Department failed to spend €1bn earmarked for housing over past three years

The Department of Housing has failed to spend more than €1 billion earmarked for housing over the past three years at a time when the State was mired in an unprecedented housing crisis.

New figures show that about €1.52 billion of the department’s capital budget went unspent between 2020 and 2022, including just over €1 billion intended for social and affordable housing.

This is equivalent to the cost of building 4,000 social homes.

The figures were obtained in response to parliamentary queries by Sinn Féin housing spokesman Eoin Ó Broin. They show the department’s underspend in housing amounted to €92 million in 2020; €441 million in 2021; and €471 million last year.

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Exchequer figures published this week show the trend has continued this year with the department’s capital spending for the first quarter of the year put at €232 million, €94 million (29 per cent) below profile.

Responding to the figures, the department said 2022 saw the highest level of housing expenditure ever in a single year, with almost €3.5 billion “expended on housing”.

“However, the impacts on the housing spend during 2020-2022 arose as a direct result of challenges arising from the impact of Covid-19 restrictions on the construction sector, with sites closed at times and, also, the unprecedented and unexpected challenges arising from the Russian war on Ukraine,” it said.

“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,” it said.

The department is allowed to carry over into the next year up to 10 per cent of its capital allocation under budgetary rules.

“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 initially anticipated, the capital can transfer to meet the commitment up to a maximum of 10 per cent,” it said.

Mr Ó Broin, however, disputed the department’s explanation for the underspend, insisting that red tape and bureaucracy were the principal reasons for the underspend.

“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,” he said.

“The level of red tape and delay imposed on local authorities and approved housing bodies [AHBs] by the Department of Housing and the Department of Public Expenditure and Reform is the principal problem,” he said.

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The unspent capital could have delivered at least an additional 4,000 social and affordable homes, Mr Ó Broin said.

“This could have housed half the total number of households currently in Department of Housing-funded emergency accommodation,” he said.

“Local authorities, approved housing bodies and Opposition politicians have been highlighting this problem for years yet the Minister for Housing has refused to act,” he said.

The department typically funds local authorities and approved housing bodies to build social homes through the Social Housing Investment Programme; the Capital Advance Leasing Facility and the Capital Assistance Scheme.

It funds the construction of cost-rental and affordable housing units through cost-rental equity loan funding and the affordable housing fund.