Tuesday, 29 January 2019
Ceisteanna - Questions
Cabinet Committee Meetings
I propose to take Questions Nos. 5 to 12, inclusive, together.
Cabinet committee D works to ensure a co-ordinated approach to the delivery and ongoing development of policy on infrastructure investment and delivery, housing and climate action. The committee last met on 1 February last and the next meeting is scheduled for Thursday, 31 January.
Although issues relevant to climate change can arise across the various committees, including committee C which covers European affairs, substantive matters of climate action policy are progressed through Cabinet committee D. Significant work is under way across each of the areas covered by the committee through Government Departments and agencies and a range of interdepartmental groups, such as the climate action high level steering group and the Project Ireland 2040 delivery board. In addition, these matters are regularly considered at meetings of Government and in bilateral meetings with the Ministers responsible for the issues.
Good progress is being made on the delivery of Project Ireland 2040. Through the national planning framework, it sets out our strategic 20 year vision for Ireland's future, balancing rural and urban development and links it with the capital investment of €116 billion over ten years to meet the infrastructure needs of our growing population. The four funds launched under Project Ireland 2040 have a total of €4 billion to invest across the areas of rural and urban regeneration and development, climate action, and disruptive technologies innovation. The first round of funding allocations under these funds, amounting to €276 million, was announced late last year. These funds will leverage further private sector investment in innovative and targeted projects that deliver on the aims of Project Ireland 2040.
The Land Development Agency, another cornerstone initiative of Project Ireland 2040, was established on an interim basis in September and is working to ensure the optimum management of State land through strategic development and regeneration, with an immediate focus on delivering homes, including social and affordable housing. Housing continues to be a priority for the Government and we have seen strong growth in housing completions and in leading indicators, such as planning permissions, commencement notices, and housing registrations. There has also been a strong delivery of publicly funded social housing in 2018, and the finalised figures will be published by the Minister in the next few weeks. We are very aware of the significant challenge in meeting housing demand and tackling the ongoing issues in the housing market. For this reason, budget 2019 provided an increase of 25% in the total housing budget, bringing it to €2.3 billion.
Delivering on our EU 2030 climate commitments and our objective to transition to a competitive, low carbon, sustainable economy by 2050 are also core priorities of Government. We are investing €22 billion in climate action through the national development plan to ensure our future growth is regionally balanced and environmentally sustainable.
Budget 2019 provides for a range of provisions to lower carbon emissions and to improve sustainability, including more than €200 million for agri-environmental actions to the rural development programme and more than €164 million for energy efficiency and renewable energy projects.
The Minister, Deputy Bruton, is currently preparing an all-of-Government action plan on climate disruption and is working with colleagues across Government to develop new initiatives in electricity, transport, agriculture, heating and other relevant sectors. The action plan will build on the progress to date and set out the steps which must be taken to make Ireland a leader in responding to climate change.
On the children’s hospital overrun, the Taoiseach informed the House that the impact on the capital programme this year would be €100 million and to the tune of €450 million between now and 2021. In terms specifically of the €100 million worth of projects that will not be advanced this year, has he had an opportunity to look across Departments, particularly the Department of Health? Can he specify the projects that will not be advanced this year to meet the requirements of reducing other projects to the tune of €100 million?. I would be obliged if the Taoiseach could be specific because there is great anxiety about every project now in terms of wondering where the axe will fall.
On the Cabinet decision to approve the children’s hospital, what specific sum was approved by the Cabinet and did that decision involve an absolute commitment that it was the final figure and that there would be no overruns beyond that?
On the capital programme generally, are there agreed public private partnerships to be advanced in the coming year and, if so, what are they?
Regarding housing, it is important the Taoiseach would give Deputy Boyd Barrett an answer to his question. I would add to it a question I asked last week, namely, could there be a review of the disparity of the income limits between local authority because there are some now that are ludicrously low?
I want to ask about cost rental and affordable housing. No affordable housing scheme has been in place since Fine Gael and, let it be remembered, the Labour Party in government scrapped it in 2011. Now we are in the midst of an unprecedented housing crisis, of which Deputy Boyd Barrett has given examples. Dublin City Council, for its part, has led from the front. It has ambitious plans to develop both cost rental and affordable housing. It has agreed to build 330 cost rental homes, the first in the State on the old St. Michael's Estate in Inchicore and another 300 are planned for Ballymun. It also wants to deliver more than 2,000 affordable homes as part of the Poolbeg strategic development zone, SDZ, in Cherry Orchard and in Coolock as well as 325 homes as part of the land initiative. However, none of this can be delivered without a scheme that lays out the criteria for who may be eligible for such homes, the income levels that will apply, and on what grounds homes may be allocated. That needs to be urgently addressed. I referenced Dublin City Council but I know this applies to a number of local authorities. The absence of this scheme is holding back projects from proceeding. When will we see such a scheme? When will it be published?
