Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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127. To ask the Minister for Housing, Planning, and Local Government the status of the establishment of an approved housing body SPV for the purposes of drawing down funding from bodies such as credit unions for the purposes of the delivery of social housing. [22821/20]

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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128. To ask the Minister for Housing, Planning, and Local Government if he will discuss with the Minister for Finance and the Central Bank the matter of allowing credit unions to invest in the delivery of affordable housing. [22822/20]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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I propose to take Questions Nos. 127 and 128 together.

Following engagement with the Credit Union sector on proposals for credit unions to provide funding for the provision of social housing, the Central Bank undertook a review of the relevant investment framework in 2017.

On foot of this review, revised Regulations commenced on 1 March 2018. The revised Regulations included the addition of investments in Tier 3 Approved Housing Bodies, as a permitted investment class for credit unions. Accordingly, since 1 March 2018, credit unions are permitted to provide funding, through a regulated investment vehicle, to Tier 3 AHBs for the provision of social housing.

In parallel, my Department referred the Credit Union representative bodies to the Irish Council for Social Housing (ICSH) with a view to both sectors sharing, as far as practical, the benefits of their respective work in this area, including the work undertaken by the ICSH on the development of special purpose vehicles for social housing financing purposes. The work of the ICSH was supported by grant funding from my Department.

The ICSH, along with six Tier 3 AHBs, have worked with specialist financial advisors to establish a funding mechanism or vehicle which would identify suitable sources of non-state finance to fund the delivery of social housing by AHBs, based on best value for money. Market testing undertaken revealed good interest in lending to the AHB sector from various lenders including banks, institutional investors and the Credit Union sector. So far, one AHB has set up an SPV and several AHBs have sourced finance from private institutions. As such, the work in this area is ongoing and has led to individual AHBs establishing SPVs for financing social housing.

Separately, I was pleased to welcome a recent announcement by Initiative Ireland and CUDA, the Credit Union Development Agency, of their plan to launch a new social and affordable housing fund supported by the Credit Unions of Ireland. The new fund will enable Credit Unions to avail of the regulatory changes which enable them to lend to AHBs through a regulated fund. Indeed I met with Initiative Ireland and CUDA about this particular initiative on the occasion of the announcement.

The Credit Union sector is one potential funder whose terms are assessed as part of the process of market testing to establish best value for money and optimum terms and conditions from lenders. While my Department will continue to be available to provide any clarifications that may be required in relation to the delivery of social and affordable housing, it falls to the relevant parties, i.e. the AHBs, on the one hand, and potential investors on the other, as in the cases outlined above, to agree a workable and mutually acceptable approach in order to bring potential investment possibilities to a successful conclusion.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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129. To ask the Minister for Housing, Planning, and Local Government the status of his plans to secure the reclassification of approved housing bodies as off-balance sheet. [22823/20]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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In April 2018 the Department of Finance published the Stability Programme Update for 2018 which was the first set of fiscal projections produced by that Department to incorporate the CSO decision to reclassify the majority of Tier 3 Approved Housing Bodies (AHBs) as part of the local government sector. This was an important first step in the Government's assessment as to the impact of the Eurostat decision. The Department of Finance undertook an analysis of the implications for General Government Expenditure and General Government Debt and concluded that there are no direct Exchequer implications and the projections do not present any particular issue in the context of the fiscal rules.

In addition, my Department engaged with AHB sector representative bodies (namely, the Irish Council for Social Housing and the Housing Alliance) to examine proposals, including proposals which were presented by those bodies, as a possible means to achieve reclassification. The proposals are complex as they cut across a wide range of social housing policy issues and require extensive analysis.

An important part of this exercise is to examine the feasibility of measures which can be taken to develop the AHB sector in such as way so that it could be reclassified as being 'off-balance sheet', without undermining the foundations of social housing policy. In this context, it must be accepted that this will more likely be a more longer term objective.

Constructive discussions took place with AHB representative bodies on a number of occasions and these informed a pathway for dealing with the issues involved. It was agreed that a working group would be established to consider these issues further.

The first meeting of the AHB Classification Working Group took place on 24 June 2020. The group comprises representatives from:

- My Department;

- Department of Finance;

- The Housing Agency;

- The Housing Finance Agency;

- Irish Council for Social Housing (ICSH); and

- The Housing Alliance

The group is tasked with examining and making recommendations in relation to the following:

- Clarify the impact of the CSO’s classification decision on General Government Debt and General Government Expenditure;

- Assess the impact of the classification decision on the AHB sector (administrative, reporting, Tiers of AHBs, etc.) and assess the impact on delivery of housing under the Rebuilding Ireland Action Plan; and

- Examine the detailed sectoral proposals to achieve reclassification in the context of social housing policy more generally.

The group is committed to working constructively to address this complex issue, in line with the commitment set out in theProgramme for Government Our Shared Future.

Notwithstanding the decision by Eurostat, the Government continues to see a central role for the voluntary housing sector in contributing to the delivery of social housing. It is committed to using all mechanisms and schemes, including through the AHB sector, to ensure that momentum is maintained towards meeting the ambitious 50,000 social housing target. This statistical classification will not affect these ambitious plans.