Tuesday, 15 January 2019
Ceisteanna (Atógáil) - Questions (Resumed) - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Social and Affordable Housing Funding
44. To ask the Minister for Housing, Planning, and Local Government the status of the development of a special purpose vehicle, SPV, by the Irish Council for Social Housing, ICSH, for the investment of funds in social housing; and if he will make a statement on the matter. [1589/19]
The credit union movement has for over five years been advocating using its €10 billion or so in assets in investment in social good, particularly in social housing. It is a policy that my party and I support. I raised this with the Minister in September. Is the SPV, which and was approved by the Central Bank in February 2018, open to accept funds from the credit union sector? Have any of those funds been received? Have those funds been invested in social or affordable housing?
The Government is committed to this. It was an action in Rebuilding Ireland, whereby we would work with the Central Bank and Department of Finance to make this an option. Work was completed a year ago, in February 2018. The Central Bank made a recommendation about how credit unions could invest their available funding into the social housing sector. That has been provided for and work since that has been funded to try to develop the mechanisms to make that happen. Supported by funding assistance from my Department's innovation fund, work has been undertaken by the ICSH to support six of the larger approved housing bodies, AHBs, to access private finance.
This work is being undertaken by the ICSH in three phases, the first two of which, are designed to test the market interest in investing in social housing and the appetite among AHBs for private finance, have been completed. While the ICSH had hoped to complete the final phase of the work, focused on the structuring of SPVs, by late autumn last year, this work is ongoing. We had this discussion in late autumn of last year when we said it was nearly complete.
I understand that one of the issues that has given rise to the delay in concluding the work is the need to take account of other private finance arrangements and vehicles that certain AHBs have put in place in parallel. Three AHBs have been successful in accessing private finance from financial institutions to deliver new social housing. These financial institutions have their own specific requirements for lending and investing. One of the institutions included a requirement that the AHB concerned establish its own SPV, while the other two arrangements did not seek the establishment of such a vehicle, working instead through bilateral loan agreements with the AHBs. I expect that the ICSH will have concluded phase 3 of their work by end of quarter one this year. I certainly hope so because, like Deputy O'Brien, we would like to see the credit union money that is available being invested in social housing where it gives good value and can benefit projects. When we discussed this last autumn, I made it clear that the credit union sector was ready and available and had a vehicle ready for investment to happen and was engaged with the AHB sector to invest money.
I would check the record if I was the Minister of State. He effectively said that the work was complete and he was ready to launch the SPV at that stage. That is a different answer from the one on 27 September. It was nearly put back on the credit union sector at the time and he nearly apportioned blame to it for not seeking to enter the SPV and move forward. That is a very different response to the one he gave on 27 September. I welcome that clarification. I take it that this is the up-to-date and the correct version of where we are, not the one he gave me on 27 September. When will the project be completed, when will it be launched, how much of it will be used and will the credit unions, under Central Bank rules, be eligible to invest in this special purpose vehicle?
I refer to what I said last year. I do not have the exact words in front of me but I was clear that we are not launching an SPV. We cannot do that and it is not our job. We have helped the sector to develop the SPV. We have given advice to the innovation fund. It is up to that sector. One of the credit union representative bodies has an SPV ready to go. That is what I said last year and have said again. It is called the Credit Union Development Association, CUDA. The Deputy can contact it himself and the representative body will tell him all about it as well. It has an SPV ready for investment. That is what I said last autumn and I am happy to repeat that. It is open for business and would like to invest some of the money from its membership into social housing. The SPV being designed by the ICSH is being worked on. It hoped to complete it last autumn. It will be completed in this quarter and will be available for credit unions in general. I was clear last year that one of the credit union representative bodies, CUDA, is ready and able and wants to invest. The Deputy can check the record.
I certainly will. I wrote to the Minister, Deputy Eoghan Murphy, at the turn of the new year, seeking clarification on exactly where that was. I have listed a number of questions that need to be answered. I ask the Minister of State to clear up this confusion. The position that he has outlined is being contradicted by others-----
It would be sad if I had to stand during Question Time. Any Member has a right to make a point. The Minister of State will have a right to answer. Please do not interject. I am only complying with the rules of the House.
I am seeking answers and clarification. Not one cent of credit union money has been invested in social housing. As the Minister of State said, this was proposed in Rebuilding Ireland and the programme for Government. It was also mentioned in the confidence and supply document and I want it delivered. Most Members want a new stream of funding that will help to build the Minister's social homes and ramp that up. We need clarification. That is why I wrote to the Minister in the new year, asking a series of questions. To be helpful with this, and not to try to get the Minister of State excited again, will he meet representatives of the credit union sector and the Irish League of Credit Unions to clarify where he sees this process going? We all want to see this delivered. I want this model of funding for social homes to be delivered. Fianna Fáil wants it delivered but there are many unanswered questions, which require clarification.
I am happy to meet representatives of the sector. We want the money invested in it and I cannot be any clearer than that. It is in black and white in Rebuilding Ireland that we want this to happen. We worked hard to make it happen. It should be happening. There is money to be invested. Mechanisms have been designed by one credit union organisation and a SPV is ready to go. I made an appeal to AHBs, if they want to use that money, to engage with that sector. Another model is being designed in conjunction with the ICSH which we cannot implement as a Department and Government. We cannot design it for the credit union sector. It has to design its own. That work has been ongoing. It was not completed last autumn and is still not complete. It expects to complete it this quarter. That is one process. There is another process which is ready. I wish the Deputy would not repeatedly say that I gave the wrong impression last year. I said last year, when I was speaking to the sector, that there were mechanisms to draw down credit union money. I encourage that they be used. I would be happy to meet them. We have met them before to help them through this process.