Wednesday, 11 December 2019

Questions (38)

Darragh O'Brien

Question:

38. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government when final guidance on cost-effectiveness analysis cases will be issued to local authorities; and if he will make a statement on the matter. [51987/19]

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Oral answers (10 contributions) (Question to Housing)

The public spending code requires that housing projects with a cost of more than €20 million be subject to a cost-effectiveness analysis before getting approval from the Department to proceed. When will final guidance on the analysis be issued to all local authorities? It has not yet been issued and, according to information I received through a freedom of information request, it has caused great confusion and continued delays in progressing projects.

My Department provides advice to local authorities on an ongoing basis to support them in delivering social housing projects, including undertaking cost-effectiveness analyses in respect of high-value projects. Local authorities have primary responsibility for evaluating, planning and managing their public investment projects under the public spending code. Against this background, my Department recently provided final draft guidance documents to local authorities to support them in undertaking cost-effectiveness analyses. The final draft documents provided include draft sectoral guidance for social housing appraisals, as well as worked examples of preliminary appraisal and detailed appraisals.

Final observations on the draft documents have been sought from the local authorities and adjustments may be made based on that feedback, as well as to take account of the review of the public spending code, which was considered by the Government yesterday. In the meantime, however, local authorities can continue to use the draft guidance for any of their projects that require a cost-effectiveness analysis. It is intended that the documentation will be finalised soon and the final sectoral guidance will be issued in early 2020.

The Minister will be aware of the confusion and delays this issue has caused. From information I received from his Department and copies of emails accessed through a freedom of information request, we learned that approximately 1,800 homes have been delayed in Dublin, in Dorset Street and on Constitution Hill, because of the confusion with Dublin City Council - this will not apply to all local authorities - as to how it could meet the requirements of the cost-effectiveness analysis.

I understand from what the Minister stated that a final draft has been sent out for feedback to be received from the local authorities as to what they believe is required. Has he a final date on which the process will conclude? Is he aware of schemes, such as those I mentioned in Dorset Street and on Constitution Hill, that have been caught up in red tape because of the confusion over the cost-effectiveness analysis? Will he agree that in Dublin, the 1,789 units that could be moved forward to house people have been held up because the matter has not been finalised? We cannot continue with drafts going back and forth, and need to get certainty in the process.

Any confusion around the matter was cleared up earlier in the year. The draft documentation can be used to carry out the cost-effectiveness analyses. The reason we do such analyses rather than cost-benefit analyses is that we consider social housing projects. We determine them in different ways and it is a question as to whether it is a better way of delivering the project, not whether the project is good. Exceeding the €20 million cap has affected only six local authorities thus far and has happened only in the past 18 months. We have had a series of engagements with the Department of Public Expenditure and Reform and have helped the local authorities concerned navigate that Department. An example is what we did in the case of the first bundle of public private partnerships. Change is coming as a result of the Government decision yesterday and the Minister for Public Expenditure and Reform, Deputy Donohoe, will announce that soon. Given that the decision has been made by Cabinet and we are discussing it today, projects below €100 million will still require a cost-effectiveness analysis, but they will not have to go through the Department of Public Expenditure and Reform. The new code will be available in January.

That is welcome. The Minister expects there to be finalisation of the code in January next year, and the new process will be in place. I ask that in the case of any schemes in the pipeline, such as those I mentioned in Dorset Street and on Constitution Hill, which we learned about through freedom of information and which have been delayed because of the process, the Department liaise with the six local authorities the Minister stated it has engaged with to find out what else is in the pipeline and what the local authorities say has been delayed because of the confusion over the process. I take it from the decision made yesterday that within a short time, the Minister will advise the affected local authorities of the new procedure, and that anything in the pipeline could be moved through without further undue delay, following the new guidance. The number of units that could be delivered is significant, as I am sure the Minister will agree. We do not want any confusion to delay further the delivery of such homes for families.

I have examined the projects the Deputy outlined but the delay is not with us. It is up to the local authorities to do the work-----

It is the fault of the local authorities.

Local authorities are great at pointing the finger-----

The Minister is not bad either.

-----at the Custom House, but whenever I investigate individual cases, I find that the truth lies somewhere else. They have the draft guidance to work to and know how to do the work. We have helped them in every way we can and will continue to help them through the process. The change that is coming, which will be announced later, is welcome. They will still have to do the analysis - that will not change - but will not have to go through another layer of Government. Rather, they will come through my Department, which will help to expedite future projects.

I have examined the projects the Deputy mentioned. We are waiting for the work to come from the local authority and will help it when it comes.