Vol. 910 No. 1
29. Deputy Barry Cowen asked the Minister for the Environment, Community and Local Government his views on the additional regulatory costs of construction that have been imposed since the introduction of the new Building Control (Amendment) Regulations 2014; how he will reduce the regulatory costs of building new single-unit and multi-unit housing; and if he will make a statement on the matter. [11809/16]
I thank the Ceann Comhairle-----
No, we are operating back under the old Standing Orders.
We are back to the old regime. The Deputy was right; it is the old politics.
The Minister must respond and then the Deputy can put a supplementary question.
The Building Control (Amendment) Regulations were introduced in 2014 in response to serious concerns for public safety which arose from the prevalence of failed or seriously defective homes following the economic crisis and the collapse of the building sector. The regulations require that compliance with building regulations must be verified through the execution of an inspection plan that enables the builder and the assigned certifier to sign a statutory certificate of compliance on completion.
It has been asserted that the obligations of the regulations impose a substantial additional cost on builders and developers. However, costings prepared by my Department in 2015 as part of its review of the first 12 months of operation of the regulations demonstrate that the new assigned certifier role can be achieved for approximately €3,800 per dwelling. Economies of scale mean the cost per unit will be considerably lower for multi-unit developments. Where additional design work is required, the combined cost for design and assigned certifier duties for a single dwelling is approximately €6,000. A number of respondents at public consultation have confirmed that assigned certifier services can be secured in line with the Department’s costings. Owners of one-off houses were given the facility to opt out of statutory certification from 1 September 2015 under the Building Control (Amendment) (No. 2) Regulations 2015.
A number of important measures aimed at improving housing viability were already introduced by the previous Government.
These include the modification of obligations under Part V of the Planning and Development Acts to balance viability and social delivery, and the retrospective application of reduced development contributions to older planning permissions. In addition, revised planning guidelines on apartment standards, now placed on a statutory footing under the Planning and Development Acts, have the potential to significantly reduce the cost of building high-quality apartments.
In the context of preparing a new action plan for housing, my Department continues to liaise closely with other Departments and agencies and with industry stakeholders with a view to identifying any reasonable and appropriate measures that may be taken in the interests of reducing construction overheads to facilitate an increased level of housing output.
I thank the Minister for his response. I note that it contains information he has received from his departmental officials that would seem to indicate that the costs are not excessive and do not in any way affect the potential for the construction sector to do more. Unfortunately, I do not agree with the Minister's response. We do agree, of course, that there have to be regulatory guidelines and a proper certification regime in line with building regulations and planning controls. What we have seen in the past has to be improved upon.
However, it is wrong to say that a cost of €4,000 to €6,000 per unit is not excessive when the comparable cost in the UK is about €700 per unit. There has to be a better system. We do not have to have a situation whereby surveyors or the RIAI are the regulatory bodies in this regard. I do not believe that should be the case. I ask the Minister to consider a certification and licensing regime that could be managed by local authorities. In that way, people could obtain the relevant qualifications and expertise, thus having a licensing and certification system in place to do a job as effectively, if not more effectively than would otherwise be the case. Ultimately, we could resource local authorities so that they would be the sole certifiers. That was their expected role in bygone days, but the manpower, resources and facilities were not available to enforcement officers in local authorities. I ask the Minister, therefore, to seriously consider that prospect in order to address this excessive cost.
To add weight to what I outlined earlier, according to figures published last week by the Society of Chartered Surveyors Ireland on the cost of building a house, professional fees represent 2% of the cost, which is about €5,000. Part of that cost was the assigned certifier. There had been accusations that an additional cost of €10,000 or €20,000 was attached to this requirement, but I do not think that is the case. However, I will examine what the Deputy has said.
I hope we are about to see a dramatic increase in the number of houses being built in Ireland. We need to get back up to building between 30,000 and 35,000 housing units a year for a sustained period. If we are to build that number of houses we must ensure guarantees around quality and certification. One of the reasons we had poor standards was that the previous systems linked to local authorities did not work. I will look at what the Deputy is saying, and if it is possible to do something to reduce costs, I have an open mind on that.
