bring the matter to a conclusion. We have not quite got there but we are very nearly there.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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In interpreting the answers is Mr. O'Brien suggesting that there was an attempt, deliberate or otherwise, to not provide the full information to the board on the nature of that transaction?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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On the conflicts of interest that arose, I think two family connections are referenced in the two reports. Does Mr. O'Brien accept there was conflict of interest that should have been declared and are arrangements in place to prevent that from happening again?
Mr. Tony O'Brien:
There were significant conflicts of interest that had not been declared at the time, which are a contributory factor, in my view, to all of the circumstances that we are now discussing. We have now moved to what I would call an up-to-date and contemporary method in relation to this, and conflicts of interest such as that should not, and I believe never will, happen again within the trust.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Is there any understanding as to why that happened? Was that a culture in the board or was it a lack of board-only time without staff there? Has Mr. O'Brien identified how that issue may have arisen?
Mr. Tony O'Brien:
You have to look at the way the trust emerged over time, which was before much of the contemporary regulation was put in place. Insufficient attention was paid to achieving compliance. I have spoken to other people in other approved housing bodies who spent up to three years preparing to be compliant when the regulations came in. That was not a feature of how the trust approached these matters. Things were excessively cosy, if I can use that term, and normal checks and balances were not put in place. That is how it arose.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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A sum of €15 million is an extensive amount of money for the Exchequer to shore it up but I want to put on the record the importance of having an organisation like the Peter McVerry Trust and the other approved housing bodies in the sector. If we are to deliver more output, we need public and private, and all the different tools that are available.
I will have an opportunity to discuss some of those matters further when the witnesses come before the Committee of Public Accounts. I just want to put on record the work they do and my appreciation for that work.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Before we go back around I just have a couple of questions myself. Will the witnesses give me a breakdown on the site in Longford - perhaps they can send this on to me - in terms of costs, staffing, contact details for the IPAS centre in Longford?
A comment was made on the number of properties and the vacancy levels. It is important. Prior to me being the Chair, in the previous Dáil, this housing committee brought in a significant number of local authorities with high percentages of vacancy levels. We want to get them down but there are always going to be vacancies at 1% or 2%. Maybe the witnesses could come back and tell us where they are with regard to those figures. If they are high, I would ask the witnesses to work on them to make sure they come down in line with local authorities across the country. That would be extremely important.
It was said that between €2 million and €2.5 million has not been paid. Is the Peter McVerry Trust in a financial position to make those payments should they need to be paid, pending whatever issues are sorted out? Is the trust holding back on those payments - we had the Department of housing here - in the full knowledge the trust is working with the Department with regard to that?
Mr. Tony O'Brien:
The reason for the holdback is not to do with cash flow or capacity to pay. It is to do with our lack of satisfaction that the moneys are due. Obviously the people who raised invoices have a different view. There may well have to be a process determined judicially to see who is right and who is wrong. Given that these are public funds, we certainly will not be paying over any funds we are not satisfied are completely due to be paid. We have been transparent, with our regulators, the Department and the regional executive in relation to those matters.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Should they be due, has the trust the capacity to pay them?
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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You mentioned you have your AGM tonight. It is a new start in the organisation. It was important that the witnesses came in here and, in fairness, they have answered quite clearly any questions that were asked. On my behalf as the Chair I wish you well going forward. It is refreshing to hear that all the properties up to the value of the €15 million that the State put in will be signed over and come back into the ownership of the State. It is quite important that this is done in a speedy fashion. I thank the witnesses.
We will now go back to members. They have one minute each if they are in and out quick. We will start with Deputy McGrath.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank the Cathaoirleach. A minute is short.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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The Deputy can stretch it to two.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank the witnesses for coming in. I have two points. Mr. O'Brien mentioned that donations and fundraising have fallen off a cliff. Is there a plan in place to try to restore that?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay. In relation to the tax liability of more than €8 million that accrued, is that now settled?
Mr. Tony O'Brien:
It is not settled as in there is still an outstanding balance, but it is being worked through in accordance with the agreement with the Revenue Commissioners. It was a tax warehousing under the scheme put in place during the Covid period. Again, that was done without full transparent disclosure to the board of the trust at that time.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay. Were penalties from the Revenue Commissioners involved in that?
Séamus McGrath (Cork South-Central, Fianna Fail)
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On the outstanding €2 million plus, it is not a case of an inability to pay but a questioning of the justification for the payments and so on. How many suppliers are involved in that?
Séamus McGrath (Cork South-Central, Fianna Fail)
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How long have those disputes been ongoing?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Has there been legal representation?
Séamus McGrath (Cork South-Central, Fianna Fail)
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It is likely that will end up being settled through a legal process.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Resolved and not settled, okay. I thank the witnesses again.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I call Deputy Ó Broin.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I have a comment and two final questions. Our remit is very different from that of the Committee of Public Accounts, especially given its focus on the Accounting Officers and the finances. In fairness, Deputy McAuliffe has a dual role. We spent a lot of time in private session in the previous committee trying to work out our best approach to this. Our big concern is housing and homeless policy and to ensure the organisations entrusted with that work do the very best by the people who receive those services. I do think, therefore, that at a later stage it would be good for Mr. O'Brien to have the opportunity to come back to us regarding policy points of view, and not to repeat the grilling at the Committee of Public Accounts because we are a much more relaxed group of people than that committee, important as its function is. I just want to put that on the record, because I think there is value in some of the wider issues being discussed later, particularly concerning the lessons that can be learned to ensure no other service ever ends up in the same position again.
Turning to my two specific questions, obviously the bailout, or the loan as we now call it, the trust received from the Department came with a set of conditions. How many of those conditions have yet to be met and will Mr. O'Brien highlight some of the key ones? At the centre of this situation was the fact that the Peter McVerry Trust almost went bust and, therefore, the financial stability of the organisation is key to its future. How financially stable is the trust? If Mr. O'Brien were to put a rough percentage on it, what is left to go before it would be possible for him to come before the committee and tell us all the financial challenges have been properly addressed and the trust is on a fully stable financial footing going forward?
Mr. Tony O'Brien:
I will ask Mr. Mulligan to come in on the Deputy's first question. Once the financial settlement for 2025 is finalised, and we are very nearly there, notwithstanding some debts we have to service, I believe we will be in a position to reach an opinion as a board that we are a going concern, which is the important threshold we have to pass. Earlier this year, I would not have been able to form that opinion, but I think we are very close to being able to form that opinion, which is an obligation we have anyway as we finalise the accounts.
Mr. Niall Mulligan:
On the conditions attached to the €2 million, when I took up this post back in April, we had to report back on the 32 conditions to the oversight group but we also had to report back on 50 actions developed by the interim CEO. I will come to the conditions in one second, because they overlap a lot. In terms of the 50 actions, 32 of them were implemented and 17 of them are in progress. One of them has yet to start, and this is because physically it is reporting back-----
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Does Mr. Mulligan have a timeline for when he hopes all 50 actions will be completed?