I thank the Taoiseach for his reply. This time last year he was spending large amounts of public money not just promoting the new national development plan, NDP, but also advertising specific projects in different parts of the country. We all remember that. The project about which he talked most was the national children's hospital. He said many times that the NDP was fully costed and timetabled. As he was forced to admit last month and as the Joint Committee on Health has heard, there has been what has been described as a catastrophe cost overrun on the children's hospital and on the costs that were provided by the Taoiseach as Minister for Health at that time and in the NDP which he launched only a year ago. On a series of occasions he has attempted to downplay the impact of the overrun, as Deputy Howlin has said. The Taoiseach has been suggesting there will be a benign reprofiling of the implications in later years so we should not be too bothered about it, but that is not sustainable. It suggests he is desperate not to admit the impact of what has happened on the many projects he has launched. We need to consider the impact of the €1 billion extra that will be required. The Taoiseach said it would be €650 million, but my understanding is that the Cabinet apparently signed off on a figure of €1.7 billion prior to Christmas.
Some are saying it was €1.7 billion. It can be divided into two amounts, €1.4 billion and €300 million, but that is €1.7 billion in total. Why will this overspend and the dramatic increase in construction inflation about which we have been told in terms of the hospital not happen with other healthcare projects and NDP projects across the board? Presumably the €61 million we were told is needed for fire safety in the children's hospital will apply pro rata to all other healthcare projects.
The issue is whether the Taoiseach is willing to be honest with the public and publish the exact impact on the NDP of both this overspend and the increase in costs which will apply to all other projects across the NDP. He spent hours last year defending his marketing unit on the basis of the need for the public to know what the Government was planning. If these plans change and if there has been an impact on them, surely the public deserve to know. It seems that on one project alone the NDP is way out of kilter in contrast to what was originally suggested would be the cost. I have always described many of the projects in the NDP as a bit fanciful. I know of one hospital that was included because the Minister rang up and asked people to put a proposal together because if they did not get it into the NDP it would not be considered. The Taoiseach can take a pick of ten, 15 or 20 years for that project to be realised. That is the kind of stuff that is going on.
The Taoiseach said in his reply that the Government is preparing an all-of-government action plan on climate disruption. Can he confirm it will fulfil the exact same role as the national energy and climate action plan, which we are compelled to agree with the European Commission before the end of this year under new EU governance climate legislation? It is important we have clarity and that this proposed plan is not the same plan. The plan to which we are required to commit under European planning is the key one. Given that we know we have to reduce our emissions in the non-emissions trading sector by at least 100 million tonnes cumulatively in the next decade, and we know now, after the fact, that the national development plan will deliver at best only a third of that reduction, does the Taoiseach agree we will have to change the national development plan if we are to meet that national climate target we are mandated to meet under European legislation? We will be fined extensively if we do not reach this target and it would deliver major other benefits if we promote public transport, better insulated houses and so on? Is the Taoiseach's action plan for climate disruption the same as the European national energy climate action plan we are required to implement? Will he revise the national development plan to help us meet the goals to which we have already agreed?
I have already asked a question about income thresholds and I will add this further comment. The Taoiseach has gone on and on about a social mix in housing but the failure to raise the income thresholds for social housing makes a nonsense of social mix because nurses, council workers and people who are on low-to-average earnings are being whacked off the social housing list. That completely eliminates any notion of social mix and at the same time no affordable housing scheme has been delivered so no council can move ahead, in reality, with an affordable housing scheme.
I want to ask questions about the national children's hospital. The Taoiseach spoke earlier about his party's fiscal prudence and said that Fine Gael prides itself on its financial management as against the irresponsible populous representatives he accuses us of being. How did he manage to mismanage an infrastructural project of this importance and this scale, such that we have a 300% increase in the costs from the original tender? Did anybody bother to look at the rotten record of BAM, which got it and was €120 million lower than the nearest other bid. That should have raised alarm bells. It built car parks in Holland that collapsed. It had to make settlements with Cambridgeshire County Council over massive overruns on road projects. It built the Ballyfermot Leisure Centre on which there was a significant overrun and it had a five-year long battle with the council about who would pick up the tab for the overrun.
There were also significant overruns in the Port of Cork. Did anybody bother looking into Mr. Costello's record on a project board? He was involved with significant overruns when working for Sisk in Poland and these nearly led the company to collapse. Is it any wonder he stated that there was no problem with BAM's tender because he had a record of it?