The system now in place does seem to work. I do not get a lot of kickback from developers about it in terms of excessive costs. Certification is an important part of ensuring quality, particularly when we hope to build significantly more houses than in recent years.
I acknowledge the Minister's commitment to examine the potential that may exist for a different certification and licensing system. I will forward that proposal to him. In that context, I ask him to consider a pilot scheme in certain local authority areas, which might bear fruit for other authorities thereafter.
30. Deputy Eoin Ó Broin asked the Minister for the Environment, Community and Local Government the cost of the modular units in Poppintree in Ballymun, Dublin 9; and if the modular units represent value for money or if the money would be better spent purchasing homes on the open market. [11832/16]
In October 2015, the Government approved a programme to deliver 500 units of rapid-delivery housing across the Dublin region for homeless families currently residing in commercial hotels. In November 2015, Dublin City Council entered into a contract for the delivery of the 22 units in Ballymun at a cost of €4.2 million excluding VAT. This is the original tender cost and remains the approved cost, equating to approximately €191,000, excluding VAT per unit. I understand that final accounts between the council and the provider are pending. The 22 units have been completed and are being occupied. The average cost of these units must be considered in the context of their early delivery and the quality involved. It is highly unlikely that purchasing properties on the open market could have delivered sufficient quantities of such high quality units in suitable locations in such a short period, given the timescales inherent in surveying and conveyance requirements which would attach to each individual property. It must also be borne in mind, in terms of making cost comparisons, that many units purchased on the open market, particularly second-hand units, would require further expenditure in respect of renovations that may be required to bring them up to standard.
Notwithstanding this, the acquisition of units on the open market remains an important part of the overall social housing programme. More than 1,000 units were acquired for social housing across all local authorities in 2015 and a similar number is planned for this year.
With regard to the cost of the rapid-build units in Ballymun, I expect that if we can increase the number delivered significantly, we should achieve economies of scale and get the cost down. We will have to wait to see what the final cost will be to Dublin City Council from the provider but the Department signed off on a cost of €4.2 million, or approximately €191,000 per unit. This was a pilot project and it was the first time we took a rapid housing delivery approach. We have learned some lessons. It has taken longer than expected and the units may be slightly more expensive than expected. Learning lessons from that, I hope we will be able to deliver units quickly with rapid-build technology in the future and build on the experience of the first project, which was a pilot project that is still housing 22 families.
The context of the question is the Minister's remark that he is considering increasing the proposed number of rapid-delivery units from 500 to 1,000 in the coming year. One of the concerns many of us had when the rapid builds were first announced related to cost. My party is not against them on principle. If they get families out of inadequate and cramped emergency and hotel accommodation for short-term stays before they move on to long-term housing, they could have a role to play in tackling the emergency. The difficulty, however, is on the basis of the full cost the Minister has outlined, the unit cost will be approximately of €210,000. As RTE revealed in a "Prime Time" special, there is a potential additional cost of €500,000. Correspondence was exchanged between Dublin City Council and the Department, albeit before the Minister took office, regarding additional costs for the 22 units in Poppintree. The city council will not comment on this but our concern is whether this is an additional cost that may also have to be factored into rapid builds elsewhere.
We are also concerned that given that many families remain in emergency accommodation, for example, in Dublin city for more than 18 months or in my own constituency in the South Dublin City Council area for more than 12 months, they may not be short stays. Can the Minister give us an assurance if he proposes an increase in the number of rapid builds, that there will be a significant reduction in the cost of the first tranche and that he will also do everything in his power to ensure people are accommodated on the basis of an emergency stay only and the units do not become long-term housing by another means?
Sometimes there is a misunderstanding regarding the difference between rapid-build technologies and engineering solutions and modular housing units as if we are somehow building the trailers parks of the future. That is not what we are doing. Anybody who has visited the Ballymun project has seen houses that look like many other houses that have been built through normal construction methods. A strategic decision was taken at some point to construct rapid-build units instead of using modular housing units which would perhaps be more temporary.
