Government red tape blamed for €1bn housing underspend

Sinn Féin's Eoin O Broin said the covid shutdowns to construction could explain part of the underspend, but that it has continued into 2023

Sinn Féin's Eoin Ó Broin said: “The unspent capital funding could have delivered at least an additional 4,000 social and affordable homes." File picture: Larry Cummins

The Government has been slammed for underspending the capital budget on housing to the tune of €1 billion.

Sinn Féin's Eoin Ó Broin said the figures, revealed to him in a series of parliamentary questions, showed that "the Government’s massive underspend on social and affordable housing is contributing to rising levels of homelessness and housing need".

Figures provided to the Dublin Mid-West TD by the Department of Housing show that from 2020 to 2022 Darragh O’Brien’s department underspent its capital budget by €1,517,999.

Mr O Broin said that the covid-19 shutdowns to construction could explain part of the underspend, but that it has continued into 2023.

“Of particular concern is that €1,004,926 of the underspend is from the capital budget for social and affordable housing delivery.

“This housing underspend has been increasing each year Darragh O’Brien has been Minister from €92m in 2020 to €441m in 2021 and to €471m last year.

“While covid-19 construction site restrictions were a factor they are not the main reason why so much money for social and affordable housing is being underspent. Nor does it explain why the annual underspend is increasing each year, even after covid.

“Indeed, information released by the Department of Finance this week shows the trend has continued into 2023 with a 29% capital underspend in the Department of Housing in the first three months of this year."

Mr Ó Broin put the underspend down to "red tape" and accused the Minister of "incompetence".

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“The level of red tape and delay imposed on local authorities and approved housing bodies by the Department of Housing and the Department of Public Expenditure and Reform is the principal problem.

“The unspent capital funding could have delivered at least an additional 4,000 social and affordable homes. This could have housed half the total number of households currently in Department of Housing-funded emergency accommodation.

“Local authorities, approved housing bodies and opposition politicians have been highlighting this problem for years yet the Minister for Housing has refused to act. His inertia and incompetence has resulted in a billion euros of much-needed housing funding unspent, at least 4,000 public homes not built and thousands of people homeless as a result.” 

A spokesperson for Mr O'Brien said the figures referred to in the PQ related to spend across all aspects of the Department and is not solely related to housing and would include water, planning and it also includes capital carryover so for each of the years.

"There were significant impacts on the Department spend during 2020-2022 as a direct result of challenges arising from the impact of covid-19 restrictions on the construction and infrastructure sectors, with sites closed at times and, also, the unprecedented and unexpected challenges arising from the Russian war on Ukraine. 

"This resulted in delays in the pace of project completion due to the need to address the negative impacts on construction cost inflation, energy and fuel prices and supply chain issues etc. As these challenges became apparent Government moved to address them.

"2022 saw the highest level of Housing expenditure ever in a single year, with almost €3.5bn expended on housing, representing an increase of 21% on 2021. Specifically in relation to housing capital expenditure, this increased 32% on 2021.

"Under Section 91 of the Finance Act, 2004, all or part of any unspent appropriations for capital supply services may be carried over for spending in the following year. This provides for the carryover of up to 10% of the REV allocation (Capital) from one year to the next. In the case of significant capital projects, it is important to note that the Capital carryover ensures that where delivery arises beyond the calendar year in which initially anticipated, the capital can transfer to meet the commitment up to a maximum of 10%. 2023 will see further record investment in Housing, with total Exchequer funding of €4bn to deliver housing programmes.”