Mr. Niall Mulligan:
Yes. I think this is where the two aspects merge. If we look at the 32 conditions again, we have been regularly providing updates on them. Many of them, though, are interlinked, for example, the delivery of the 2023 audited accounts. The fixed asset register is linked into that as well. A number of those have been completed. It also goes into the area of the external consultant commissioned by the Department and the Approved Housing Bodies Regulatory Authority, AHBRA. We are now working to a plan there. In terms of a timeline, the actions we have outlined, some 115, it is quarter one of next year. We would hope at that stage, and this would very much sit with AHBRA and our funders, that we would be compliant.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I join my colleagues in acknowledging the enormously important work done by the Peter McVerry Trust and to pay tribute to all the staff who have had an exceptionally difficult number of years, including those staff who left and those who left who played a role in bringing all this to light. If they had not done that, we would not necessarily be here having this conversation. As a committee, we must acknowledge that people, in very difficult circumstances, have given enormous service to the State and to some of the most vulnerable people in the State. It is proper that members acknowledge that point here today.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I call Deputy Hearne.
Rory Hearne (Dublin North-West, Social Democrats)
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I have just one or two more questions. I apologise if I missed this being discussed already. Was an update given in terms of the number of new units of social housing planned that have been delayed as a result of all of this?
Mr. Niall Mulligan:
The Peter McVerry Trust was involved in a number of developments when the crisis hit. I think it was roughly 20 developments that were put on hold and we were not to progress with them. We have been going through the process with a subgroup of the oversight group, which is the capital subgroup, to transfer those developments either to other local authorities or to AHBs. Is that okay?
Rory Hearne (Dublin North-West, Social Democrats)
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Yes. There are no projects that the trust is currently responsible for developing.
Rory Hearne (Dublin North-West, Social Democrats)
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It was roughly 20 projects that had to be put on hold. How many units did that represent, roughly?
Rory Hearne (Dublin North-West, Social Democrats)
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Okay. It is likely a significant number of units were impacted and delayed.
Rory Hearne (Dublin North-West, Social Democrats)
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Ms Woods does no have that figure, no?
Rory Hearne (Dublin North-West, Social Democrats)
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Are those projects progressing now? Is that the witnesses' understanding?
Rory Hearne (Dublin North-West, Social Democrats)
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The delivery of housing first units has been commented on. Where is it felt the trust is in this regard? Can it progress with these units? What are the big challenges? What does the trust need to get from the State to make it happen?
Mr. Niall Mulligan:
In terms of our position as an organisation and housing first, it might do no harm to put some context on it. We were providing housing first units, and we still are. When the tenders came up last year, though, I think it was roughly around August, we made a decision not to tender. We made that decision because we did not qualify under the relevant criteria. We did not then tender for those lots. As Ms Woods mentioned earlier, we are still managing housing first within Dublin and across a number of regions. Three of the lots tendered for last year are in the process of almost being completed and being transferred over to other organisations. My understanding is that nobody tendered for lot one and it will be put out for tender again.
Rory Hearne (Dublin North-West, Social Democrats)
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Okay. Very briefly, we are here as the housing committee, so how does the trust, as a homeless service, see things now in this area and where does it see things going in future?
Rory Hearne (Dublin North-West, Social Democrats)
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It is a broad question. The trust has experience and is working in the area. What is it seeing?
Mr. Niall Mulligan:
I have an answer to that, but it may not be the answer the Deputy is expecting. I have been with the trust now for 18 months and it is the first time anybody has asked me that question. I think this is a reflection of the work we are trying to do internally in the organisation. Nobody has asked me my opinion on homelessness. They have asked me my opinion on governance, on financial management, on procurement, on fixed asset registers, etc., but the Deputy is the first person to ask this question. I agree with my colleagues in other organisations. It is a crisis. I worked with the Simon Community 15 years ago.
At that stage, we could not envisage 5,000 people being homeless and now there are 5,000 children in among the 16,000-plus. There is no other way to describe it other than a crisis. From our perspective, with regard to the trust, we need to get through this challenge we are involved in because we have a crucial role to play in responding to homelessness and housing.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I wish to come back on that point. Having been a member of the previous housing committee, and I think Deputy Ó Broin would agree, on many occasions we sought and included the opinion on the trust on the issues of housing and homelessness. It is a fact that we had far more interaction with the Peter McVerry Trust on those issues of housing and homelessness than we ever had on this issue. I will correct that from that perspective. The views were always welcome. We always felt that the trust had a significant insight into that area as well.
The witnesses mentioned 17 points of the agreement with the Department in regards to 17 actions that were in progress. Could they just clarify how active the engagement is with the Department on those 17 actions? Is there reporting back each quarter? What does the reporting on those look like?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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How regular is it? Is it quarterly or every six months?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I will ask one other question. There was some surprise that the 2023 accounts had not yet been filed. It is outside the period. I wonder could the witnesses address why that is the case and give a commitment as to when they will be lodged so we can have them again in the other forum?
Mr. Tony O'Brien:
One of the conflicts of interest the Deputy raised also relates to the former auditors of the entity. The first hurdle the trust had to overcome was securing the services of an independent auditor, which was achieved last November. A big issue that had to be resolved - the Deputy may not have been in the room at the time - was the reconstruction from the ground up of the asset register and, to some extent, the income register for that period of 2023. I have been on the record elsewhere as saying that one feature of the 2023 accounts will be a very significant restatement - that is to say a correction - of the balance sheet published in the 2022 accounts. In order to get there, and for the new board to satisfy its governance obligations to make all the appropriate disclosures, it has taken longer than we envisaged but the timetable is now confirmed to me by our auditors. They expect to have draft accounts with us by the middle of next month. We will need a couple of weeks or so to do our due diligence. It is really important because it is impossible to be compliant either with charities regulation, approved housing body regulation or the terms of the special measures without publishing those. I expect we are only a matter of weeks away now. As I said earlier, it is one of the more difficult audits I have ever been involved in and I have been involved in lots of interesting audits in other capacities. We are very close now.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I thank Mr. O'Brien.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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To finish off, somebody made the point that the Peter McVerry Trust has a crucial role to play in the housing crisis. We want to see the day coming when it can get on and concentrate on that role and that the issues that were there previously are put behind everyone in the organisation. I wish the witnesses well and as Deputy Ó Broin mentioned, in 12 months' time we might get an update when the organisation has moved on. Then we will concentrate on homelessness and housing issues for our discussions.
The committee will further consider this matter with representatives from the Department of housing, the Dublin Region Homeless Executive and the Approved Housing Bodies Regulatory Authority. I propose that we suspend the meeting briefly to allow the representatives to take their seats.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I am pleased that we have an opportunity to continue our discussion with representatives from the Department of Housing, Local Government and Heritage, the Dublin Region Homeless Executive and the Approved Housing Bodies Regulatory Authority, AHBRA.