Timber-frame house building was frowned upon and questioned 15 years ago, but has subsequently become the norm for many people. My understanding is that the houses in Ballymun have a life expectancy of 60 years, so this should not simply be temporary accommodation. We are talking about building proper homes for people that manage energy appropriately and are high-quality builds that can be built far more quickly than buildings delivered through conventional methods.
I am emphasising the point that I would like to see chief executives using rapid-build technologies if this can solve problems within their communities, along with other strategies around acquisition and so on, because of the figures we saw yesterday, which are yet another reminder of the urgency with which we need to deal with this issue by getting more supply into the marketplace from a social housing perspective.
Again, I agree with the Minister. Part of the difficulty in respect of the public debate around this is the fact that the original proposal was for prefabs, and some of the models that were presented to city and county councillors were prefabs and not the timber-frame rapid-build houses that we have seen.
We want to see the maximum number of units both for long-term housing and good-quality emergency accommodation. Therefore, where local authorities are to act under instruction from the Minister, we need to ensure the units are good quality and represent best value for money for the taxpayer. We need to ensure that emergency units are for emergency stays and that permanent housing is permanent housing. Perhaps some more transparency in the costings and plans for the Poppintree development would have helped the public debate. I will welcome the Minister's announcements on these at a later stage.
31. Deputy Alan Kelly asked the Minister for the Environment, Community and Local Government if he will deliver the target of 17,000 social housing units in 2016, as set out in the social housing output report published in January 2016, the categories under which he will deliver them, and the quantity to be delivered. [11883/16]
Housing is a key priority for this Government and, as outlined in the programme for a partnership Government, I will prepare an action plan for housing within the Government's first 100 days, working with other Government colleagues. We hope to do this by the end of July or the middle of August. The action plan will build on the considerable work already carried out or under way, and will draw on the important work of the special Oireachtas Committee on Housing and Homelessness. It will include actions to expedite and boost the supply of all types of housing, including social housing, in the immediate, medium and longer terms. While it is important to boost housing supply for all, the action plan will focus in particular on those experiencing the most difficulty in accessing the housing and rental market at the moment.
The targets in respect of social housing delivery have been set for each local authority out to 2017. The target for 2016 is 17,000 units, and I am committed to meeting that target and my ambition is to exceed it if possible. I have asked all local authority chief executives for their ideas and proposals to expedite delivery of social housing this year. In respect of capital programmes, 1,500 units are targeted for delivery through construction and acquisition by local authorities and approved housing bodies, AHBs. Local authorities will also return a further 1,500 voids to productive use. Under the social housing current expenditure programme, 3,000 units are to be delivered through the acquisition, leasing or construction of houses and apartments by local authorities and AHBs. In addition, 1,000 units will be delivered under the rental accommodation scheme, with 10,000 households being assisted under the housing assistance payment scheme.
Given that Deputy Alan Kelly put down the question, I wish to state for the record that the former Minister did a lot to respond to a very difficult housing need in the past two years and has put foundations in place upon which I can build. It would be appropriate to recognise that today.
I thank the Minister for his reply and wish him and the Minister of State well in their challenging roles.
Does the Minister expect he will be able to deliver the target of 17,000 social housing units for 2016? I think he said he hoped to deliver more. Will an ongoing monitoring process be put in place over the rest of the year to ensure local authorities deliver in accordance with the number of units to which they are committed?
The Minister has said in public comment that he is looking at ways of speeding up the delivery of social housing. Will he give us some information on his thoughts on that? In what way will he be able to speed up the delivery?
First of all, we will monitor. There is a commitment in the programme for Government to do that in a very transparent way by reporting on progress on a quarterly basis. There will be individual plans and targets set for each local authority in the country. Obviously the most pressure will be on the four Dublin local authorities, the two in Cork and those in Limerick, Galway and Waterford, but other urban centres as well. There is a housing emergency in these cities, particularly in Dublin, and it needs an appropriate response. In terms of the kind of fast-tracking mechanisms that I am talking about, we are looking at changing the Part VIII regulation to allow for Part VIII decisions to be made earlier while keeping elected representative involvement in decision making but perhaps shortening the public consultation period to allow decisions to be made. We are also looking at the tendering process, the procurement process, the contract negotiations and final sign-off between my Department and local authorities who have to work together before a project can pass through four stages before the final sign-off. We are looking at shortening that period considerably while still making sure the appropriate checks are in place.
