National Asset Management Agency (Nama) chief executive Brendan McDonagh will not be offered the position of the Government‘s new housing ‘tsar’ after Fine Gael blocked his appointment at a special Cabinet committee meeting on Thursday.
At the meeting of the Government subcommittee on Housing on Thursday, it is understood Tánaiste Simon Harris told Minister for Housing James Browne that Fine Gael had been “kept out of the loop” about the possibility of Mr McDonagh’s appointment to the role and should have been given advance warning before his name began circulating in public.
A spokeswoman for the Minister said Mr McDonagh had spoken to Mr Browne on Thursday and he had withdrawn his name.
“He [Mr McDonagh] did not want to be at the centre of controversy and felt it was far more important that the Housing Activation Office succeeds. He wishes it every success,” said the spokeswoman.
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The possibility that Mr McDonagh would retain his current €430,000 salary in the new role became the subject of strong criticism from the Opposition in the Dáil this week. Privately, it was also coolly received by Fine Gael; its Ministers stopped short of publicly endorsing the Nama chief for the role over the course of last weekend.
In a short statement, issued jointly by Taoiseach Micheál Martin and Mr Harris on Thursday evening, they confirmed that the Housing Activation Office had been established. Its purpose was to “break down silos and drive delivery of housing”, they said.
On the crucial question of who will lead the new office, the statement was silent. It did add that Mr Browne would “progress the setting up of the Housing Activation Office and report back to the next Cabinet committee on housing following consultation with party leaders on all aspects”.
It is understood that the position of chief executive will be advertised and be put out to a public recruitment process.
The Coalition has been firefighting over the expectation Mr McDonagh would retain his salary if he took up the role.
Mr McDonagh is officially an employee of the National Treasury Management Agency and has been seconded to Nama as chief executive since 2009.
The divergence of opinion over Mr McDonagh’s transfer from Nama represents the first serious falling out between Fianna Fáil and Fine Gael since the Coalition was formed in January.
The subcommittee meeting, which started at 2.45pm, was dominated from the start by the issue of Mr McDonagh’s appointment. Mr Harris indicated that not enough advance warning had been given by Mr Browne. For its part, Fianna Fáil has argued that the Nama chief executive’s name had been in circulation for weeks.
“It purely came down to the process surrounding the appointment of the CEO,” said a source with knowledge of the contents of the meeting. “There remains a lot of support for the housing activation office itself.”
The political risk for both Coalition partners in proceeding with the appointment was elevated, however, by the disclosure that Mr McDonagh would be entitled to retain his current salary of €430,000, almost twice that of a Cabinet Minister.
A source on the Fianna Fáil side of the Government said there was a certain amount of “frustration” as the goal of setting up the office was to move quickly to drive delivery of housing. Recruiting Mr McDonagh was seen as part of that expedited process, said the source.
Sinn Féin housing spokesman Eoin Ó Broin said the reversal “highlighted the complete incompetence of the Taoiseach, Tánaiste and Minister for Housing”.
He said the idea of the activation office was “ill-conceived from the start”.
“How can they be expected to resolve a housing crisis when they cannot even be trusted to set up [this office],” he said.
