Committee of Public Accounts (PAC) finds that current spending on housing supports does not represent value for money for the taxpayer

In its report published today on the Examination of the 2019 Appropriation Account for Vote 34 – Housing, Local Government and Heritage, and Related Financial Matters, the Committee makes recommendations on four issues which were discussed with the Comptroller and Auditor General and the Department of Housing, Local Government and Heritage at meetings of PAC on 25 and 26 November 2020, and 3 June 2021. These are:

• Lack of value for money from social housing supports;
• Timeline for establishing an independent Building Standards Regulator;
• Recouping compensation from HomeBond for non-Pyrite related structural defects; and
• Transparency of the Residential Tenancies Board (RTB) referral process.

The Committee noted that the combined spending on three housing supports – the Housing Assistance Payment (HAP), the Rental Accommodation Scheme (RAS) and the Social Housing Current Expenditure Programme (SHCEP) – totalled €655 million, or 27.7 per cent of the Department’s expenditure for 2019.

Deputy Brian Stanley, Cathaoirleach of PAC, said: “The Committee is of the opinion that the current level of spending on short-term housing supports such as HAP and RAS, and long-term leasing schemes through which the State does not acquire an asset at the end of the lease, does not represent value for money.

“The Committee of Public Accounts of the last Dáil raised similar concerns over the extent of expenditure on housing supports such as HAP and RAS, and recommended the Department ‘ensure that long-term value for the State is created in housing provision’. We believe insufficient progress has been made in implementing this recommendation.

“This Committee recommends that the Department works to substantially reduce the expenditure year-on-year on social housing supports such as HAP, RAS and SHCEP starting from 2022, and focuses on increasing capital expenditure on housing stock that will remain an asset of the State.”

Deputy Stanley said the Committee is also concerned at the lack of independent regulation of building standards in Ireland, and the consequences for both households and the Exchequer resulting from insufficient regulation of building standards. He noted that at the end of 2019, the Government had paid out €126 million for remediation works to houses affected by pyrite-related structural damage, with the bill estimated to reach €210 million by the end of 2023.

He also pointed out that a working group established by the Minister for Housing, Local Government and Heritage published a report on 30 September 2021 which estimates the cost of the Defective Concrete Blocks Grant scheme – commonly referred to as the ‘Mica redress scheme’ – at €1.4 billion, potentially rising to €3.2 billion.

Deputy Stanley said: “The Committee recommends that the examination of the creation of an independent Building Standards Regulator, and the re-establishment of the Building Regulatory Advisory Body, which were committed to in the 2020 Programme for Government, is completed by the end of quarter one 2022.

“In light of the impact the Pyrite Remediation Scheme and the Defective Concrete Blocks Grant scheme will have on the Exchequer, the Committee recommends that, in order to safeguard public funds, a more robust regulation regime is put in place with regard to building standards nationwide.”

On the issue of recouping compensation from HomeBond for non-Pyrite related structural defects, the Committee recommends that the Department furnish it with a timeline by the end of quarter one 2022 as to when it expects to receive the full liability due from HomeBond.

The Committee also raised concerns about the process for making a referral to the Residential Tenancies Board (RTB) in relation to non-registered properties. Members are not satisfied with the lack of transparency regarding the referral process.

Deputy Stanley said: “In order to achieve more satisfactory outcomes for the Exchequer and tenants, the Committee recommends that the Department engages with the RTB to increase transparency in the process of referring an unregistered property to the RTB. Specifically, the Committee recommends that RTB takes a number of specific actions to address the matter, including creating a reference number for each property reported to the RTB as unregistered, establish a target timeframe for resolving each reported case, and publish a register of tenancies for Student Specific Accommodation as a matter of priority.”

The PAC is a standing committee of Dáil Éireann which focuses on ensuring public services are run efficiently and achieve value for money.

The PAC Report Examination of the 2019 Appropriation Account for Vote 34 – Housing, Local Government and Heritage, and Related Financial Matters is available on the Oireachtas website.