Department of Housing had to return more than €380m to exchequer amid underspends

The Department of Housing had to return more than €380 million to the exchequer over the last four years amid underspends blamed in part on Covid-19 construction stoppages, the Public Accounts Committee (PAC) will be told.

Despite the ongoing housing crisis the department has struggled to spend its full allocated budget. It was previously reported that it failed to spend more than €1 billion earmarked for housing over the past three years.

The department is able to carry over some of its capital funding allocation to be spent the following year under budgetary rules. However, secretary general Graham Doyle is expected to tell PAC that €382 million has been surrendered back to the exchequer.

His opening statement says the surrendered amount cumulatively represents 1.8 per cent of the total funds allocated to the department. Mr Doyle is to say: “The return of funds to the exchequer occurs when all other actions to complete programmes and maximise delivery have been exhausted, despite best efforts.”

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In relation to housing underspends, Mr Doyle says: “Covid-19 and subsequently in 2022 the Russian invasion of Ukraine, which led to significant interruption to infrastructure delivery, is a critical backdrop to any review of output against expected delivery.”

He says the pandemic saw three construction closures and: “disruptions to on-site work, uncertainty as to costs, supply chain difficulties and interest rate changes affected forward planning of projects”. He adds: “The catch-up endeavour has been immense.”

His statement says: “Notwithstanding the challenges experienced over 2021 and 2022, last year saw the delivery of 7,433 new build social homes.”

Mr Doyle says that “some underspend” resulted from the gap between the number of homes delivered and the 9,000-unit target for the year. He adds that 2022 “was the first year of delivery of affordable homes in a generation” and that “from a standing start almost 1,800 affordable homes were brought about”, while he concedes this was also below the target.

“We know that delivery must be scaled up where the need is most acute, and are confident that the key, large mixed-tenure schemes in Dublin, for example, are now progressing,” Mr Doyle says.

Separately, Minister for Housing Darragh O’Brien has said the continued fall in home ownership revealed by the results of Census 2022 is “starting to reverse”. The rate of home ownership has fallen from 70 per cent in 2011 to 66 per cent in 2022.

Mr O’Brien said measures like the First Home Scheme – which has seen around 1,600 households buy their own home with the help of shared equity with the State – and the Help-to-Buy grant are “crucial” supports to help people get on the property ladder. The Government believed in home ownership and that more than 10,000 first-time buyers have drawn down mortgages in the first quarter of 2023.

“There is no question there’s been a drastic decline over the last 30 years in homeownership but we’re seeing that starting to reverse.”

Mr O’Brien said “good progress” was made last year, and this was a “foundation” for more progress in 2023 when there was €4.5 billion available to invest in housing.

He was speaking at a Dún Laoghaire Rathdown County Council event to mark the opening of three parks – Tully, Beckett, and Ticknick – at Cherrywood, south Co Dublin. Cherrywood is a new town that will ultimately have a population in the region of 26,000.