Joan Burton (Dublin West, Labour)
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373. To ask the Minister for Education and Skills the level of construction inflation that has been experienced by his Department in the 18 months to September 2017 in respect of construction projects; the way in which he monitors construction inflation and the mechanisms his Department employs to establish this; and if he will make a statement on the matter. [38022/17]

Richard Bruton (Dublin Bay North, Fine Gael)
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The tender price index published by the Society of Chartered Surveyors Ireland indicates recent construction inflation, averaged across the country, as follows:-

2015 - 5.47%

2016 - 6.34% 

The society also forecasts construction inflation for the first half of 2017 at 3.02%.This would indicate an inflation predication for all of 2017 at around 6%.The Department’s experience of construction inflation is broadly similar to the above indices.

The Department publishes a Basic Building Cost limit for primary and post primary schools which provides a guideline to design teams as to the level of specification and design that is appropriate for school buildings.The Basic Building Cost along with site specific Abnormal Costs, External Works costs and Fitted Furniture costs are used to calculate the predicted construction cost of a project ahead of a tender exercise.

The Department’s Basic Building Cost limit was first introduced in 1975 (€136/m²). It reached a peak of €1,230/m²in June 2006.The cost limit was reduced for the first time ever in November 2009 to €990/m²(a 19.5% reduction) and again in January 2011 to €930/m²(a further 6% reduction).The Basic Building Cost limit has undergone three increases since then – April 2014 (€1,050/m², +12.9%), June 2015 (€1,150/m², +9.5%), February 2016 (€1,210/m², +5.2%) and June 2017 (€1,280, +5.8%) and currently stands at €1,280/m². 

It should be noted that a significant proportion of the recent increases relate to improvements in building standards and not just construction inflation.

The Basic Building Cost limit is regularly adjusted to take account of construction inflation and changes in building standards. The Department continuously monitors tender returns across all major school building projects, as well as trends in labour and materials costs, and periodically adjusts it’s Basic Building Cost limit accordingly