I understand that 420 extra staff have been recruited to local authorities to ensure that house delivery is speeded up. Is the Minister getting reports back on how those 420 people are improving the situation? We hear of local authority houses being left vacant for much longer periods of time in some local authorities than others and some local authorities being much more proactive in the delivery of social housing units. Is that being monitored?
What I have said to chief executives is that if they have a human resource or people power issue that is preventing them from getting on with meeting the targets that we need to set for the new ambition, I need to know about it, and we will speak to the Department of Public Expenditure and Reform to see if we can get them the people they need. Certainly, from my Department's perspective, we may well need to take on more people in specialist areas so that we can send down teams of engineers, quantity surveyors, designers and architects to sign off on drawings and costings, as opposed to having letters going back and forth, which may take months. The Deputy will have experience of this from the Department of Education and Skills, where drawings come back from school projects, amendments are made, the drawings are sent back, there are further amendments, and it goes on and on. If there is a crisis or a safety issue and the school needs to be built quickly, a Minister for Education and Skills can fast-track things and make them happen more quickly by sending a design team down to sign off on things to move the process on. That is the kind of practical intervention that I want my Department officials to be involved in with local authorities so we can move through the approval stages in a more timely manner than we have been doing so far.
32. Deputy Barry Cowen asked the Minister for the Environment, Community and Local Government his plans to speed up the construction and acquisition of new housing units to meet the delivery of social housing targets under the social housing strategy; and his views on the relatively low level of approvals for new social housing projects that his Department has made since January 2015. [11810/16]
In line with the commitments of the programme for Government, I will be publishing an action plan for housing within the Government’s first 100 days. As Minister, I will be vigorously pursuing the earliest possible advancement of the construction and acquisition of new housing units to meet the targets under the Social Housing Strategy 2020.
On the acquisition of social housing, local authorities have delegated sanction to acquire houses and apartments up to a value of €600,000 in one transaction. In 2015, more than 1,000 new social housing units were purchased by local authorities, and that focus will continue in 2016. Authorities have been urged to be ambitious in this regard and funding is available in 2016 to support such ambition. The increased funding overall for housing from 2015 to 2016 is about €143 million, which is due to the previous Minister's prioritisation of this area within Government.
It is certainly not the case that there has been a relatively low level of approvals for new social housing projects by my Department since January 2015. To date, almost €680 million has been allocated for more than 3,900 social housing new builds, turnkey developments and acquisitions. This has kick-started social housing construction to a level that has not been seen for many years, but I accept that it is still not at the level it needs to be.
In my first week as Minister, I met with the chief executives of the local authorities and discussed with them their ideas and proposals to expedite delivery of social housing. This dialogue will be developed further as we progress towards finalising the new action plan for housing. As part of that action plan, I will be publishing the response from each of the local authorities, particularly the ones where there is real housing pressure. We will be publishing their emergency response plans for the first six months of that housing strategy so that everybody can see the level of ambition within each local authority. We will be doing everything we can to make sure that ambition is supported within the Department.
I know it is difficult for the Minister to bring forward meaningful plans and strategies and efforts to address this crisis. The first thing he could do is to declare an emergency, because that is what it is and has been. That is what this Government needs to recognise in the first instance. An all-party committee has been meeting for the last number of weeks and has another few weeks to go. It will be making recommendations to the Minister within his first 100 days in office with a view to formulating much of what will come from that. The Minister talked about the 2020 strategy, which the former Minister, Deputy Alan Kelly, launched over two years ago, and about the great foundations he laid and the great progress that was made. No progress was made - it was one of the greatest failures and disasters of the last Government. Progress on the provision of housing and addressing the homelessness situation has been a non-event. It has been an absolute and total disaster. Has there been any analysis of the failures and the reasons it has been such an abject failure? That should be the Minister's first port of call before he moves on to the next stage. The Department had eight stages of approval from the day the site was selected until a shovel arrived on the site and construction began. That took two years. The Department told me in recent weeks that it has cut that down to four stages, as the Minister mentioned, but that happened early in 2015 and we still have not seen the sort of progress we would expect. Even four stages are not sufficient.
