Housing spending more than €80m behind target for first three months of year

Government spending on housing was more than €80 million behind target in the first three months of the year, as the Department of Housing continues to struggle to use all its budget even in the teeth of the housing crisis.

Minister for Housing Darragh O’Brien is due to give an update to Cabinet on Tuesday on spending by his department – and will tell them that when carry-over items from last year are included, capital spending is €83 million behind the amount the Government budgeted for the first quarter of 2023.

It emerged earlier this year that the Department of Housing failed to spend more than €1 billion earmarked for housing over the past three years.

With the economy suffering from so-called “capacity constraints” – factors such as the labour market, which is at full employment – Government departments are struggling to spend their entire budget, despite huge levels of tax flowing into the exchequer. While year-on-year spending in housing has increased, the figures to be shared with Cabinet show the nature of the challenge facing the Coalition is deeper than funding.

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Last week, it emerged the Department of Transport had underspent its capital budget by almost €100 million during the same three-month period. In both instances, officials are said to be optimistic the trend will even out over the rest of the year.

Elsewhere, the Government will consider new plans for a windfall tax on energy companies. The Coalition is under pressure to get the charge on a legislative footing before the Dáil rises for its summer break. Minister for the Environment Eamon Ryan will tell Cabinet colleagues that he will be dividing the legislation into two separate Bills: one aimed at the oil and gas sector, and the other at companies such as wind energy producers, which have enjoyed windfall gains.

[ Ireland entering a ‘much more difficult phase’ of housing provision, construction body warns ]

The aim is to introduce both parts of the windfall legislation – termed the temporary solidarity contribution – and the market cap before the summer break, with the former to be published first and the market cap before mid-July, and both commencing in the autumn. The estimated yield of between €280 million and €600 million yield is unchanged and is earmarked to help homes and businesses with energy costs this winter.

Elsewhere, Minister for Further Education Simon Harris will brief Cabinet on an amendment to the construction licensing Bill – and signal that he is examining the issue of apprenticeship pay and how apprenticeships can be better supported financially. He has commissioned research to establish mechanisms to support apprentices and businesses more, including through possible legislative change.

Tánaiste and Minister for Defence Micheál Martin will seek Cabinet approval for continued deployments with UN missions in Syria until March or April next year, and for up to 13 Defence Forces personnel to serve in Kosovo as part of the UN’s KFOR mission, which Ireland has been part of since 1999.

Minister for Public Expenditure Paschal Donohoe will update Cabinet on Brexit Adjustment Reserve funding – including engagement with Brussels over investment in Rosslare Harbour.

Minister for Health Stephen Donnelly will seek approval from colleagues for plans for the flu vaccination programme this coming winter. He will say the strain on the hospital system during winter 2022/23 was shown with over 1,000 children under 15 admitted to hospital. The flu vaccine will be offered to adults aged 65 and over, children aged 2-12 and at-risk groups.

Minister for Finance Michael McGrath will bring annual reports from Nama and the Home Building Finance Ireland agency to Cabinet.