Wednesday, 11 December 2019

Ceisteanna (36)

Darragh O'Brien


36. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government his plans to review the €2 million eligibility spending threshold for single-stage approval for local authority social housing; and if he will make a statement on the matter. [51986/19]

Amharc ar fhreagra

Freagraí ó Béal (10 píosaí cainte) (Ceist ar Housing)

I will try to abide by the Acting Chairman's request.

I ask the Minister to give an update on the €2 million eligibility spending threshold for single-stage approval for local authority social housing. We have discussed that threshold and it was agreed in the previous budget and again in this budget. Has the Minister issued a direction to local authorities? What is the position with that review? Has he had any interaction with the Department of Public Expenditure and Reform?

I thank the Deputy for the question. The review of the public spending code, carried out by the Department of Public Expenditure and Reform, was considered by the Government yesterday. The code is the central framework for the control and governance of all public expenditure activities, including social housing construction projects, where our responsibility is to ensure value for money in the essential work we undertake to provide housing for our citizens.

The €2 million eligibility threshold for the single-stage process for social housing projects was reviewed as part of the recent review of the code. This has had regard to the level of public funding involved and that raising the €2 million threshold would remove significant oversight from the Department over a substantial element of the social housing build programme, leading potentially to an increased risk of cost overruns or time delays or both. Taking account of these issues, as well as the importance of delivering quality and sustainable housing, no change to the €2 million threshold level is proposed in the revised code.

To date, the uptake of the single-stage process has been modest, at best. Of around 660 capital-funded social housing projects since 2016, approximately 280 are within the €2 million threshold. Of these, only approximately 45 are using the single-stage arrangement.

The reality is that the time involved in approving projects is only a small element in the process of bringing social housing projects from initial conception all the way through to construction. This is borne out by the fact that the single-stage process has the potential to save, at most, six to eight weeks off the pre-construction target programme of 59 weeks. Most of the time within that 59-week period is required to allow local authorities to complete their work on design, planning, procurement and engagement with contractors.

The social housing approval arrangements have already been streamlined by concentrating the nine review stages of the code into just four. The Deputy can be assured that my Department will continue to work with local authorities to ensure that the streamlined processes are operated efficiently, with a view to moving projects through both the single-stage and four-stage approval processes as expeditiously as possible. This is evident in the fact that it has been possible, in some cases, to complete the 59-week four-stage process in as little as 44 weeks.

I am not sure if it is coincidental that this was just reviewed yesterday and the decision was made. I take it the recommendation was for no change. What information does the Minister have on the delays within the process? We are trying to facilitate local authorities being able to tender and procure directly for relatively small schemes. A €2 million threshold basically means eight to ten houses.

It does not make any sense to me that the Department wants to have absolute control over anything above that. One of the concerns raised in some information we got from the Department is based on the belief that it would lose control of approximately 44% of the housing budget. I do not think that is the case. It is not a question of letting local authorities just go off and do it and that there would be no oversight. We need to find a mechanism to deliver building of social houses quicker. This was agreed in the discussions on the recent budget and the one prior to that, yet the Minister has told me this morning that the recommendation is that there would be no change. Is that a Government decision or is it a recommendation?

I thank the Deputy for his follow-up question. To be clear, in the meetings the Minister for Finance, Deputy Donohoe, and I attended, our understanding was that there was an agreement to look at reviewing the public spending code to see if we could. The review has been completed and it was discussed by the Government yesterday.

I was just checking.

That is a coincidence, but it is helpful that it was concluded yesterday so I can answer him today in this way. The Minister, Deputy Donohoe, will make an address on this matter later this morning. It is pertinent to the next question tabled by Deputy O'Brien as well in terms of the cost-evaluation programmes.

Local authorities do not want this and the proof is in the fact that 280 projects could have gone through the first stage of the approvals process but only 45 did. They prefer the four-stage process. We have streamlined the four-stage process down to 59 weeks but now local authorities such as Wicklow County Council are getting it down to 44 weeks. We will continue to streamline the process and to improve and reform it. Among the things that we have done is an internal specification for local authority housing that can be taken off the shelf by local authorities, but also an internal specification not for the facade or front of the home but for the actual layout. If one is going to build 30 homes or 20 homes plus step-down facilities or elderly housing, there are now external layout specifications that can be taken off the shelf by local authorities to help them drive things more quickly. We are moving the housing delivery office into the County and City Management Association, CCMA, which is another important reform that will put the delivery of social housing at the centre of local government again.

I thank the Minister for his response. The reason we have been pushing for this is to try to deliver projects quicker. I welcome the streamlining in the process which is something we have called for as well in relation to design. When all of that is pulled together it would be worth bringing it to the Joint Committee on Housing, Planning and Local Government, potentially tomorrow. I do not know whether the Minister is ready to provide an update on Rebuilding Ireland.

It is not true to say that local authorities do not want this; there is a particular reason for that. It is because of the liabilities that may be foisted upon them. The only reason is the financial stick that is hanging over them. I believe many local authorities would be in a position to deliver projects quicker if they were allowed to do it themselves with oversight from the Department. The sum of €6 million was a mid-point. We would go further, namely, to €10 million, in particular in local authorities' that have large housing waiting lists. We are looking at more than 130,000 people currently. If we keep building at the current rate, we are not going to keep up with the demand and we will not start eating into those lists. I am talking about building social houses, not buying existing built stock. We must get back into building and building quicker and delivering quicker.

We are getting back to building social housing. Next year we will build more homes for social housing than were built in any of the past 20 years, including any of the boom years. That is very important. We can do that because of the work that we did in the initial stages of Rebuilding Ireland and it is because of the reforms that we continue to make to the approval process that we can do that more quickly.

If Deputy O'Brien were to put himself in my shoes and look at a recent project such as the children's hospital, which his party and others criticised in terms of cost overruns, he would not then, on reflection, want to lose even more oversight of cost controls in his Department by doing something that would seem to be both risky in terms of capital delivery but also might even lead to further delays if projects came forward that he could not stand over in terms of value for money. For example, one local authority could come forward with plans to build apartments at a unit cost of at least €500,000 if not €600,000. We would only see more of that if we increased the thresholds. Again, the four-stage process has been streamlined down to 59 weeks and it is down to 44 weeks in some local authorities. The person who has driven that in Wicklow is the chair of the housing committee in the CCMA. We are now putting the housing delivery office into the CCMA so we are going to see those improvements in other local authorities. I will see if I can provide the documents to the Oireachtas joint committee this afternoon.

Or if not, then the following one.

Yes, perhaps the following one. That would be helpful. I thank Deputy O'Brien.