Dáil Éireann Debate, Wednesday - 20 February 2019
25. Deputy Brian Stanley asked the Minister for Housing, Planning and Local Government the terms of the payment and availability scheme for approved housing bodies; and the amount paid out to housing bodies under the scheme. [8289/19]
Amharc ar fhreagraThe payment and availability scheme for approved housing bodies is one of the schemes introduced by the Government to try to increase housing supply. Little is known about it, but it has been in operation for some time. It would be useful for the House to examine the scheme, how it is working and its terms.
Approved housing bodies, AHBs, are making an important contribution to the supply of new social housing homes under Rebuilding Ireland. Since 2009, homes built, purchased or leased by AHBs are made available for social housing support under a payment and availability agreement with the local authority. For each property or group of properties, the payment and availability agreement sets out the details of the properties, details in respect of nomination rights of the local authority, the payment that will be made to the AHB, how that payment will be periodically reviewed, how the tenant’s rent will be charged in accordance with the relevant differential rent scheme, and the conditions in regard to the maintenance of the properties and the provision of services to tenants. The agreement also sets out that payments may be withheld if the terms are not complied with by the AHB or, if necessary, the agreement can be terminated.
Payment and availability agreements are generally between ten and 30 years in length. The level of payment made by the local authority to the AHB varies depending on the type and source of the property, ranging from 80% to 95% of market rent. The level of 95% is paid in the case of apartments, with the level for other properties usually being 92% or less. At the end of 2018, a total of 6,034 social housing homes were secured from AHBs by local authorities using payment and availability agreements. In 2018, €63.7 million was provided by my Department to local authorities to meet the terms of these agreements with AHBs. They will deliver approximately one third of the targets for the remaining years of Rebuilding Ireland.
The Minister of State provided some detail on how the subvention to approved housing bodies from local authorities is working. Is it a contra item? In other words, is the local authority reimbursed by the Department for that figure? It accounts for a substantial chunk of local authority budgets. The Minister of State clarified that between 80% and 95% of market rent is paid to the approved housing body. In addition, the approved housing body receives the differential rent, or what the rent would be for a similar local authority house in the same county, which may account for another €140 a week. It is a very attractive and beneficial scheme for approved housing bodies. I ask the Minister of State to clarify whether it is a contra item.
He mentioned that 6,034 homes were delivered under the scheme. Over what period did that take place? The scheme is very beneficial. The approved housing bodies are doing very well from it and have a very good budget for repairs, maintenance and management of their stock. Why can the same deal not be offered to local authorities?
I sense that the Deputy is a little unhappy with approved housing bodies, but the Government is very happy with their performance. They are doing very well and delivering many houses. The scheme is designed to achieve good value for the Exchequer and we have been doing so for many years. The average cost of a house through payment and availability agreements is approximately €878. Deputy Stanley may wish to ask Deputy Ó Broin, who is sitting alongside him, whether he supports approved housing bodies. The Government supports them and they deliver good value for the taxpayer through various accommodation schemes such as the capital advance leasing facility to assist with construction or acquisition, the mortgage to rent scheme, private leases, the recent national asset residential property services, NARPS, process, and the repair and leaseback scheme. There are various schemes available. The average cost of a property under a payment and availability agreement is €878. It offers quite good value and makes good use of our housing budget through the combination of approved housing bodies and local authorities. I sense that the Deputy may not agree with that. Local authorities - certainly all local authority members - understand the relationship and have strengthened it. Councillors should involve themselves more with the business of approved housing bodies on a regular basis because AHBs work in partnership with and are responsible to local authorities.
The problem is that local authorities have very little say in any of this, apart from passing the budget every year for the payment and availability scheme. That is the reality which the Minister of State must recognise. On value for money, I understand that the Government will bring in several schemes to try to deliver the maximum number of houses but the problem relates to the cost to the taxpayer. The Minister of State did not clarify whether the payment and availability scheme is a contra item, in other words, whether the local authority is reimbursed by the Department from public funds. Of course, the Government is happy with the delivery by approved housing bodies, and the AHBs are very happy because they have a good cashflow to deliver, manage and maintain the housing stock. The problem is that local authorities do not have such cashflow.
As rents continue to escalate over the next year or two because we do not have rent controls, so will differential rents, meaning that the flow of cash out of public funds on a payment and availability will increase. Could we offer the same payment and availability deal to local authorities to allow them to build in the same way as AHBs and to buy and get those houses into use? The State would be the ultimate owner of the houses. The problem with the payment and availability scheme as currently operated is that the State will not own one brick of those houses after the agreements expire after 30 years.
The Deputy made some misleading comments. Local authorities are very much involved in the delivery of housing through approved housing bodies. No approved housing body scheme can come through the system without the approval and involvement of the local authority. I would rather if the Deputy did not mislead the House or cause confusion for councillors.
Elected members have no say in the matter.
Approved housing bodies must work through the local authorities, which sanction the schemes in combination with the Department. They are reimbursed for the costs of that - that is why the housing budget is there. I remind the Deputy that the housing budget this year is the largest ever, with a housing spend of approximately €2.5 billion. The combination of work with local authorities and housing bodies helps us to deliver the houses the Opposition keeps saying it wants us to deliver. We will deliver 10,000 houses this year. The Deputy should consider the Sinn Féin housing policy, which proposes the delivery of fewer houses using taxpayers' money than is the intention of the Government.
I question that too. I sense a little frustration in the Deputy's voice, but the housing bodies are not for profit. This is a good use of money. They avail of private finance and the Housing Finance Agency; therefore, they use a combination of funding sources, which gives us a good result and helps us to increase activity. I agree with the Deputy that they are in a very strong position to manage their properties. Local authorities are also well funded to do the same and their voids programmes help to turn properties around.
