Murphy says he can’t shorten procurement process for social housing

Soaring rents, stagnant wages and a lack of housing stock has meant Ireland's housing crisis has continued to be a prominent political and social issue for the last decade.

It takes a staggering 5½ years to bring a complex of 100 social housing apartments from inception to completion, one of Dublin City Council's most senior housing officials, executive manager Tony Flynn, said on Monday.

The council planned to reduce this, he said, by using “volumetric build technology” – erecting pre-fabricated modular apartments on site – and implementing emergency planning powers. This could reduce completion times to under 2½ years.

However, he said, the council could do nothing to reduce this further, because of the years between it proposing a development and the award of a contract to begin building.

There are certain parts of the problem like procurement which we'll never be able to get around

On Tuesday Minister for Housing Eoghan Murphy said there was little he could do about it either.

“There are certain parts of the problem like procurement which we’ll never be able to get around,” he told RTÉ’s Morning Ireland. “I tried to short circuit them. I went to the Attorney General to see if by declaring an emergency, for example, we could suddenly create new ways of procuring business and building new houses, and that’s just not possible.”

These same procurement processes were last week described by the council's head of housing, Brendan Kenny, as "horrendous" and partly responsible for pushing up the cost of social housing.

However, the procurement system, the EU-mandated procedure for selecting a contractor for a development, is just one part of the Department of Housing’s four-stage social housing approval process. It kicks in only at stage three of that process.

Nine-step checklist

Before a local authority even submits an application to begin the process, there is a nine-step checklist it must satisfy, including confirming the need for housing on the site, assessing alternatives to meet the need instead of building housing, assessing any potential “abnormalities” with the site, and determining an approximate cost.

Assessing costs can trigger yet another pre-submission process, as Mr Flynn explains.

“For any scheme over €20 million you have to develop a cost-benefit analysis.” Most city council developments would fall into this cost bracket. “You can’t develop a cost-benefit analysis until you have a scheme, which is an outline design, so you have to tie all this up together for a stage-one application, the first stage of a four-stage process.”

The first official stage is to seek approval for design expenditure. In this stage the department will evaluate the need and alternatives to building housing (as already evaluated by the council) before issuing approval in principal to start the design.

The council then prepares its designs and compiles a stage-two submission. Stage two is the point where the council seeks planning permission, but only once the project has again been evaluated by the department for consistency with various regulations and guidelines. Once planning permission is confirmed, the council then completes a detailed design,the design and costs are reviewed by the department, and a pre-tender costs report is prepared by the council.

All going well, the council is allowed to move to stage three – going out to tender, to “procure” the builder to undertake the development. Stage four is the review of the bids and the award of the contract. Stages three and four take approximately six months of the overall process which takes anything upwards of 18 months, if all goes smoothly.

The department said it had “streamlined” the process down from nine stages to four. It has also set a target for completing the four stages within 59 weeks. It has also introduced a single-stage approval process for projects costing under €2 million, though take-up from local authorities has been poor, and city council projects would be unlikely to qualify.

There remained, Mr Flynn said, a “very, very long lead-in time to getting a machine on site and getting a hole in the ground”.