Cabinet fails to reach agreement on housing plan

It's believed that a major row has erupted at Cabinet over the Coalition’s housing plans resulting in a memorandum on the Summer Economic Statement being delayed.  Picture: Eamonn Farrell/RollingNews.ie

A major row has erupted at Cabinet over the Coalition’s housing plans, leading to a memorandum on the Summer Economic Statement (SES) being pulled from today’s agenda.

Senior Government sources have confirmed that agreement could not be reached on signing off the level of funding to be committed to the delivery of housing and as a result, an additional Cabinet meeting will be required this week to sign off on it.

The SES is the last major signpost ahead of October’s budget as to what state the public finances are in.

The Government is due to launch its Housing for All plan this month, but, according to senior Coalition sources, the memo which was due for approval this morning could not be agreed upon.

“It is not good,” said one Coalition source.

“Housing is the problem. There is now going to have to be a second Cabinet meeting this week and Paschal Donohoe is due to speak to it at the budget oversight committee on Thursday,” the source added.

Concern has been expressed that the Government, in seeking to rush several key pieces of legislation through the Dáil this week, has been accused of “making a mess” of things.

Mr Donohoe, the finance minister, and Michael McGrath, the public expenditure minister, had sought to have the SES approved by Cabinet today ahead of the Dáil rising later this week.

A “genuine stand-off” emerged at Cabinet when a visibly irked Mr Donohoe made it clear the SES was not agreed and the failure to bring it to Cabinet risks undermining the fiscal credibility of the Government.

Last week, the Government agreed formally to take the SES today but because of a lack of agreement on the Housing for All plan, it was not ready.

Mr Donohoe reportedly gave a stern warning that you can’t have a plan if you don’t know how you fund it.

At this point, it is understood Taoiseach Micheál Martin went “toe to toe” with Mr Donohoe and said the funding for the housing plan “must be agreed” as soon as possible.

Crisis meetings between officials and Mr Martin, Tánaiste Leo Varadkar, Eamon Ryan, Mr Donohoe, Mr McGrath, and Housing Minister Darragh O’Brien will now take place in order to resolve the stand-off.

The state of play has been described as “pretty serious”. 

The budgetary oversight committee has for weeks been inviting Mr Donohoe to come before it to discuss the SES, but he has kept putting them off amid a failure to agree the funding.

Meanwhile, Defence Minister Simon Coveney has appointed a new chief of staff to the Defence Forces, ministers were informed at Cabinet today.

Major General Sean Clancy of the air corps takes over at the end of September and will succeed Mark Mellett.