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Rental Accommodation Scheme Administration

Dáil Éireann Debate, Wednesday - 30 April 2014

Wednesday, 30 April 2014

Questions (503, 504)

Richard Boyd Barrett

Question:

503. Deputy Richard Boyd Barrett asked the Minister for the Environment, Community and Local Government if his Department has carried out a cost benefit analysis of the rental accommodation scheme and the long-term leasing programme; and if he will make a statement on the matter. [16752/14]

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Richard Boyd Barrett

Question:

504. Deputy Richard Boyd Barrett asked the Minister for the Environment, Community and Local Government the cost to the Exchequer of the rental accommodation scheme and long-term leasing in the area of social housing; if social housing should be financed through greater capital expenditure rather than the existing approach of large scale current expenditure which yields no long term benefit to the Exchequer; and if he will make a statement on the matter. [16153/14]

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Written answers

I propose to take Questions Nos. 503 and 504 together.

My priority is to maximise delivery of social housing to cater for the greatest level of need while also achieving value for money . It is simply not possible to purchase or build anything like the same number of units as can be provided for through the Rental Accommodation Scheme (RAS) and the Social Housing Leasing Initiative (SHLI). The financial parameters within which we continue to operate will not facilitate a return to large-scale capital funded construction programmes. RAS and the SHLI offered, and continue to offer, an effective and efficient response, taking account not just of the availability of resources but also current market conditions and the need for a broader range of more flexible delivery mechanisms than the traditional methods of social housing provision.

A number of economic studies carried out over the past few years support the economic rationale for the prov ision of social housing through mechanisms such as the leasing and renting of privately owned accommodation. For example, the financial appraisal of the long-term costs of leasing in comparison with other social housing delivery options ,commissioned by my Department and carried out by the Housing Agency, concluded that in general leasing is more cost effective than capital provision. A copy of this report entitled Comparative Financial Appraisal of the Projected Long-Term Costs of Soc ial Housing Delivery Mechanisms is available on the Housing Agency's website at www.housing.ie.

While the State will not necessarily gain an asset through the RAS and SHLI schemes, though options to purchase are a feature of the latter, there are a number of factors which ensure that leasing is good value in the long term for the State. It must also be recognised that while under the traditional supply mechanisms of construction and acquisition, the State gains an asset, the economic value of this asset to the State is limited in terms of monetary value . The Rental Accommodation Scheme (RAS) commenced in 2005 and to the end of February 2014 some 48,503 households have been transferred from Rent Supplement to RAS and other social housing options. Of these 28,712 of these households are accommodated directly in RAS accommodation. In addition, 4,858 housing units have been secured for social housing purposes under the social housing leasing initiative.

Up to end of March 2014, some €668.5m has been expended on RAS. From the commencement of leasing in 2009 up to the end of March 2014 some €74.3m has been expended A further €13.8m in capital advances has been made to approved housing bodies under the capital advance leasing facility.

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