I do not think there is any doubt that one of the greatest scandals of this Administration's term is the overrun relating to the children's hospital. People are scandalised by it and how the figures have moved in this extraordinary way. Does the Taoiseach have an upper limit regarding what the hospital is going to cost? Hospitals are often broadly priced in the context of the cost per room. Some years ago, it may have been €1 million per room. Allowing for inflation, if we increased that by 100% to €2 million per room, we would have a cost of approximately €800 million, which is consistent with figures from around the world. Has the Taoiseach, as head of the Executive, instigated any inquiries? There is no doubt that this is a disaster for the country. We all want to see the hospital built.
As the Taoiseach, who is my constituency colleague, knows, I made it clear that I favoured a greenfield site for the hospital somewhere along the M50, with easy access that would not give rise to the costs associated with the site that was eventually chosen by the then Minister for Health. That is all in the past. We now have a project in respect of which the costs increase daily. Has the Taoiseach washed his hands of the matter? He was Minister for Health so he is intimately familiar with it. Has he placed an upper limit on what will be the cost? Has he compared it with the cost of other hospitals for children across the globe? Has he decided to conduct a proper investigation into what has happened to hardworking people's taxes and with the diversion of money from desperately-needed projects in order to meet these highly inflated costs?
The Cabinet decision relating to the site of the national children's hospital was made with the full knowledge of the then Minister for Public Expenditure and Reform-----
In fairness, there is a bit of that going around on all sides.
To answer Deputy Boyd Barrett's question, the income thresholds relating to social housing are under review. I do not have a timeline for a decision from the Minister but they are under review and we acknowledge that as incomes rise, more people become ineligible for social housing, which is happening at a time when house prices are rising faster than incomes. That may be a change but when incomes rise at a lower rate than house prices, it makes sense to increase the thresholds. I agree on that. We do not have the new thresholds yet.
I do not. The work is under way. A significant part of it is supply. I am sure everyone would agree that our objective is not to get more people on to the social housing list but to provide individuals with social housing so that they come off that list. Approximately 20% of our total housing stock should be public or social housing. It is currently only 10% or thereabouts. From here on, we need to ensure that 20%-----
The houses would be owned by people too. Some 600,000 people own their houses. Another 300,000 have mortgages. This means that 900,000 homes are either owned outright or mortgaged. At least 20% of new homes need to be social or public housing units. We do not have the exact figures yet but we think between 18,000 and 20,000 new homes were built in Ireland last year. That is more than in any year this decade. Approximately 4,500 of those were built by local authorities or approved housing bodies. That does not include acquisitions and leasing, which would bring it to a much higher level. It is over 20%. I do not know when we last had 20% of all new homes being built by public bodies but that is where matters stand. It will take a number of years to catch up.
The capital budget for this year is €7 billion, 25% more than last year. We will need to re-profile €100 million of that. This has not been done yet but we think it will be achieved by deferrals of weeks or months and will not require the outright cancellation of any projects. Savings may arise for reasons outside our control, such as other projects being deferred, not as a result of any Government decision but because of planning issues, judicial reviews and so on. I appreciate that it is causing anxiety and that many people feel the projects they are interested in are being delayed as a consequence of overruns relating to the national children's hospital. That is not the case and we will try to clarify that as soon as possible. I hope that today's decision by Cabinet to go ahead with the N4 to Sligo and the Castlebaldwin to Collooney route is evidence that we are going ahead with these projects and not suspending them.
I am pleased to see that the price for the N4 project was reasonable and in line with expectations. There are not overruns across the board. Many projects are costing approximately what we anticipated they would. Works will start on the new runway for Dublin Airport in the next couple of weeks. While that is not funded by the Exchequer, it is funded under Project Ireland 2040.
These projects are happening. When it comes to any capital project, one really only knows what it will cost when the final tender comes in. It is a bit like putting a house on the market. One can estimate what it might cost to buy but it is only when it goes on the market and a final tender is made that one knows what it will really cost. I am not aware of any new public private partnerships, PPPs. I anticipate that the M20 will be a PPP. PPPs worked well for previous road projects but there are not any that I am aware of. The amount approved by Cabinet for the children's hospital was €1.446 billion but that is not the full Exchequer contribution. That contribution is €1.343 billion, which is slightly lower. The reason for that is that the car park and retail elements are included in the figure but will be commercially run. It is also anticipated that some funding will be raised by philanthropy-----
The figure I have seen used, €1.73 billion, includes costs which are separate to the capital costs of building the hospital. I refer, for example, the cost of integrating the three hospitals into one. That is current expenditure. It also includes the electronic health record that we would have been doing in any event - for example, in maternity hospitals - even if we were not building the children's hospital. Interestingly, the overall amount includes €39.98 million which was spent on the Mater campus, largely by Governments prior to 2011 or 2012. When people use the figure of €1.73 billion, they are including expenditure that would have arisen even if the new hospital had never been built. They are including VAT and costs at the Mater incurred by a previous Government in respect of a hospital that was never built.
The Taoiseach should not be pathetic.