Thursday, 18 April 2019
Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Action Plan for Housing and Homelessness
4. To ask the Minister for Public Expenditure and Reform his views on the impact on public finances of the heavy reliance on leasing, housing assistance payment, HAP and the rental accommodation scheme, RAS, in the housing policy; and if he will make a statement on the matter. [18075/19]
We are talking about the potential for vast cost overruns in the hospitals sector. The Government's reliance on the private sector to resolve the housing crisis is not only a disastrous social failure, it means the cost will be extortionate. Private developers and landlords will have the State over a barrel for well in excess of €1 billion and perhaps €2 billion a year for the foreseeable future while costs simply go through the roof. Is this not economic madness?
To ensure an effective and efficient response to urgent social housing needs throughout the entire country, a variety of mechanisms are provided for under Rebuilding Ireland, the Government's Action Plan for Housing and Homelessness. These include build, acquisition, lease, HAP and RAS. There are a variety of objectives behind this mix of delivery mechanisms, including speed of delivery, the appropriateness and efficiency of support and value for money for the Exchequer. HAP and RAS utilise private rented tenancies to deliver speedy and efficient responses to social housing requirements. Under budget 2019, the current expenditure allocation for these programmes amounts to €557 million, which funding will deliver more than 17,000 units of much needed social housing solutions. In addition, just over 2,000 new social housing units will be provided by local authorities and approved housing bodies, AHBs, in 2019 through a variety of leasing initiatives. There is also provision of €155 million in current funding in 2019 for the ongoing costs associated with leasing. It is important to remember that leasing maximises delivery, offers a flexible and efficient response and optimises the use of available resources for the State.
While we have increased our build programmes significantly, it remains the case that more homes can be provided through leasing than could reasonably be expected to be delivered under construction and acquisition programmes alone. For this reason, 10,000 of the 50,000 new social houses to be delivered under Rebuilding Ireland will be leased from a range of different sources. Delivery of new build and acquisitions has been steadily increasing over the first three years of Rebuilding Ireland, with acquisitions rising from 2,000 in 2016 to 2,600 in 2018, while new builds have risen from 3,000 units to just under 5,000 over the same period. In recognition of the need to accelerate the delivery of additional homes, €1.25 billion has been allocated for the delivery of 10,000 new social homes in 2019. This includes an allocation of €747 million for the local authority housing capital budget, which is an increase of one third over 2018.
Rebuilding Ireland has a target of 137,000 social housing units. Of those, it is intended to source 104,000 from the private sector through acquisition, lease, RAS and HAP. The cost of that will be extortionate. Indeed, I ask whether the Government has massively underbudgeted for HAP in 2019. The Minister says €423 million is the allocation for an additional 16,700 HAP tenancies in 2019. However, the allocation for only 43,000 HAP tenancies the previous year was €417 million. That means there will only be €6 million in additional funding yet there will be an extra 17,000 HAP tenancies. In fact, the number of HAP tenancies will probably exceed significantly what the Minister suggests to compensate for the fact that Government has failed to meet its construction targets. Current and capital expenditure going to the private sector at extortionate cost will probably reach, when one throws in NAMA and everything else, €2 billion. It is madness when we could build the houses for a fraction of the price on public land.
We need to look at what the figures are at the moment and at the balance between what we are spending in schemes like HAP and RAS and what we are spending to directly deliver homes. I want to put those figures on the record. The amount being spent to make use of existing houses is €526 million for 2018.
No. I will come to that. It is €143 million for RAS, €277 million for HAP and €106 million for leasing, which is a total of €526 million. To build new units, we provided for spending of €1.16 billion in 2018, of which €742 million is to build new homes and €420 million is to acquire homes that are being built across the State. Those are the figures. When the Deputy puts to me a charge in respect of the mix between HAP and new building, it is €1.16 billion for build and acquisition and €526 million for the various schemes he has raised.
As the Deputy may be aware, the plan is that, by 2020 or 2021, we will be housing more citizens in local authority and AHB homes than through the private rental scheme.
Let me state the obvious - we have a worsening housing crisis. Today's report from the Ombudsman indicates that. We are going to spend €100 million building new hubs this year. The average cost of keeping a household in a hub is €100,000 per year. Two years of such expenditure would build a council house on public land. In that light, the suffering of the children is also madness from an economic point of view.
I do not understand the overall current expenditure figures for this year. In the budget book, the Government has allocated €423 million for HAP, €155 million for leasing from the private sector, €134 million for RAS, which goes to the private sector, and €146 million for homelessness services. All of that adds up to €858 million. I cannot understand how the €423 million for HAP will be sufficient, given that the Government allocated €417 million for it last year and has claimed that we will have an additional 16,700 HAP tenancies this year. Despite that, there will only be an extra €6 million allocated to it. That does not add up.
At each point in the year, we try to ensure that we are able to provide the right level of funding for HAP. The reason we have HAP in the first place is to ensure that, while we continue our work on rebuilding homes and building new ones, the citizens who are waiting for that housing to become available have homes and access to accommodation. That is why we are using this funding. Were we not making use of that kind of funding to ensure that people had access to accommodation, the Deputy would be criticising us for that as well. He would say that we were not doing enough to support people while we were building new homes.
The Deputy made a point about our investment in the delivery of new homes, particularly within local authorities. This year, we are involved in spending €742 million on building new homes. In 2017, that figure was €334 million. We are investing more in building new homes. While they are being built by local authorities and AHBs, we are using funding to ensure that people have access to accommodation.