Spending on housing 32% down on forecast for year despite crisis
‘Worrying’ underspend revealed just days after homes for all plan panned for falling ‘hopelessly short’
THE Government department responsible for housing has had a capital expenditure of 31.7% less than projected so far this year, as the number of homes built falls hopelessly short of targets.
Its capital expenditure is more than 20% less than this time last year, despite a projection of a 61.3% increase for all of 2022.
The numbers come from the Department of Finance’s Fiscal Monitor for August, published this month, which shows the Department of Housing, local Government and Heritage’s capital expenditure was 21.1% less this year than last August.
Though the Department did not provide a more detailed breakdown of its expenditure, the majority of its budget for 2022 – around 61% – was allocated for housing.
It comes as ministers were warned last week that the Government’s much touted plan to address the housing crisis is missing key targets and falling hopelessly short of addressing supply issues.
A meeting of the Cabinet Committee on Housing was told by officials that the Housing For All policy is no longer fit for purpose, needs urgent revision and most importantly requires significant additional funding to the original €4bn plan. Given the underspend on affordable housing this year, this is all the more surprising.
Analysis of the data on the number of homes built this year compared to the Department’s projections shows how the underspend occurred. For example, just 228 cost rental homes have been completed this year, against a projection of around 1,366.
The Department grouped cost rental and affordable purchase schemes together to come up with a projection of 4,100 houses completed this year – having previously indicated there would be one cost rental home for every two affordable purchase homes.
Despite all this, Housing Minister Darragh O’Brien, insisted last week the Housing For All plan was ‘there or thereabouts’ on track.
Speaking to RTÉ radio, he failed to provide a figure for how many cost rental homes had been delivered this year but insisted that it was ‘a sizable portion’.
Social Democrats housing spokesman, Cian O’Callaghan, told the Irish Mail on Sunday the underspend was ‘extremely worrying’.
He said: ‘The second [major element of the Department’s budget] is on water infrastructure [around
26%], which is actually related to the delivery of housing as well, because there’s deficits in water infrastructure that are delaying the provision of much needed housing.
‘So it’s very worrying that the Department is more than 30% behind its own targets for this year, and running at a level of more than 20% lower than this time last year when the targets were much less ambitious.
‘Darragh O’Brien promised 10,000 affordable homes a year at the last election, so that lack of delivery is incredibly worrying.
‘The fact that there was a very strong promise from the Minister at the end of last year that 2022 would be all about delivery and the targets will be met this year, and with Covid no longer disrupting construction that 2022 was going to be all about meeting the targets and delivering.’ Last year just over half the number of social homes promised were delivered. There were zero affordable purchase homes delivered and 65 cost rental homes.
Cost rental homes completed so far are being rented for between 25 and 50% below the market rate, and the tenancies are long term – a minimum of 40 years.
A Department spokesman said: ‘Over the period to 2030, the Government’s Housing For All strategy commits to delivering a total of 18,000 cost rental homes. Delivery will increase incrementally, to an average of 2,000 cost rental homes per year. 10,000 cost rental homes will be delivered from 2021 to 2026 by Approved Housing Bodies, Local Authorities and the Land Development Agency.’
The Cabinet meeting was apparently told the objective of delivering 24,600 homes this year is on target. However, the plan will fall way short of delivering the number of new social housing units promised by the end of the year.
A spokesman from the Housing Department told the IMoS: ‘It is important to note that such expenditure gathers pace throughout the year and a significant part of it tends to be typically weighted towards the year end.’
The spokesman said original projections did not foresee mitigating events as the invasion of Ukraine, supply chain issues and inflation.
228 cost rental homes completed this year
‘Department is over 30% behind its own target’