If the Deputy is quicker, we will get him back in for another supplementary question.
I do not want to pretend that we have been building as many social housing units as we should have been for the last couple of years. We would like to have done more. We would have done more if we had more money available, but if one looks at the capital expenditure commitments between now and 2020-2021, there is €3 billion for social housing. It is a very serious commitment. My job is to look at the processes that are currently delaying the building of houses with the appropriate urgency to respond to what I have described as an emergency. In my first week in the job I made it very clear that I regard the current challenges in housing as a national emergency, particularly in Dublin and Cork, and they are also seriously affecting other cities. I can assure the Deputy that I am aware of the challenges that I have a responsibility to try to overcome. The Deputy will see exactly what we are proposing in a couple of months' time when we have a national plan for housing.
I will be brief. The response has to be as great as it was in the 1930s and have the same effect. The Minister talks about there being no funding, but funding was never an issue for this purpose. The national Housing Finance Agency can borrow at very reduced rates. The credit unions-----
Only in the last couple of years.
The credit unions are champing at the bit to have a role in a model similar to the one in Canada, for example, whereby funding can go into a central pot to be taken out by local authorities and housing associations. Housing associations should be allowed to access private finance. There is an issue with the Government partaking in a funding mechanism for the private sector at exorbitant rates along with an American fund.
That must cease because it has failed. It does not bear any reality to the situation on the ground because it must be competitive. Funding cannot be got in the private sector either, and the Minister must play his role in ensuring that begins to feed out into the private sector to get construction going and to address the costs we discussed earlier. As I said, I am prepared to wait until his programme is in place, having consulted the all-party committee that is doing great work as we speak in meeting the sectors, stakeholders and those at the coalface in regard to homelessness in particular. We also have the mortgage issue, which is becoming-----
Thank you, Deputy. Your time has expired.
-----pivotal too and on which a radical overhaul needs to take place.
Can I come back on that?
Very briefly, for a matter of seconds.
For the information of the House, it is my understanding that I am meeting the committee next week and I look forward to exploring some concepts with the members and also hearing their ideas.
On the finance issue, it is true that there is a lot of available finance now. The Housing Finance Agency, for example, can borrow money at low interest rates now but that was not the case until relatively recently, so to talk about the housing crisis as it was or was not responded to in the past five years, assuming things were as they are now four or five years ago, is political amnesia. That is not the way it was at the time. We had a broken construction industry that was not capable of building houses and was incapable of getting finance to do it, even if it could do it. That is now changed and it is my job to ramp up capacity as quickly as possible and to fund it as intelligently as possible in order that we can get margin back into building and get housing output up again.
33. Deputy Eoin Ó Broin asked the Minister for the Environment, Community and Local Government the net cost of the abolition of Irish Water and water charges. [11833/16]
The Government is committed to retaining Irish Water as a single national utility in public ownership responsible for the delivery of water and wastewater services. To build public confidence in Irish Water, I will be establishing an expert advisory body which will advise on measures to improve the transparency and accountability of Irish Water and to give the Oireachtas quarterly reports on its performance in relation to its business plan.
Some broad estimates were prepared in the context of recent Government formation discussions on the potential costs of abolishing Irish Water. It was estimated that one-off costs for staff redundancies, termination of contracts, transitioning to another model and so on could range between €85 million and €169 million. In addition, some €1.6 billion additional running and capital costs would arise over the period of the current Irish Water business plan to 2021 due to the fact that the efficiencies agreed in the context of that plan would be unlikely to be achieved in a return to a local authority model. From memory, the efficiencies planned for in the business plan over that period were €1.1 billion. Irish Water has already cut about 7% off its cost base in the past two years.