From the Department, I welcome Ms Rosemarie Tobin, principal officer, Mr. Brendan White, principal officer and Mr. Vincent Colgan, principal officer; from the Dublin Region Homeless Executive: Ms Mary Hayes, director, and Mr. Mick Mulhern, assistant chief executive; and from the Approved Housing Bodies Regulatory Authority, Mr. Fergal O'Leary, chief executive and Ms Leona McMahon, head of legal.
The opening statements have been circulated to members. I will take the statements as read. Is it agreed that we publish the statements on the committee website? Agreed.
I now invite members to ask questions. We will work off the same speaker rota we had in the previous session. Each speaker will have five minutes. Members should be conscious that there is another meeting in this room after our meeting so we cannot stray too much over the time.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank everybody for being here today. If I may, I will start with the Department. In its opening statement there is a reference to February 2025 when it was agreed to appoint independent experts to oversee corrective actions taken by the trust. Why was it necessary to do that in February of this year?
Ms Rosemarie Tobin:
I will take that question. We had been working with the oversight group since the exceptional funding was provided back in 2023. As has been said, the trust was reporting to us on a monthly basis on those conditions. When the regulatory reports came out first in October and then, in December, the reports of the Charities Regulator and the AHBRA, it was clear that there were still governance issues and issues of non-compliance. In speaking to AHBRA and the Charities Regulator, we agreed as an oversight group that it was necessary to have experts to go into the organisation and to look at these issues to give comfort to the oversight group that the conditions were being met and that it was moving towards compliance. That was very much done in conjunction with AHBRA.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Just to clarify, in Ms Tobin's opinion, were there still governance concerns earlier this year?
Ms Rosemarie Tobin:
In terms of moving towards compliance with the Charities Regulator and the AHBRA standards. Mr. O'Leary can speak more to this. Mr. O'Brien spoke earlier about the fixed-asset register not being completed and that the trust had not put in its audited accounts. There were still those concerns.
Séamus McGrath (Cork South-Central, Fianna Fail)
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So it was still a work in progress.
Séamus McGrath (Cork South-Central, Fianna Fail)
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If I may, I will turn to Mr. O'Leary. My time is very limited so I will try to be as punchy as I can. In July of this year AHBRA issued a non-compliance determination. That is only a couple of months ago. Could he just explain that to us?
Mr. Fergal O'Leary:
To be very brief, the history of this is that in July 2023 we launched an investigation, which reported back to us in October of last year. The issue was how we could get the trust to be compliant as quickly as possible. That led us to appointing our monitoring experts in February of this year. They then conducted a scoping report, which looked at the trust's compliance versus our standards at that point in time, and it was still not compliant. For that reason, in July we gave it a series of nine high-priority actions that it was to complete between July and today. That process will finish in the next couple of days and our actions following that will be based on the evidence that is provided by the trust.
To underpin longer term efforts by the trust working towards compliance, we issued a statutory direction in July. As far as we are concerned, the trust still is not compliant. It has very serious governance issues. Hopefully, the publication of the annual financial statements in the next couple of weeks will start to allay those, but from our regulatory standards, it is our view that the trust is still not compliant and we are in a number of processes with it to get it to be compliant as fast as possible.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank Mr. O'Leary. For me, the crux of this issue is ultimately the oversight that is there and who is responsible. We have three different bodies before us today and there is also the Charities Regulator. In AHBRA's statement there is a reference to the joined-up approach being a good one. I am not sure I fully agree with that. Where does the responsibility lie in terms of regulation, oversight and so on? Who is responsible when there are a number of cooks in the kitchen?
Mr. Fergal O'Leary:
What I can say is two things. First, the trust itself is responsible for being compliant with our regulations. It is our view that it is not. What do we do about that? We have been quite proactive and constructive in terms of assisting the trust to be as compliant as possible. We were aware there were a number of parallel processes going on with the Charities Regulator, the Dublin Region Homeless Executive and the Department itself. We have had numerous meetings since the publication of our inspector's report last December to make sure there is alignment between what we are asking for, what the Charities Regulator is asking for and what the Department is asking for. We are starting to see the benefit of that as the trust moves towards compliance.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I am sorry for interrupting Mr. O'Leary, but I am caught for time. He says it is the trust's responsibility to be compliant - of course it is - but as the regulatory authority, is it not AHBRA's responsibility to spot non-compliance and to uncover it? In this case, that did not happen until it got very late in the day. What assurances can he give us that we will not get to the same point with other approved housing bodies as we did with the Peter McVerry Trust?
Mr. Fergal O'Leary:
We have hundreds of engagements with the 436 approved housing bodies that are currently registered with us. As I said in my statement, the case of Peter McVerry is not representative of any of the others that we engage with. The issues are far more serious than we have seen anywhere else. What we do though is make sure that where smaller issues occur, we work with the organisations.
There is an important point as to why the issues in the trust were not uncovered sooner. AHBRA does have to acknowledge that we did not do that. We simply were not up and running long enough. Our assessment programme had not started. Somewhat ironically, the trust was down for assessment later in 2023. That would have uncovered issues, but we were not up and running long enough. It also proves that we could not rely just on information that was given to us by AHBs. We no longer do that.
Séamus McGrath (Cork South-Central, Fianna Fail)
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This is my final point. I do not underestimate the challenge for AHBRA given the 436 AHBs. Does Mr. O'Leary feel he has enough resources to be an effective regulatory authority?
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank Mr. O'Leary very much.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I thank all the witnesses for their opening statements. Most of the public commentary on the crisis in the Peter McVerry Trust has focused on the trust and things that the trust and individuals on the board of the executive did wrong. That is as it should be, but there is a wider context and it is important that this committee examines it.
While none of what I am going to say in any way excuses what was clearly inappropriate behaviour by individuals within the organisation, there are aspects of the financial framework within which they were working that certainly enabled some of that very bad behaviour. We know, for example, that the Peter McVerry Trust secured a housing first tender in Dublin in 2019. The full economic cost of that was about €16.4 million but the successful tender was only for €6.4 million, which means the trust was awarded a contract for which it underbid to the tune of €10 million. That is a phenomenal gap. That is not deficit funding in the realm of having to fundraise an extra 10%. The trust was essentially saying to the DRHE, the contracting party, but ultimately to the Department, that it could deliver that service for 39% of the full economic cost. The following year, in 2020, the four chief executives of the other large homeless service providers wrote to the then Minister saying they were very concerned with many aspects of the funding model, including deficit funding, for the financial viability of the sector. A review of that funding model was promised but only commenced following the near-collapse of the Peter McVerry Trust.
My initial questions are to the Department. How did nobody stop to think that there was a problem if a body was being awarded a tender and was offering to fund it at 40% of the cost? Why did the genuine concerns set out in two letters to the Minister and the Department, and subsequently discussed in meetings between the chief executives and some of Ms Tobin's colleagues in the Department in 2020, 2021 and 2022, not raise red flags about what was going on in the Peter McVerry Trust well before that organisation almost went bankrupt in the summer of 2023? What has now changed in terms of those key issues at a departmental level filtering through to the DRHE to ensure that the problems that arose then could not arise again and if they did, they would be spotted at a much earlier stage?
