David Cullinane (Waterford, Sinn Fein)
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207. To ask the Minister for Housing, Planning, and Local Government if he will advise on a matter raised in correspondence (details supplied); and if he will make a statement on the matter. [15661/22]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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The CSO Wholesale Price Index (WPI) shows the annual increase for building and construction materials to be 16.7% to the end of January 2022. The latest data shows that productivity in the construction sector remains below 2010 levels and is less productive than EU average. Construction costs have risen considerably over recent years through a combination of the increased cost of regulatory compliance and general increases in labour and materials costs.

Housing for All commits that the Government and relevant State agencies will advance methods to reduce residential construction costs, particularly the cost of apartment construction, by increasing the focus of existing and planned construction related initiatives on the residential construction sector, and by ensuring a coordinated, whole-of-government, approach to residential construction.

In this regard, the Government will enhance the intended role of the new Construction Technology Centre, which is under development by Enterprise Ireland, beyond the standard remit of Technology Centres in general for its first three years of operation in order to prioritise residential construction, in particular by incorporating:

-structures and funding to enable innovation in residential construction prior to the National Standards Authority of Ireland compliance processes, including demonstration, certification, standardisation and commercialisation as well as research and development;

- a proactive role in strengthening the residential construction value chain;

- promotion, development and support for innovation / modern methods of construction (MMCs) using digital and manufacturing technology;

- support for SMEs to develop scale and to adopt MMCs and Building Information Modelling techniques for residential construction; and

- support for digitisation in the manufacturing sector for residential construction e.g. digitally controlled manufacturing equipment.

This will be complemented by an increased focus for the Department of Public Expenditure and Reform-led Construction Sector Group (CSG) on the residential construction sector. This will include the introduction and full implementation of a pipeline of cost reducing innovations and productivity measures, in line with its established remit to improve productivity and efficiency, and to control price inflation.

In addition the CSG supported by my Department are also in the process of preparing a study to carry out an analysis for each component of cost of construction (including cost of compliance) of house and apartment development, with a view to reducing cost (including cost of compliance) and increasing standardisation. It will also identify opportunities for cost reduction for consideration by relevant Government departments and industry.

In accordance with Government policy, social housing construction projects (as with all publicly funded construction projects), must be procured in accordance with the Capital Works Management Framework. The Office of Government (OGP) is responsible for implementing national policy on public procurement, particularly in relation to construction procurement.

The OGP recently introduced the following interim measures to address the impact that the recent price increases in construction materials is having on public works tenders:

- Reduced fixed price period duration to 24 months (previously 30 months minimum).

- Permit mutual cost recovery within the fixed price period for material price changes in excess of 15% (previously 50%)

- Introduction of a new mechanism to address the period between tender submission and award through limited indexation of the tender price

The above measures relate to new public works contracts going forward.