Abolishing domestic water charges would lead to an expected additional subvention requirement of up to €1.4 billion over the period 2016 to 2021, subject to assumptions on payment levels and without reflecting any costs of dismantling contracts. In other words, if domestic water charges were fully paid by everybody, that is the income that would have come to Irish Water. We also need to factor in the abolition of the water conservation grant which, over that time period also, could deliver savings of €660 million. That is costing the State about €110 million each year.
The Government has committed to establishing an expert commission to make recommendations for the sustainable long-term funding model for the delivery of domestic water and wastewater services by Irish Water. The commission will report to a special Oireachtas committee and consideration of recommendations on the funding model will ultimately be voted upon by the Oireachtas next year. In the meantime, I will introduce legislation shortly to suspend domestic water charges for a period of nine months, or three billing cycles, from the end of the current billing cycle at the end of June.
I thank the Minister. As he knows, in May, Irish Water produced a report, although it did not publish it but selectively leaked aspects of it to a number of newspapers, which estimated that the cost of the abolition of Irish Water would be in the region of €7 billion. I am interested to know if the Minister has seen its report or its figures, which are hugely different from the several billion euro the Minister has outlined here. As the new Minister, does he believe it is appropriate for Irish Water to leak information selectively which, clearly from his Department's figures and those of the Department of Finance, are at great variance? Is that something he believes he, as the new Minister, should discuss with Irish Water to ensure this type of behaviour from it is not repeated?
Irish Water has a responsibility to put information into the public domain if it feels it is relevant. I suspect that is what it was trying to do. I have not read the report the Deputy is referring to but there is a massive opportunity cost in terms of essentially going backwards in terms of the way we deliver water. I will have an opportunity when debating these issues later to outline the reason I believe a single utility is so important for Ireland. The previous approach of having 34 local authorities delivering water services was a disaster in terms of underinvestment and, most important, public health. The real concern of those in Irish Water who understand water systems, in the context of that model and charging being abolished, is the very significant cost to the State, and I believe that is what it was trying to explain.
The Minister's interpretation of Irish Water selectively leaking sections of a document none of us read is more than generous. If it wanted to have informed public debate, it could have published the report and let people form their own view.
The problem for local authorities, until the creation of Irish Water, was not that local authorities were doing a bad job but that central government was not investing, as Deputy Cowen has outlined, in social housing or, if we were discussing health, health services. Central government's refusal to invest in vital public services, particularly those delivered by local authorities, is at the heart of many of those difficulties.
I ask the Minister again if he believes it is appropriate for Irish Water to leak pieces of information selectively to some publications in the media rather than what it should have done in respect of that report, which is give it to the Minister involved, the Members of this House and the public to allow a reasoned and informed debate. In his dealings with Irish Water, will the Minister communicate to it that it is not a good way to proceed if it wants to inform the public debate, as the Minister so suggests?
The Deputy seems to know more than I do about selective leaking in regard to this particular issue. I do not believe we should be selectively leaking anything. The debate we had last week, as a result of selective leaks, also skewed a debate inappropriately. I would be a fan of more transparency and, when reports are put together, of publishing reports in full in order that people can get the context around issues as important as delivering safe public water supplies. We will have an opportunity to go into these issues in some detail in the debate tonight.
Something I hope this House will be able to do over the next nine months, because we will be debating water on many occasions between now and when this House votes on a way forward in terms of funding models, is to try to understand each other's perspectives and rely on informed opinion as reports are produced, particularly from the expert commission we are setting up which, when the Deputy sees its make-up, will see that it will be balanced and made up of credible people.
For the information of the House, each priority question and other question is limited to six minutes - two minutes for the Minister to respond to the question, a one-minute supplementary question, a one-minute supplementary answer, and then concluding remarks from the questioner and from the Minister. If the Members go over time, I am limited as to how much time I can give to other persons who have priority questions and other Members who have questions on the Order Paper. We are now about seven minutes over time on the five questions given priority today, so I ask Members to bear that in mind when approaching questions in the future.
