I propose to take Questions Nos. 640 and 641 together.
As part of the Rebuilding Ireland Action Plan for Housing and Homelessness, and the Social Housing Strategy 2020, a Social Housing Investment Proposals Clearing House Group (Clearing House Group) has been in place to engage with a number of developers, potential investors, financiers, and others who had expressed an interest in being involved in the provision or financing of social housing.
The social housing model referred to in the Question was one of 24 received by the Clearing House Group, of which 6 were considered as potentially meeting the criteria.
A critical requirement in the consideration of proposals put forward to this Group was that any new funding model would be off-balance sheet or neutral in respect of the General Government Balance. Advice was sought from the Central Statistics Office (CSO) on the possibility of these proposals providing an off-balance sheet source of funding. Despite a high level of engagement with potential providers, ultimately none of the proposals met the criteria that would enable them to be considered off-balance sheet.
Among the factors that were identified to be required in order for a social housing proposal to remain off-balance sheet were that the private or institutional investor should finance 100% of the cost of purchasing or constructing residential units, including site cost, building or acquisition cost, professional fees, planning and design costs, legal and conveyance fees, and arrangement fees. In addition, the private or institutional investor must retain ownership of the property both during and after the term of the lease. As a result of the potential risk that this development would be counted as on-balance sheet, it was not possible for my Department or local authorities to further engage in this proposed model.
Taking into consideration the work and analysis of the Clearing House Group, it was felt that using and adapting the existing social housing funding and support mechanisms would instead provide a framework with more realistic prospects of harnessing private investment in an off balance sheet manner.
An alternative leasing structure has been developed that meets this off-balance sheet requirement. It will provide a new standardised leasing agreement and a centralised arrangement for engaging with potential investors and housing providers. These have been tested in order to ensure that there is no negative impact arising from how they are viewed and treated in respect of the State's General Government Balance. This new structure is due to be officially launched tomorrow by my colleague, Minister of State Damien English, and further details will be available in due course within the Call for Proposals process.