Ms Rosemarie Tobin:
I am going to answer the question from the Department's point of view but in the first instance, it would be helpful for the DRHE to answer the question in relation to the housing first tender because that would have been handled by the DRHE. I will then come in on behalf of the Department.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I accept that but it was within a procurement framework set by the Department. The DRHE is not free to operate the procurement in whatever way it wants. The Department sets that framework. Is that correct?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Sure, and then it is filtered through the Department into its relationship with the DRHE.
Ms Mary Hayes:
The Deputy is correct. There were lessons from that. In the tender, there was probably too much focus on the ultimate cost. It outweighed every other criteria in that housing first tender. There has been learning from that and we have adjusted to make sure that if the DRHE is tendering now, the ultimate cost is not the only consideration. We would put more weighting on the other factors.
The other issue for us was that there were other credible bidders that were substantially below the cost. There is no doubt that there was an over-reliance on allowing fundraising, which we have since addressed.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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It is the case, without me naming organisations, that in that round of tenders in 2019, the trust was not the only organisation coming in below 50% of the actual cost of delivering services. In fact, a number of tenders were awarded at that time that, while not quite as low, were not far off it.
Ms Rosemarie Tobin:
I will now address the Department's role and the lessons learned from that. The CEOs of the NGOs were writing to the Department in relation to funding concerns when I started in my role in 2022 and we met with them at that time. Since then, we have worked with the NGOs and there were uplifts in 2023 and 2024 on that. Recognising there was a need to look at the funding model as a whole, the CCMA set up a review. That commenced prior to the issues at the trust. That had been agreed and the terms of reference had been set prior to the crisis at the trust. The Department worked with the CCMA and the local authorities on that review and a number of recommendations came out of it that were important in the context of what happened in the Peter McVerry Trust. One of those recommendations is that, in tender processes, local authorities should not be allowing tenderers to say fundraising is going to subsidise the service. The core service will be funded by the local authority and recouped by the Department.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Has that been accepted by the Department? Is that now policy?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Does that mean all future tenders to any local authority under section 10 funding for homeless services will be provided with 100% full cost recovery?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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The services for which the tender is relevant. Fundraising can be used for advocacy or other services-----
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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When was that policy change implemented? From what date?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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If I get a chance, I will come back and ask about that but I presume that has a significant financial implication. Looking at the percentages here, some bids were coming in from the Peter McVerry Trust and others at 70%, 60%, 48%, 58%, 39% and so on of the operational cost. That is obviously going to have a budgetary implication. Has that been properly factored in for when existing service-level agreements or contracts expire and the new 100% full cost recovery policy will be implemented?
Ms Rosemarie Tobin:
Yes. We are working all of the time to make sure that we have the funding to support this. The principle that we are operating on is that private emergency accommodation is very expensive and is not the model we want to go with. We want a sustainable NGO sector to provide this accommodation and while we recognise that it might mean an increase in the NGO provision, hopefully it takes us away from the over-reliance on the private sector.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Has the CCMA review been published? If not, can it be shared with the committee?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I would say if the Department asked the association, it would be happy to oblige.
Rory Hearne (Dublin North-West, Social Democrats)
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My first question is for the regulator for whom one of the key areas of responsibility is protecting tenants. In terms of the Peter McVerry Trust, did the regulator have any concerns in relation to that?
Mr. Fergal O'Leary:
That very much informed our response to the inspector's report. What we did not want to do was cause any additional uncertainty for any of the tenants, so we really focused in on areas where the trust could help itself to be compliant as quickly as possible. In our view, that allays concerns that tenants of the trust may have and gives the trust an opportunity to show that it is constructively working with us, which it is doing. Progress is being made at the moment.
Rory Hearne (Dublin North-West, Social Democrats)
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Does the regulator have any responsibility in relation to emergency accommodation provided by AHBs?
Rory Hearne (Dublin North-West, Social Democrats)
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Has the regulator undertaken any assessments or inspections of emergency accommodation provided by AHBs?
Rory Hearne (Dublin North-West, Social Democrats)
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My next question is for the Department and relates to the funding model for NGOs in the provision of emergency accommodation in particular and in housing first as well. Will the changes made to the funding model address these issues such that we will not see a situation like this emerging again?
Ms Rosemarie Tobin:
It is clear from the regulator's reports that it is not the funding model alone that led to the issues at the Peter McVerry Trust. That said, through the examination of the funding model, we have looked to see where we can improve and do things better. What the issues with the trust have shown is the absolute necessity of having NGOs delivering those services. The State needs to make sure that they are funded to deliver them. We are putting an implementation plan in place for the recommendations coming out of the CCMA report but we want to move very quickly on the funding that will help the NGOs in the short term. There are recommendations in relation to operational funding and we are working now to get those in place for this funding year. We are also looking at funding for maintenance and capital works on buildings to help the NGOs.
Rory Hearne (Dublin North-West, Social Democrats)
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At what point will NGOs provide all the emergency accommodation rather than for-profit private entities?
Ms Rosemarie Tobin:
I do not think I can say when that can happen. The numbers we have at the moment mean that, to meet the need, the local authorities have to rely on private emergency accommodation. I hope the changes we are making with the local authorities and NGOs will put them in a better position to expand their services. They have not been in that position for the past couple of years.
Rory Hearne (Dublin North-West, Social Democrats)
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My time is very tight. Sorry, I do not mean to be rude. Does Ms Tobin have concern for the welfare of children in for-profit emergency accommodation in Dublin? Situations have been highlighted - and Ms Tobin probably saw this - where only one staff member has been available in emergency accommodation.
Ms Rosemarie Tobin:
I have concern for any child in homeless accommodation. It is not where we want families to be. If any family has to spend time in emergency accommodation, we would like that to be in a family hub facility but we do not have enough beds available. We have been working with local authorities to increase that provision. The homeless unit had our own capital funding of €25 million for the first time this year and we have been working with local authorities to see what projects they can undertake where we would be the owners of the buildings rather than relying on private emergency accommodation. To meet the need, we need to do that.
I will ask Ms Hayes to talk about the national quality standards framework in place across all emergency accommodation provision to monitor standards. I have a concern about any child in homeless accommodation. It is not where we want families to be.
Rory Hearne (Dublin North-West, Social Democrats)
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On the concern about standards in emergency accommodation, a lot of it is for-profit, private accommodation. There was information on the small number of staff present. Are Ms Hayes and Mr. Mulhern concerned about that?
Ms Mary Hayes:
Those reports come from us in the sense that they are our inspections. There are KPIs where we meet with the services to measure performance, there are unannounced inspections and then there is the independent inspectorate, which measures facilities and physical standards. The fact we are publishing those is healthy and brings up the debate. There are some legacy private or for-profit emergency services that run with one waking cover and one on call. There are some NGOs as well. The NGO ones tend to be because the family is in its own front-door accommodation as opposed to for any other reason. It raises issues for us but some of those are legacy. They were the outliers. The vast majority of inspections did not raise an issue around staffing, which shows progress. I accept completely there is a road to go yet. We have 73% reliance on the for-profit sector. It is not where we want to be.
