Public-private built social homes could cost €420m more than voluntary sector’s

The cost of delivering 1,500 social homes through public-private partnerships (PPP) could be up to €420 million higher than building the homes through the voluntary sector, it has been claimed.

Sinn Féin housing spokesman Eoin Ó Broin said he had obtained figures showing payments for upkeep and maintenance of the units were almost six times higher for a PPP than those currently charged by voluntary approved housing bodies (AHBs).

He said the consortium which had won the contract to deliver the first social housing units would be paid €181 million over 25 years for maintenance and management of the housing. This breaks down to €13,558 per year for each of the 534 units that the consortium, Comhar Housing, is planning to build.

However, figures from the Department of Housing show that the average annual cost for the five largest AHBs for management and maintenance of their social housing stock is €2,375.

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Mr Ó Broin said that the price for delivering the first tranche of social housing through PPP would be €149 million higher than standard social housing, and if the costs were replicated across the entire 1,500 units planned under Rebuilding Ireland, it would cost an additional €419 million.

In a statement, the Department of Housing said that Mr O Broin was “not comparing like with like”.

“Assumptions made as a result of such a direct comparison would prove wholly misrepresentative,” a spokesman for the Department said, adding that the PPP figure “accommodates costs that would not feature in an AHB operational cost,” including the cost of capital, inflation and ancillary works such as community facilities.

Mr Ó Broin disputed this. “AHBs do spread capital costs over 25 years, they do have financing costs, they do have to factor in inflation and they also provide ancillary services. While there will always be some variation in costs from one contract to another this does not explain why the PPP management cost is almost 600 per cent more expensive.”

He said this was an “obscene use of taxpayers money”. The total value of the contract for Comhar is €301 million, with €120 million earmarked for construction of the social homes. Comhar had not responded to queries at time of going to press.

“To put this in perspective €419 million would provide up to 2,000 additional social housing units via the standard council or AHB build and acquisition programme. This would provide housing for all of the 1,707 families recorded as homeless by the Department of Housing in February of this year,” he said.

Mr Ó Broin called for a review of the costs of the project before any more social housing PPPs were agreed. “I will also be writing to the Public Accounts Committee and the Comptroller and Auditor General asking them to investigate the excessive and unjustifiable cost of the contract signed last month.”

The department said the bundle of social homes to be delivered under PPP met the four value-for-money tests set down by the Department of Public Expenditure and Reform.