State urged to rethink cut to housing fund and consider discount purchases

THE GOVERNMENT has been called on to reverse a cut of almost €400 million in funding to local authorities for the provision of social housing.

The Local Authority Housing Fund, under which social housing is supplied, has been cut by over half, from €719 million last year to €330 million for 2010.

The cut will encourage local authorities to lease housing from developers and landlords instead of building their own, in line with current Government policy.

Opposition spokesmen on housing have condemned the cuts.

Fine Gael deputy Terence Flanagan said the cuts were unacceptable while 100,000 people were waiting to be housed.

He said Minister for Housing Michael Finneran was “seemingly hell-bent on pushing through a leasing scheme which favours developers and landlords rather than ensuring long-term security for local authority tenants”.

Instead of encouraging leasing, the Government should take an equity stake in the houses being leased and, thus get value for money for the taxpayer, he said.

Mr Flanagan suggested the Government make available resources to local authorities to block-purchase homes “at a serious discount to the current market price”.

“Housing policy now consists of a new long-term leasing rental scheme which is a waste of taxpayers’ money and the latest example of Fianna Fáil bowing to developer demands,” he said.

Labour Party spokesman on housing Ciarán Lynch said the cuts were deplorable and he was particularly concerned about the leasing scheme.

“I even went as far as referring the scheme to the Comptroller and Auditor General who has indicated that an in-depth investigation is warranted,” he said.

He said it would make more sense to buy houses than lease them.

Responding to the remarks, Mr Finneran said every time he introduces a new initiative to reflect changes in the housing market and financial circumstances, Fine Gael accuses him of bailing out builders and developers.

He said a system that provides only one solution to housing need, a house for life and succession rights for family members, is not one that our current circumstances support.

“It is my view a combination of new building/acquisitions and long-term leasing – which fits squarely into the Government’s stated housing policy objectives – represents the most significant possibility we have for making meaningful inroads into the level of need that we are faced with,” he said.