Aubrey McCarthy (Independent)
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Mr. O'Leary mentioned that, in July 2023, AHBRA started a formal investigation of the trust. What prompted that investigation? Was there a whistleblower or what brought it on?
Mr. Fergal O'Leary:
A concern was raised with us by the organisation. We have a concerns process and a notifiable events process. These allow AHBs to tell us at an early stage when they have a significant issue in their organisations. An issue arose rather quickly in that when we asked a series of follow-up questions, our concern grew about the information we got back over the summer of 2023. Ultimately, that led us to open an investigation.
Aubrey McCarthy (Independent)
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In late 2023, €15 million was given by the Department to keep the services going. With the same management, system and structure, what accountability measures were put in place to make sure that money was properly managed?
Ms Rosemarie Tobin:
The €15 million in exceptional funding given to the trust was provided with 32 conditions that were agreed with the Government. In making the recommendation to the Government to put in that €15 million, our primary concern was to protect service provision and make sure there was no interruption of services, particularly of services to the very vulnerable cohort in emergency accommodation run by the PMVT.
When the €15 million was given to the trust, we set up a second oversight group. The first oversight group had made the recommendations. We set up a second oversight group in the Department, which I chair and which had Ms Hayes representing the DHRE, had representatives of the local authority and had Mr. White representing the capital side of the Department. We met on a monthly basis and invited the PMVT to come in. Each month, we reviewed its progress against the conditions put on the €15 million. We also reviewed its cash flow and how the money was being spent in the trust to ensure the funding provided by the State was being used for its intended purpose, namely, to protect homeless services.
Aubrey McCarthy (Independent)
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Is Ms Tobin confident that happened?
Aubrey McCarthy (Independent)
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The regulator's report highlighted conflicts of interest, governance failures, etc. Has anybody been held to account for that or are we simply moving forward without consequences and hoping everything works well going forward?
Mr. Fergal O'Leary:
Our inspector's report assessed compliance against our standards. It did not seek to identity individuals. It did, however, focus on the failings of the board in the organisation. I think the inspector's report was quite clear there. It also provided a path for the board to be compliant and renew itself over time.
Aubrey McCarthy (Independent)
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Is Mr. O'Leary happy that is happening?
Aubrey McCarthy (Independent)
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One of the key things mentioned today was that the accounts for 2023 had not been filed yet, even after all this debacle. I am involved in various AHBs and if they do not have their accounts in situ, then the funding model is stalled. I am surprised this continued without the accounts being submitted. As Deputy Ó Broin said, alarm bells should have rung when somebody tendered for a service that was way under what other service providers submitted. Maybe something has been put in place, but is there a case for an actuary to work out the cost of a service so we know the ballpark it should be in rather than coming in from €5 million to €15 million?
Ms Mary Hayes:
In terms of the tendering, there are lessons learned. We intend to reduce the reliance on ultimate cost as carrying the most weight. It is not the only criterion; we look at other criteria that are part of a tender as well. As part of the assessment process, we have a strong eye on the margins between the tenders. Fundraising can be used for added value but it cannot be used against the core service. In that sense, we will eliminate the risk of disproportionality between two tender bids.
Aubrey McCarthy (Independent)
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Have we confidence in the trust going forward? That question is for everyone.
Ms Rosemarie Tobin:
The oversight group will remain in place until all the conditions have been met, including the €15 million being transferred back through the transfer of assets. We recognised in February with AHBRA following publication of the reports that we needed a deeper examination of what was happening in the trust to make sure it was compliant with standards. That is why we have those independent experts in at the moment. We have a report coming in relation to that, so we will examine it very closely. The trust and its directors have been very co-operative with us as an oversight group and have shown their willingness to implement the conditions put on the exceptional funding.
Mr. Fergal O'Leary:
I am happy to say I have every confidence in the intent of the current board to be compliant but we as an organisation need to see over the next couple of months evidence it is working quickly towards compliance. There is the publication of the annual statements, the finalisation of the asset register and a series of other commitments. We have been clear that if it demonstrates these things to us, then we move on to the next set of deliverables for it.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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There was one more question.
Aubrey McCarthy (Independent)
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The confidence is not there yet but we are getting there.
Joe Flaherty (Fianna Fail)
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The DRHE is the largest revenue funder for the Peter McVerry Trust in terms of homeless services and housing first. There are 1,458 beds. How much does that cost?
Joe Flaherty (Fianna Fail)
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Therefore, it is costing roughly €15,700 per bed.
Ms Mary Hayes:
The Deputy raised this on a previous question. I feel we are comparing different things. There are the people we asked the trust to work with in terms of residential beds and also the cost of emergency accommodation in general, no matter who it is. If we went out today and did not have a supported provider - let us suppose it was the private sector - we would be lucky to get it for €20,000 a year. That is the reality of the cost of an emergency accommodation bed. With the trust, what we get is skilled and qualified workers on top of that, which is not what we have now. I appreciate that some of those are housing costs rather than emergency accommodation. The trust would be synonymous with working at the very sharp and pointy end of homelessness and with housing need. I can certainly say that in Dublin, they are working with acute need.
Joe Flaherty (Fianna Fail)
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I still think it is an exceptional cost, although I accept what Ms Hayes is saying. What is the vacancy rate across the 1,458 beds at the moment?
Joe Flaherty (Fianna Fail)
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Are any of the 492 housing first tenancies vacant at the moment?
Joe Flaherty (Fianna Fail)
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I have a question for Ms Tobin. Many people listening in would be concerned about the state of the approved housing body sector, notwithstanding that a review has taken place, and Ms Tobin has alluded to aspects of that. It has 67,739 properties, just under €10 billion in assets and just under €9 billion in liabilities. There is very little headroom there. More concerning is that nine of the largest players control 73% of those properties. Does Ms Tobin think we are on a cliff edge with this? It has happened with one group. I was not wholeheartedly enthused by how the Department reacted to this and that it did not know sooner there was a problem. Would the Department be worried about the AHB sector?
Joe Flaherty (Fianna Fail)
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Has it overreached? Does the Department have worries about the sector? I know the sector will be looking for multi-annual funding but the Department has stopped short of that. I suspect the Department has concerns over and above what is happening with the Peter McVerry Trust.
Mr. Vincent Colgan:
Let us just say that our regulatory and oversight structures will continually evolve commensurate with the scale and risk profile of the sector. We have a number of State agencies touching off this sector. For the Housing Finance Agency, when it is extending funding, its due diligence processes would evolve and sharpen as AHBs grow. Our regulatory processes, when there are systemic-----
Joe Flaherty (Fianna Fail)
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I am conscious of time. With regard to fundraising, I know it dropped off a cliff for the Peter McVerry Trust. A message should go from the Department that there should be no fundraising for any of these groups until we get clarity on the state of them. If nine of the largest AHBs control 73% of the properties, that is a big concern for me. It is a big concern that we are allowing these agencies to continue to fundraise when we see what has happened in the Peter McVerry Trust.
