While published as part of the Budget 2019 documents on Tuesday 9 October last the Department’s Ireland Strategic Investment Fund (ISIF) Review was concluded in 2017. It was an important input into the Government’s Decisions on the Rainy Day Fund and Home Building Finance Ireland (HBFI) as part of Budget 2018 last year; and on the reallocation of ISIF funds in July 2018 and the establishment of the Land Development Agency (LDA) taken in September 2018.
The Review proposed the reallocation of ISIF funds (i) to support the Rainy Day Fund, and (ii) to address infrastructure constraints; among a number of other recommendations. The recommendation to address infrastructure constraints set out that the investments should be off balance sheet, leverage in private sector co-investment, and be a decision for Government. The Government has identified the increase in housing supply as a key strategic objective that facilitates both off balance sheet treatment and private sector co-investment.
The final Government Decision to refocus ISIF’s investment strategy reflected this review of the ISIF and also the wider challenges facing the State and included the following decisions:-
- Recycling the existing ISIF investment commitments of €4.4 billion and the allocation of €1 billion of ISIF funds to support ISIF’s future role while continuing the double bottom line of a commercial and an economic return;
- Transferring €750 million to support the establishment of Home Building Finance Ireland as had been announced in Budget 2018;
- Transferring €1.5 billion of funds to seed the Rainy Day Fund, also as announced in Budget 2018; and
- Allocating a reserve of €1.25 billion of ISIF funds to stand ready to support the LDA in its housing and other objectives. These funds are to be transferred to the LDA as they are needed to be used for off-balance sheet activities in line with the LDA’s commercial mandate.
The Minister for Housing’s establishment of the LDA will better coordinate State lands for regeneration and development and will support a continued increase in housing supply. The Government has already identified a number of sites through which the LDA can deliver approximately 3,000 homes and there are ongoing discussions with various State bodies in relation to land that could deliver another 7,000 homes.