Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

I will speak to amendment No. 24 in this group on the subject of PPPs. Public private partnerships are quite a new model for developing social housing in a context here. The first bundle, as the Minister knows, was completed earlier this year, with 109 of the first 500 in my constituency. They were tenanted recently. The difficulty with the PPP model is in the detail, and I want to briefly outline the reason it is not the right model to deliver homes.

There is an exercise at the heart of awarding the contracts for public private partnerships, which is a public sector benchmarking exercise. Officials from Dublin City Council, the Department of Housing, Local Government and Heritage and the Department of Public Expenditure and Reform carry out a public sector benchmarking exercise, asking themselves what would it cost the public sector to do what we are asking the private sector to do. It looks at the cost of construction, the cost of management and maintenance and a number of other issues. A figure is derived. That figure is never made public and never made available to councillors or Members of the Oireachtas to scrutinise it properly in real time. It is used to decide which of the bids for the public private partnership are the most competitive and on this basis an award is given. The difficulty is that the costings built into the public sector benchmark are not actually the same as what the State would give a local authority not only to build or to buy but also to manage and maintain social housing stock over the same period of time. We are not comparing apples and oranges. Therefore, from the very get go, the private sector is being given a better deal and a higher level of remuneration for the provision, management and maintenance of the stock than a local authority would be.

By virtue of using a public private partnership there are additional layers of cost. The finance, as Deputy Boyd Barrett has said, is more expensive. There is also the profit margin of the various players in the public private partnership consortium, which I will come back to. When the public private partnership consortium is forward projecting the cost of management and maintenance, of course it will be very risk averse and will include higher costs in its calculations. In a number of other jurisdictions where public private partnerships are used we have seen that they can become very litigious if they do not get their way at a later stage when those higher costs become a matter of dispute.

The other great difficulty with public private partnerships is their complexity because in the consortium we will have a financier, a building contractor, a maintenance contractor and an approved housing body to manage the tenancies, although the tenancies are actually with the local authority. This means getting anything done in addressing issues at the snagging stage as people are tenanting, or issues that may arise with tenants or that may arise with management and maintenance, is incredibly complex, unlike standard social housing delivered by local authorities or approved housing bodies where we go to the person in charge. We end up moving around five, six or seven different players with different levels of responsibility, all incredibly complex and time-consuming and all incredibly expensive and much more difficulty to resolve the problems. I have a very long list of real-life examples that I have been dealing with in respect of the public private partnership in my constituency, the details of which I will not go into today.

We know from school building projects that when something goes wrong with a public private partnership the State is on the hook. Contrary to the claim of Government that public private partnerships transfer risk to the private sector and protect the taxpayer, the very opposite is the case. The UK has been using public private partnerships for housing regeneration projects and new build projects for some time. There has been a series of independent studies that show they are high risk for the State, more expensive and, in many respects, slower to deliver.

I have to say this is a bad model for delivering public housing. It is bad in terms of cost, management and maintenance and tenancy management. I have to say it has no place in an affordable housing Bill. The land in my constituency that has the 109 homes would always have had 109 homes. It would just have been much better if the State had funded South Dublin County Council to deliver them. The tenants and the rest of us would have been much better off for it. On this basis, I urge the Minister to remove public private partnerships not just from the Bill but from public housing delivery in general because it is a very bad model.

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