Joe Flaherty (Fianna Fail)
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I know that. However, some of their applications are based on the fact they will be supported by fundraising. That cannot be allowed anymore.
Ms Rosemarie Tobin:
We have agreed with that and it was one of the recommendations coming out of the CCMA review. The new housing first tender is being done on that basis. We agree with the principle that where it is a core service that the State is relying on an NGO to provide, we do not want fundraising to be part of that.
Joe Flaherty (Fianna Fail)
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I said that I was not happy with the reaction of the Approved Housing Bodies Regulatory Authority to this issue. Cavalier developers were telling us as early as 2021 that the Peter McVerry Trust was out of control. If a cavalier developer is telling us that someone is out of control, we can take it that they are definitely out of control. They said it was buying properties to no end. The Approved Housing Bodies Regulatory Authority must have seen these figures. It must have had concerns about this rapid escalation over a two- to three-year period. It would have dipped in to have a look at the figures at that stage.
Joe Flaherty (Fianna Fail)
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I am sorry. I will take that back.
Mr. Fergal O'Leary:
What I can say is that the situation is now is very different. We have assessed all of the large AHBs, which, as the Senator said, are responsible for 73% of the dwellings. Generally, they have good compliance. There are some issues on which we are working with them and we have so far found them to be quite co-operative.
Joe Flaherty (Fianna Fail)
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Can Mr. O'Leary say, hand on heart, that there is not another Peter McVerry Trust lurking in the darkness?
Joe Flaherty (Fianna Fail)
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I have a final question for the moment. The Approved Housing Bodies Regulatory Authority’s final investigation did not focus on anyone individually. Has there been any interaction or has the regulator provided any of its findings to the DPP at this stage?
Joe Flaherty (Fianna Fail)
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That is the only engagement there has been. The Approved Housing Bodies Regulatory Authority just directed An Garda Síochána to the website.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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For the record, if a cavalier developer had notified me in 2021 about problems in the Peter McVerry Trust, the first thing I would have done is write to the Minister to bring that to his attention and ask him to look into it. That kind of information could have been very useful at the time.
I want to go back to the CCMA review. One of the things many of us on this committee want to do is satisfy ourselves and the public that systems failures will not be repeated. I want to put on the record that a huge amount of work has been done by the people in this room and elsewhere to fix the mess we all inherited. Therefore, none of my comments are to be taken against that spirit.
At the same time, I find it remarkable that in the period from 2019 through 2020 and 2021, red flags were not being raised either in the Department or by the Department in its communication with the DRHE. What I am interested in is not so much for people to comment on that period. What I am interested to know is whether there have been any changes in procedures either within the Department on the homeless side and the capital side, or in its relationship with the DRHE, to ensure that if such red flags were not raised, or were raised and were missed, they get caught the next time around. That is a very important question for us. The regulator and the other bodies are doing important work to fix what went wrong within the Peter McVerry Trust. I would hope there is some examination and potential learning within the Department and the DRHE, without prejudice to anybody's professional integrity, to ensure that if somebody has a concern, they are able to put their hand up in the room and say, “I think this is a problem and we need to intervene earlier.” Can the witnesses speak to that first?
Second, with respect to the CCMA review, were other key recommendations of that review accepted? For example, was there any look at the competitive nature of the tendering and how that sets organisations against each other, and also, crucially, at staffing costs?
This is, as Ms Hayes said, a very specialised nature of work involving working with people with very complex needs. They have to be highly trained and highly skilled and that was one concern both of the four chief executives when they wrote to the Minister in 2020 and 2021 and in terms of some of the challenges with the Peter McVerry Trust up until now.
Ms Rosemarie Tobin:
I expect Ms Hayes will have some things to say on this as well but I will begin in terms of our Department and our procedures. The Deputy will be aware the Department does not fund NGOs directly. The local authorities have the relationship and we fund the local authorities. However, there is an extensive oversight framework in place to monitor that funding. We are responsible, as the first grantors of that section 10 funding. We undertook a review of our own funding model, our own oversight procedures, and we also had the C and AG come in. That office reviewed our procedures and made three recommendations. We have enhanced our oversight procedures with the local authorities to take into account what we found in our own review and in the C and AG report.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Will Ms Tobin share what those recommendations are that the Department has accepted?
Ms Rosemarie Tobin:
There were three recommendations from the C and AG. The first, which is the one that was on our own procedures, was that we needed a stronger spot-checking process. That has been put in place and Jennifer Peyton's team are running that. It was also recommended that we needed a stronger compliance checklist with local authorities in our overall framework so that it was very clear what the local authority was responsible for and what they were responsible for checking in the NGOs, and we needed to strengthen the grant agreement arrangement with the local authorities. Those changes have been put in place over the course of this year. Those were the main governance recommendations from the C and AG. The other piece was around the continued oversight from the oversight group. That office had a concern that the oversight group was not getting enough proof of the improvements that were being made in the PMVT. The oversight group took that on board and we were getting further evidence of the work that was being done in the PMVT. The conversation with AHBRA and the expert going in to the PMVT was in consideration of that recommendation as well. Overall, we have done that internal review and we have had the C and AG review looking at those processes.
Regarding the CCMA report, the Minister has accepted the recommendations and has asked my unit to put an implementation plan in around it. We are at the early stages of that. We were anxious to make sure for those ones that could impact the funding for this year that we would bring them in this year. We are working to put the operational funding into 2025's funding.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Will Ms Hayes also address the ongoing delays in the completion of the tender for the new housing first tenancies? This is not just an impact on the existing housing first tenancies. Obviously, there has been a collapse of new housing first tenancies because of the delay in getting that new tender processed and up and running. It would be great if she could share some information with the committee on that.
Ms Mary Hayes:
I will start off with just the first part, which was around what we are doing differently or what are we doing to ensure it does not happen again. For ourselves, the CCMA review is absolutely critical because it addresses the key issues for the sector, indirect costs and compliance costs. If we want people to have a certain sinking fund, to have health and safety and for them to be compliant, they are not-for-profit so that money has to come and we have to recognise their indirect as well as their direct costs. There was a very strong recommendation on that.
As regards pensions and increments and respecting the workers who are working in the sector, if we want to retain them and we want skilled workers, then obviously they have to be paid like everybody else. There was broad agreement on that from all of us. Where different agencies are working together, particularly in the area of homelessness where the local authority and the HSE are both actors in the space, there is a need for clarity. For us, we would like to see the clarity around those funding arrangements where there are joint funding arrangements.
