We will hit housing targets, despite inflation and shortages, claims Taoiseach

Taoiseach Micheál Martin said the Government is spending 'about €4m per annum now on housing'. Picture: Sam Boal/RollingNews.ie

The Government will hit its house building targets this year despite a €200m underspend in the housing delivery budget since April, the Taoiseach has said.

Micheál Martin was responding to reports that building inflation, energy costs, and a shortage of supplies have been blamed for a €200m capital underspend by the Department of Housing between April and June.

House building targets set by Housing Minister Darragh O’Brien have been missed since 2020, with the latest figures showing the capital spend was 28% behind profile at the end of June, the Irish Examiner reported on Wednesday.

While Covid-19 and the various lockdowns hit the construction industry hard, and impacted on housing delivery and construction targets, inflation and supply chain issues are now affecting delivery.

It follows warnings in May from one of the state’s largest approved housing bodies, Respond, about the looming threat of inflation on the sector’s ability to deliver.

Housing targets set by Minister Darragh O'Brien have been missed since 2020.

Speaking at the launch of a €13.5m social housing scheme in Cork, at which the Taoiseach attended, Respond chairman, John O’Connor, welcomed the multi-annual capital commitment under the Government’s Housing For All strategy which he said gives housing bodies certainty to plan, but he said the sector’s ability to deliver projects on time and on budget was becoming increasingly difficult, with material costs and financing costs on the rise.

Mr O’Brien has now presented figures to his Cabinet colleagues which show that in the second quarter of the year, the department of housing was due to spend €705m on capital expenditure on housing and related matters, but only €506m was spent.

Mr O’Brien said the shortfall is partly explained by delays in some construction projects due to challenges of price and energy inflation, as well as supply chain disruption, and he has ordered a mid-term review to ensure the allocated monies are spent before the end of the year.

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Speaking in Cork, Mr Martin said it must be borne in mind that the figures come mid-way through the year.

“It’s a mid-year outcome so, to the end of the year, we want to obviously make sure that we spend what we have allocated, although as you know some can be moved into next year in terms of projects,” he said.

“But we are spending about €4bn per annum now on housing.

“The minister for housing is confident he can catch up on that and that money (the unspent allocation) will get spent before the year is out.

“At the moment we are aiming for in and around 24,500 houses to be built this year and that remains the target so there is no impact yet on that.”