Written answers

Wednesday, 6 April 2016

Department of Environment, Community and Local Government

Social and Affordable Housing

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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785. To ask the Minister for Environment, Community and Local Government the proposed public-private partnership model of housing provision at a site (details supplied) in Dublin 11; the cost-benefit analysis that has been carried out on this proposal; if the rents to be paid will be differential rents; the steps he is taking to ensure taxpayers get value for money; and if he will make a statement on the matter. [6266/16]

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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The Social Housing Strategy 2020,launched in November 2014, provides for an investment with a capital value of €300 million in social housing through the public private partnership model.  In total the programme is expected to deliver 1,500 social housing units. To enable delivery to commence as quickly as possible, the PPP programme is being rolled-out in three bundles.

The identified site is one of six locations in the greater Dublin area and in the East of the country that were announced as part of the first bundle of sites on 13 October 2015.  The social housing is being developed at these six sites in co-operation with the local authorities in each area.  Two of the sites are located in Dublin City with one each in South Dublin, Kildare, Wicklow and Louth.

In accordance with guidance,which is published by the Central PPP Unit in the Department of Public Expenditure and Reform, there are four specific value for money, or VFM, tests that are applied in the case of PPPs over the course of the planning and procurement process.  These tests focus on assessing whether or not the PPP approach compares favourably with the alternative cost of using traditional procurement to achieve the same result as the PPP.  The purpose, sequence and format of the four VFM tests in the PPP approval process are set out clearly in the central PPP guidance in order to ensure that all PPPs are regularly assessed and do, indeed, offer value for money.  These VFM tests apply in respect of the social housing PPP programme.

In order to assess the suitability of social housing to be delivered as part of a PPP programme, in 2014 the National Development Finance Agency prepared a Provisional PPP Assessment Reporton behalf of the Department of Finance, Department of Public Expenditure and Reform and my Department.  This report provided a provisional version of the first of the four VFM tests that are required for all PPP projects.  The other VFM tests are being/will be undertaken as part of the process of assessment and planning involved in the further development of the bundles of sites identified for the programme.

The units to be delivered under the programme will use what is termed an ‘availability-based’ PPP model, in which a private sector company designs, builds, finances and maintains the social housing units in return for a ‘unitary payment’.  Principally the new model is purely to facilitate the delivery of social housing units for the State.  It does not include private housing.  The ‘availability based’ model being applied has been used successfully in Ireland for over 15 years to deliver roads, schools and courthouses.  It involves the procurement of a consortium to design, build, finance and maintain, for 25 years, social housing units on sites provided by the State.  During the 25-year contract period the sites remain in State ownership, as distinct from previous housing PPP projects.  The housing units are then handed over to the State after 25 years in a predefined, good quality condition.

The relevant local authorities will retain responsibility for tenant management during the contract period.  Tenants allocated to PPP units are drawn, in the normal manner, from the local authority social housing waiting list in accordance with that local authority’s allocation scheme.  The tenants are subject to standard arrangements as apply to other social housing allocations, including in respect of the charging of differential rent.

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