In terms of competitive tendering, in the DRHE, one of the actions we want to look at, without the pressure of an actual tender competition, and we are reviewing ourselves, is what alternatives are available to us for the tendering of social services. There is an issue for non-for-profit scaling up. They are not businesses in the traditional sense. I do not have an issue with tendering when it comes to a very straightforward service but I am not sure how well it is lending itself to social services. We are going to look at that when we have a little space and time without a tender pressure on our heads.
Regarding the current tender process, the big issue was with lot 1. Housing first was tendered by the national housing first office. This is Dublin housing first. It was broken into three lots. There were tenders for the two smaller lots but not for the larger one. What that is about is around the sector's nervousness about growth and expansion and making sure that is matched by an income stream, but also its scalability in terms of the difficulties recruiting staff. These are things we will have to be able to manage.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I am trying to recall a meeting we had with a number of AHBs in regards to delivery. In the last term, there was a lot of focus on trying to ensure all the different sectors were in a position to deliver. I will try to go back and find the exact quote. Maybe let us not tie it down to one meeting. However, I was of the view that the Peter McVerry Trust was known for being very good at operating the CAS scheme and that this allowed it to deliver better than some of the other AHBs. It is a memory I have; I will have to go back and reference it. In the operation of the schemes the Department has in terms of delivery, is there any reflection the witnesses have made on those schemes which could have contributed to the situation that the trust found itself in? Apart from things that may have appropriate or inappropriate and all the rest of it, were there elements of the funding mechanisms that led specifically to issues in the Peter McVerry Trust that could have been spotted in hindsight?
Mr. Brendan White:
I thank Deputy McAuliffe. First, it is true that the Peter McVerry Trust was very successful with the CAS programme. From about 2018 onwards, it made almost 500 CAS acquisitions. Most of its CAS projects are CAS acquisitions, so single units. The trust was going out and had a strategic plan to keep growing and growing on that. We have obviously learned a bit from this process now. We have had the AHB strategic review and that has been informed by some of the issues around the Peter McVerry Trust from a capital standpoint. One of things we are putting in place initially for our CALF programme, but at which we are looking for CAS as well, is a new protocol. CAS tends to have a lot of smaller AHBs by its nature because it for disability, the elderly and homelessness. This would not necessarily have fixed this problem but when a funding application comes in from an AHB that has not recently requested funding, we are putting a protocol in place where it will have to come in with certain documentation such as strategic plans and that sort of stuff. We are working on that and there is a number of other-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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When will that be ready?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Often, one of the complaints from the AHB sector in terms of delivery is that a lot of the preplanning costs have to be put up upfront by those organisations and that puts huge pressure on them. They have suggested it limits capacity and so on. I can see on the other side how this also leaves one to be cautious when something is in preplanning. Has the Department addressed that issue?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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A huge financial strain is put on AHBs by having the meet those upfront costs.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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For example, the very small number of AHBs involved in the affordable purchase sector, those bodies have to come up with the costs upfront. They do not necessarily have a long-term income stream they can borrow against because their objective is to immediately sell. Does the Department accept that for those AHBs, upfront costs are a limiter of delivery? I am thinking of Ó Cualann for example.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Yes. Mr. O'Leary has outlined a number of areas. He has been very honest with the committee regarding his concerns that are outstanding. I appreciate that. Does he have a concern in regards to the capacity on boards across the AHB sector? Many of the people who are on AHB boards are volunteers. They have very limited time as a result.
These are significant amounts of public money. Should AHBs be working towards boards that have more capacity and time resources available to them? While it might be unpopular to suggest that people should be paid for sitting on boards on foot of all the public commentary that comes with that, I have been on many boards. There is a significant issue in that people are there because they are doing the right thing, but that does not necessarily make for good governance.
Mr. Fergal O'Leary:
The sector is reliant on volunteers. That feeds into the way we regulate the sector. For example, as the committee will know, there are hundreds of very small AHBs. We certainly do not regulate them and their directors in the same way we do a growing or a large organisation. We provide a huge amount of training to those organisations. In the past year, we have dealt with 1,500 members of small AHBs. We talk to them about risk management and budgeting in order that we do not have to do assessments for them. We carry out random assessments. Everybody has a fair shot at getting one, but for small AHBs in general, we see guidance, education and communication as the way to help them. For the larger ones, in order to home in on the issues we are speaking about today, there is a responsibility for those boards to make sure they are manned up properly in terms of their expertise and capabilities.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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You are a regulator and those AHBs are relying on people to give voluntarily of their own time and expertise to manage public funds to the tune of millions. It is a fundamental flaw in the governance structure that we are expecting people to volunteer their time. That is a weakness in the governance model.
Mr. Fergal O'Leary:
I do not have a view as to how boards are replenished or constructed. We simply examine whether the board has the capability and capacity to run the organisation. In the particular case we are discussing today, that was not the case, but the vast majority of the large AHBs have very impressive boards and they do the right amount of stress testing.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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No matter how impressive a board is, it is always possible for the permanent staff of a body to hide information from the board if they wish. We need to get greater capacity in this sector at board level.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Deputy Butterly is next.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I will raise a couple of matters. On procurement and the massive difference involved, was there a procurement expert dealing with that in the Department? Deputy Ó Broin mentioned a figure of 39% or 40% - a massive difference. Many of us work with community organisations and have to do tendering for CLÁR and other schemes. Massive differences in price are flags. I cannot understand why this was not seen earlier when there was such an underbid regarding the delivery of the service. Was a procurement expert dealing with it? If there was, what role is that person in now?
Ms Rosemarie Tobin:
It is important to state that the Department does not have a role in tendering for homeless services or in the contacts and the negotiations relating to SLAs. That is all the statutory responsibility of the local authorities. When the local authorities enter into an agreement with an NGO or any service provider, they let the Department know because we have to confirm that funding will be made available for that. We recoup the local authorities for the funding they spend, but it is the local authority's relationship and it would have been the local authority's tender at the time. As far as I know - someone can correct me if I am wrong - I do not think there was any consultation with the Department on that aspect. There would not have been, given the way the procedure is set up. The issue is less that the costs were completely out of kilter; it was the fact that there was an over-reliance on the amount of fundraising coming in. There was a procurement expert at the table, there always is. We always contract in to help us manage. This was a few years ago, in 2017 or 2018. That is one contract, the housing first contract, that was referred to. It was a number of years ago. I am going back in time. I was not the director at that stage but I am aware that there would have been a procurement expert there. The issue was less to do with the costing of the services and more to do with the over-reliance on fundraising, and that it was allowed.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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When that was procured, the Department still compensated the local authority for it. Figures were never sent on. Only the baseline figure that was agreed was submitted. There were no details of the actual process of procurement or of what was submitted.
Ms Rosemarie Tobin:
I cannot speak to the processes at the time. I do not know. Over the last number of years, as the spend on homelessness has increased, we have increased our oversight and the amount of communication we get from the local authorities. In terms of the housing first tender today, the Housing Agency, which holds the housing first national office, was very much involved in that tender with the local authority. The way things are now, when a new service is being signed up, the Department would be told about and we would give approval. I do not think that was the situation at that time, however.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Governance levels have increased.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Thank you. We will have a round of one question each. We will limit the time to one minute.
