Cian O'Callaghan (Dublin Bay North, Social Democrats)
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84. To ask the Minister for Housing, Planning, and Local Government why his Department failed to spend its 2022 capital allocation for new build housing; the action he will take to ensure this does not happen in 2023; and if he will make a statement on the matter. [3828/23]

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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Close to €1 billion was allocated for capital spending to the Department of Housing, Local Government, and Heritage was not spent as originally allocated in 2022. How much of the unspent capital housing budget was surrendered back to central Government by the end of 2022?

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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I thank the Deputy for his question. Budget 2022 provided record levels of investment to support housing programmes, levels which we have not seen before, including for the delivery of increased levels of social and affordable homes. Exchequer funding of €4 billion was made available, comprising €2.6 billion in capital and €1.4 billion in current funding. Additional capital funding was available through the Housing Finance Agency and the Land Development Agency.

As I have already stated publicly, my Department put arrangements in place to carry over the full 10% capital allocation from 2022 to 2023. This amounted to €340 million and the detail of the allocation of that funding was published in the 2023 Revised Estimates Volume, REV. Section 91 of the Finance Act 2004 provides for the carry over of up to 10% of the REV allocation, which is the capital, from one year to the next. The capital carry over is a practice which is used across Departments to ensure the continuity of funding for capital projects.

As Deputy O'Callaghan is no doubt aware, the impact of the war in Ukraine has genuinely presented significant challenges as we faced high levels of construction inflation, significant increases in energy costs and issues with the supply chains. These are just facts and, in particular, there was an issue around supply chains for building material. These issues caused delays in some large social housing projects as contractors faced concerns that the costs of delivering the projects exceeded prices agreed under public works contracts.

To address some of these challenges, in May 2022 the Government responded with the introduction of the inflation and supply chain delay co-operation framework.

That framework allowed for the payment of up to 70% of the increased costs to contractors by local authorities, with detailed guidance provided to support its implementation. Delivery recovered very strongly in the second half of the year, as I said it would and as was anticipated. However, the delays encountered meant some projects did not progress as expected during 2022. This in turn reduced somewhat the levels of capital claims received by the Department from local authorities.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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It is quite incredible that this Government is using cost inflation to justify an underspend of almost €1 billion on the original allocations. I asked the Minister how much of the unspent capital housing budget was surrendered back to central government at the end of 2022. He did not answer that at all in his reply so let me help him. A total of €337 million that was allocated to local authorities to build homes was reallocated elsewhere, including to pay down local authority debt. A further €340 million was carried forward into 2023 and, according to December's Fiscal Monitor, at the end of 2022, a further €249 million was not spent, of which €231 million was on the capital side. That is a total of €926 million that was not spent but carried over, reallocated or surrendered back to the central Exchequer. How can the Minister stand over such a huge underspend in the middle of a housing disaster?

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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I will refer to a couple of the examples used by the Deputy. He mentioned the paying down of local authority debt. Does he know why they are doing that? There are encumbered sites throughout this country that have not been able to be developed for the social housing the Deputy says he wants because the local authorities have been carrying a very significant debt, some of them for up to two decades. We have used that reallocation to local authorities on the basis that they will deliver and start to build on 38 different sites we have identified throughout the country. These are for much-needed, additional social and, in some instances, affordable homes. We have already engaged with local authorities on that.

There is a reality behind what the Deputy said about not hiding behind cost inflation or issues we have with the supply chain. Will we just forget the fact there was a reality in April, May and June of last year regarding difficulties getting product and material, which have slowed down some projects that will be delivered in 2023 as opposed to 2022, hence the capital carryover? The Government has to live in the real world too. We cannot just wish these things away and that issues do not happen. We have not had a clear picture this year or last year, but in 2022, we will deliver more new-build social homes than we have done in decades. I expect that at the time we announce those figures, the Deputy will be the first to welcome them.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I do not need to tell the Minister that, in the real world, under his position and tenure, rents, house prices, the number of people in their 20s and 30s still living in their childhood bedrooms, and homelessness are at record levels. Under his tenure, we now also have a record level of the housing budget's capital spend not being spent and being reallocated, sent back to the Exchequer or carried over. That is some level of records.

On paying down local authority debt, the Minister knows that money was allocated to build real homes that people were meant to move into this year. Instead, some of it was diverted to paying down loans. If that was such a good idea, why did he not decide to do it at the start of the year? He decided to do it towards the end of the year, when he was failing to spend the money he was allocated to build homes. What will he do to ensure this not happen again? Every year he has been Minister, hundreds of millions of euro have been carried over into the following year, which were meant to be spent building homes.

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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On the delivery of our affordable housing programme, I remind the Deputy that he and his party voted against the Affordable Housing Act. For the very people who are living with their folks-----

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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It was a flawed Bill.

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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-----later than they would like to, we have now provided avenues for them to get into home ownership. That is why 16,700 first-time buyers were able to buy their own homes in the past 12 months, many of them through the first home scheme, which had more than 800 approvals. Again, the Deputy's party opposed that scheme. Many of them used the help-to-buy grant that gives them €30,000 of their own tax back, which, again, the Deputy opposed. He cannot have it both ways. We will never turn this around-----

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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Will you answer my question about capital underspend?

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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-----in a year or two years. However, I am pleased to say to the Deputy that we will quite significantly exceed the target of 24,600 in overall delivery set for 2022, which is a big step up from the previous year. We have a very good pipeline for 2023. We will deliver more new-build social homes in 2022 than we have done in decades.

I am fully open to criticism. That is what I would expect from the Opposition and that is fine. However, some constructive criticism and acknowledging progress is also important, as is acknowledging the Deputy's position that any of this significant legislation we have brought forward to enable people to buy their own homes-----

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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The Government did not accept our amendments.

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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-----or to build on State-owned land, such as that in respect of the Land Development Agency, was again opposed by him.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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You mean compulsory purchase order powers.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Government has not built a single house-----

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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I know what Deputy O'Callaghan is against-----

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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-----four years later.

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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-----but I have no idea what he and his party are for.