Thursday, 22 May 2008
Public Private Partnerships
I welcome the Minister of State, Deputy Finneran, and wish him the best of luck in his new role.
I tabled this Adjournment matter in light of the events which took place this week. Five housing projects in the city of Dublin, due to be delivered for those most in need of them, were cancelled or have been significantly delayed owing to problems with the public private partnership scheme. Four of the five affected projects are in my constituency. I am very much aware of the needs of the communities in O'Devaney Gardens, Infirmary Road and Seán MacDermott Street. The people looking for these housing projects to be delivered and community facilities to be built are, by and large, those who have had the positive things which have happened in Irish society pass them by. These people are in the greatest need in terms of housing and the facilities these projects were due to deliver. Through no fault of their own, the developer in question has pulled out.
Having had discussions with Dublin City Council, it is clear the only two options open are to restart the public private partnership process and to try to get the ball rolling with another developer or for the council to reallocate the capital funding it has and use it to kick-start these initiatives or to fund them itself.
I call on the Department of the Environment, Heritage and Local Government and the Government to give every support they can to Dublin City Council to ensure the delivery of these projects is not impeded and that they are delivered as quickly as possible given the distress caused to the community and the people involved. It is very likely that Dublin City Council will have to step in and provide capital funding to deliver these projects. That will require substantial support from the Department of the Environment, Heritage and Local Government and the Government. We must not reach a stage where we believe it is wrong to commit taxpayers' money to provide social housing and housing projects for communities which need them. The Department of the Environment, Heritage and Local Government may need to step in quickly. I would like to hear the Government's response to this matter and I thank the Minister of State for coming to the House to give it.
Michael Finneran (Minister of State with special responsibility for Housing, Urban Renewal and Developing Areas, Department of Environment, Heritage and Local Government; Roscommon-South Leitrim, Fianna Fail)
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I thank the Senator for his good wishes to me on my appointment. I also thank him raising this matter. It is one of particular importance to the communities in the areas concerned which are naturally disappointed with this week's developments and have concerns about the implications for the regeneration of their areas.
To put the matter into context, I emphasise that the use of public private partnerships is only one of many approaches to the delivery of social housing. Significant progress on social housing is also being made in other ways, namely, through programmes funded directly by the Exchequer, through the Part V mechanism and through long-term leasing arrangements.
The recent announcement by Dublin City Council will not prejudice the overall ambition of the social housing investment programme either in Dublin or nationally. My Department is providing funding of more than €1.2 billion this year alone to support the housing programmes of local authorities around the country.
More than €250 million from the 2008 investment programme is being provided to fund housing construction and regeneration activities in the Dublin City Council area. Building on the success of recent years which, not taking account of units provided as part of regeneration programmes, saw the completion of 3,000 social houses in the city council's area since 2002, I am confident that the council will continue its strong performance in delivering social houses in 2008.
Following the announcement by the city council that the public private partnership projects which it has with Castlethorn-McNamara's in St. Michael's Estate and O'Devaney Gardens, and with NcNamara's on Dominick Street, Convent Lands in Seán MacDermott Street and Infirmary Road will not now go ahead as planned, my Department is engaging closely with the city council on the next steps. The city council is committed to working with its tenants in these areas to explore the options for regeneration. It is envisaged that the council will meet shortly with the regeneration boards for St. Michael's Estate, O'Devaney Gardens and Dominick Street to discuss the issues involved.
The city council has also undertaken to examine all the social, economic and legal implications of the developer's decision and, following its discussions with stakeholders, will put forward alternative proposals so that the process for the regeneration of these areas can proceed. I assure the Senator and the House that my Department will continue to engage actively with the council in that regard.
The announcement in regard to the five projects in Dublin requires us to look more closely at our PPP model as it applies to the housing area. PPPs are identified in the Government's housing policy statement, Delivering Homes, Sustaining Communities, as a positive means of supporting sustainable communities through encouraging social, income and tenure mix in an economically efficient way. At present, local authorities use a partnership model to develop these projects whereby the housing authority will optimise the use of its existing land holdings to leverage private finance. The developer in turn provides the authority with an agreed number of social and-or affordable housing units, as well as funding the overall development in whole or in part from the sale of private housing units.
The changes in the overall economic climate and within the residential development sector, which were cited as factors influencing the decision of the developers involved in the Dublin City Council projects, must be carefully considered. This will form part of the Department's consideration of any potential impacts for the wider PPP programme.
It is clear that we will still need private finance, in whatever form this takes, if we are to achieve our objective of building sustainable, mixed communities. It is not acceptable for us to return to the age of sprawling social housing estates which we now know contribute so significantly to economic and social deprivation in the areas involved. The Department will continue to actively engage with the city council in taking forward its full examination of all the issues involved in the future of the five regeneration projects affected by this week's announcement, with a view to ensuring that these projects can progress as quickly as possible.