Rory Hearne (Dublin North-West, Social Democrats)
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On housing first and the context of all this, housing first in Dublin has collapsed by 70% between quarters 1 and 2 of 2025 in comparison with the same period in 2024. Maybe the Department and the DRHE could provide an explanation as to what is going on here. I know it is happening nationally as well. What are we going to do to address it? To Mr. Mulhern----
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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One question.
Rory Hearne (Dublin North-West, Social Democrats)
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----and the Department, at what point are we going to deliver the social housing that will actually address the homelessness crisis?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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While it is the case that the formal procurement was the responsibility of the DRHE, the real issue here is the policy context in which it was set. That is why one of the really positive things we have heard today is an end to deficit funding, but I also think the fact that we are now looking at the possibility of moving away from the competitive tendering model that we have is very important. Do we have any indication of when the tender for the large lot of Dublin housing first will open, if it has not opened already, and when it will close? Until we have that tender in place, my understanding is that no new housing first tenancies can start. Is it possible to get a timeline for that?
Thomas Gould (Cork North-Central, Sinn Fein)
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Also in respect of housing first, it was the way to get people in long-term homelessness into permanent accommodation. The Minister made an announcement last week about supports for housing first, right-sizing and tenant in situ. Is there a budget for this year? Has the Department got a budget? If so, how much is it for those three aspects?
Séamus McGrath (Cork South-Central, Fianna Fail)
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I have a question on the number of AHBs nationwide. We have discussed at length the governance issues with the Peter McVerry Trust and the difficulties in overseeing and regulating 436 bodies. In the opinion of the Department and the regulatory authority, do we have too many approved housing bodies nationwide?
Paula Butterly (Louth, Fine Gael)
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On funding, when can we expect the single-stage approval process to be brought forward?
Ms Mary Hayes:
I will answer on the lower numbers in housing first, if that is okay. The phrase "fail rate" is a bit cruel ,but an 85% success rate is what we expect in respect of housing first. We expect about 15% of the tenancies to end and that those people will need rehousing. That is built into how housing first works. There has also been quite a high number of deaths. The deaths are occurring because of the profile of the people we are putting into housing first, who have chronically compromised health plus long-term histories of homelessness. We are intending to replace but we are not in a position to take on new tenancies, but we will get there.
Mr. Mick Mulhern:
On the housing delivery side,we have a projected housing pipeline of just over 17,000 homes over the next seven years.
This comprises about 11,600 on Dublin City Council-owned sites. In addition, we have 4,400 AHB schemes projected for delivery in the coming two and a half years. We do not have a line of sight beyond that. The figure of 17,000 comprises Dublin City Council housing of 11,500 and the next two and a half years of projected AHB schemes in respect of which we have certainty. This figure will increase. We are working with the Department on the various other mechanisms we need to bring into play to increase the target further once we get clarity on what our increased social and affordable housing targets will be.
Ms Rosemarie Tobin:
I will answer the questions on housing first and the tender. Housing first is a very important programme for the Department, and we are supporting it with funding. We will fund what comes out of the new tender. The housing first national office, which is based in the Housing Agency, manages delivery. It has been supporting the local authorities and the HSE with the recent tender. The Dublin region housing first health support contract has been signed between Ana Liffey Drug Project, Coolmine Therapeutic Community and the HSE. This has been done. The evaluation process for lots 2 and 3 of the Dublin region tenancy has been completed and the successful tenders are at a standstill for 14 days. We are at the end of the process for lots 2 and 3.
As Ms Hayes mentioned earlier, we had to return to lot 1. There is a delay but we hope it will be resolved in the coming weeks.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Is it to go out to tender?
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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How long will it take?
Ms Rosemarie Tobin:
I do not have a timeframe, but, conservatively, it will probably be three to six months. In the meantime, as the Peter McVerry Trust representatives mentioned earlier, additional resources are being given to it to support the existing housing first tenancies. This process is taking longer than we would have liked and we are looking forward to it coming to a conclusion.
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I wish to make a minor point. Effectively, this means that in Dublin virtually no new housing first tenancies will be created in 2025. There will be some replacement tenancies in respect of people in the existing programme, but because lot 1 is 50% of the overall and lots 2 and 3 will be in two weeks' time, we will not have any new housing first tenancies across all of the Dublin region bar the five or six we have signed up to so far this year. Is that correct?
Ms Rosemarie Tobin:
We have our five-year implementation plan and we will be working to make this up in the remainder of the plan.
A question was asked about the additional €50 million which the Minister announced in recent weeks. This is €50 million for acquisition funding, which has been ring-fenced specifically for families who have been the longest in homelessness and for housing first tenancies. There is a recognition that it is difficult for local authorities to secure sufficient one-bed units for housing first. We wanted to make this additional funding available for it.
Mr. Brendan White:
I want to pick up on what Mr. Mulhern said in response to Deputy Hearne. At present, we have 27,495 social housing units approved to be delivered up to 2027. They already have funding approval. There are an additional 9,100 in the approval process. This does not necessarily mean they are with us; they are with the local authorities, ourselves and the AHBs to be approved. This will bring us up to 36,000 new social housing units in the next three or four years.
To answer the question on the budget this year for second-hand acquisitions and the tenant in situ scheme, €325 million is already in place.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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We are caught for time. We do not have time for any more questions. We have to conclude this part of the meeting and then go into private session. There will be no more questions.
Mr. Brendan White:
The question on single stage is easy for me to answer because it is within my group. We have a working group, almost coming to a conclusion, and it will be rolled out in October or November. It will certainly be there before Christmas. We will meet the national investment office tomorrow to finalise some parts of it.
Mr. Vincent Colgan:
Deputy McGrath asked whether the sector is too big or whether, at 436, there are too many entities involved. I do not think the number is what is important; what is important is that it is a vibrant and active sector and this will invariably be with a smaller number. As part of the AHB strategic review, we met representatives of well-meaning, vibrant small AHBs and a lot of dormant AHBs that want a path out. We want to do this in a reasoned way for continuity. We want to create economies of scale and we want to support more large AHBs. We will not get fixated on a number, but we have to have mechanisms to achieve all of these, especially with specialists.
Mr. Fergal O'Leary:
From a regulatory point of view, to support the policy intent in our regulation of mergers, we will make sure that tenants are unaffected and that public money is safeguarded. It will certainly not be an onerous process, however. In recent years, we have seen a small but growing number of cancellations. We deal with issues such as unencumbered assets. We make sure that nothing is transferred that should not be transferred and that if something is going to another body, it has the wherewithal to take it on. Certainly, there will be nothing in our processes to slow down the policy intent.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I thank the representatives from all of the organisations who have come before us to allow us to consider this matter. At some stage in 2026, we will come back to this issue to see that progress has been made. That concludes our consideration of the matter for today. I now propose that the committee go into private session to discuss other matters.