Mairead Farrell (Galway West, Sinn Fein)
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102. To ask the Minister for Public Expenditure and Reform further to the increased capital expenditure set to take place in the coming years and the current delays in commencing capital projects, his views on and whether he favours investing in a State construction body or an expanded role for the Office of Public Works; and if he will make a statement on the matter. [32592/21]

Mairead Farrell (Galway West, Sinn Fein)
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One line in the ESRI report stuck in my mind which stated, "it is evident that the domestic construction sector is unable to meet the scale of production required". Given the current delays in commencing certain capital projects and the longer-term problem of market supply meeting demand, has the Minister considered investing in a State-owned construction body or an expanded role for the Office of Public Works to help us meet the demand?

Michael McGrath (Cork South Central, Fianna Fail)
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As I said earlier, capital expenditure is at an all-time high in the history of the State, with a commitment to maintaining and further increasing this over the lifetime of the Government. The overall level of capital expenditure in 2021 stands at almost €11 billion when capital carryover is included.

Efficient public capital investment means quality investment decisions supported by robust evidence and analysis to maximise outcomes from limited public resources. This is not a static space and public bodies are continually working to improve processes and frameworks to ensure value for money in capital expenditure.

As the Deputy will be aware a review of the national development plan is now well advanced. A key focus of the review is on the capability and capacity of the public service to deliver the ambitious targets for investment that are set out in the plan. A range of measures are already under way to increase public sector delivery capacity. I touched on those earlier. I also referenced the EY report, Supporting Excellence: Capital Project and Programme Delivery Capability Review. I have acknowledged the good delivery capacity available in large parts of the public sector where responsibility sits for delivering major public investment projects.

However, the report notes that there are longer term capacity challenges in other sectors, some of which will see a major ramping up in capital investment over the life of the national development plan. These sectors may require an upgrade in capacity or enhanced support from the centre. This strategic and targeted upgrade will be the focus of Government investment in the medium term. While the Office of Public Works will have a key role in this workstream the establishment of an over-arching State construction body is not envisaged at this time.

A key recommendation of the report is that the national investment office within my Department should convene an action team comprising experts from across the public sector to tailor and set out a roadmap for the implementation of the recommendations in more detail. That work is under way. That action team was established in March. I can talk about that more presently.

Mairead Farrell (Galway West, Sinn Fein)
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We are in a situation at the moment where demand consistently outstrips supply. This puts upward pressure on house prices and rent. The Minister mentioned in the past number of questions high expenditure in terms of capital. We need to look at the reality on the ground as well. People cannot afford housing or rents. Again today the Central Bank has said that house prices will rise further because of the shortage of affordable housing. Obviously, this is great news for the developers, bankers and investment funds but it is bad news for ordinary families and workers.

I am concerned. The NDP anticipates a further 1 million additional people living here in the coming 20 years. That is great news but I am struggling to see how we are going to house people or have affordable housing for people under the current model. I do not believe there is the ambition to follow through.

Michael McGrath (Cork South Central, Fianna Fail)
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Certainly, we need to increase housing supply not only from the State but from the private sector. As the Deputy is aware, a range of domestic bodies and commentators have pointed to the need for output of somewhere between 30,000 and 35,000 units per annum. Pre-covid, the figure had increased to a little over 20,000. We are still a long way short of where we need to be.

The State will play its part in the delivery of housing - make no mistake about that. We are also going to play our part in supporting the private sector to deliver housing all over our country because that will be needed. The State cannot do it all on its own. We need to ensure adequate finance is available. We must ensure land is serviced and that zoned land becomes available for development. We have to try to remove the bottlenecks that exist and ensure that it is viable to build housing throughout the country. We have to ensure we invest in transport, climate action measures, education, healthcare and a wide range of other areas.

Deputy Farrell correctly identified that Project Ireland 2040 anticipates an increase in the population of our country by 1 million people in the coming 20 years. That underlines the scale of the challenge we face to provide the necessary infrastructure.

Mairead Farrell (Galway West, Sinn Fein)
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I hope the Government will start to play its part in the delivery of housing, especially affordable housing that people can actually live in. The reality is that we have seen for a long number of years with previous Governments and this Government a failure to do that. That is why we are in the situation we are in. We are where we are because of political decisions. It is simply not good enough. I hope the Government will be ambitious and will try to deliver affordable housing so that people can live in the houses but at the moment that is not a reality.

There is also the problem of getting value for money for the taxpayer. We have seen serious problems with bid rigging. Some senior officials have mentioned that as well. Is there merit in having a state-led construction company that can build, sell at cost, create jobs and compete with private developers to drive prices down? That is what we need. We need far greater supply but it must be affordable for people so that people can live in those houses.

Michael McGrath (Cork South Central, Fianna Fail)
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The Deputy raised the question of affordability in the area of housing. The Government is now putting in place an affordable housing scheme. Until now, such a scheme did not exist. Through the co-operation of the House, hopefully, we are enacting legislation that will provide an affordable housing scheme in this country that will be of benefit to thousands of individuals and couples who want to buy their first homes. In addition we are starting the delivery of cost rental homes with units coming on-stream later this year. We have the serviced sites fund. It is up and running with funding of €310 million. The Minister for Housing, Local Government and Heritage, Deputy O'Brien, is enacting provisions to provide for a shared equity scheme.

In addition, we have the Land Development Agency. Once it is underpinned by legislation it will benefit from investment through the Ireland Strategic Investment Fund and this can greatly assist in the delivery of social and affordable, cost rental and affordable purchase homes throughout the country, especially in our cities. Its role could be significant and I look forward to seeing it deliver on the potential that I know it has.