CAPITAL EXPENDITURE INTO housing by the end of September was drastically behind yearly targets, figures provided by the Department of Housing, Local Government and Heritage indicate.
The data shows that major housing programmes had not yet reached half of their yearly targets as October began, and suggests spending must rise significantly during the final quarter of the year if Government spending targets under Housing for All are to be met.
The Housing For All plan, which was launched last year and heralded by the Government as “a radical plan underpinned by record State investment” in housing, guarantees at least €4 billion of capital investment into the sector in both 2022 and 2023.
However, figures from the Department of Housing, Local Government and Heritage provided to The Journal show that just half of that €4 billion figure had been spent by the Government during the first three quarters of 2022.
The department said in a statement that it expects a jump in expenditure towards the end of the year, including another €1 billion of non-exchequer funding, and that the last quarter traditionally sees the highest levels of capital expenditure in housing.
But opposition TDs have questioned whether the government can meet the €4 billion target by 31 December, with one saying “there is no excuse” if the figure cannot be reached during a housing crisis.
It comes the same week as Public Expenditure Minister Michael McGrath said that he does not believe a target for 9,000 new social housing units this year will be met.
Speaking on RTÉ’s Morning Ireland programme on Thursday, McGrath said Housing Minister Darragh O’Brien estimated that this year’s figure would instead be 8,000 new units.
That followed a report by Taoiseach Micheál Martin and Housing Minister Darragh O’Brien to cabinet that they expect delivery targets for new homes under Housing for All to be exceeded for 2022.
The plan aims for over 24,600 new homes to be constructed across Ireland in 2022, with senior ministers hearing this week that 20,807 new builds had been completed by the end of September.
These targets are separate to the spending targets outlined when Housing for All was launched last year.
The Taoiseach also told reporters in Dublin this week that next year’s housing targets will be more difficult to achieve, with an aim for over 29,000 homes in the plan.
“That means we have to be constantly looking at ways to do things in a more timely way,” he said.
Accessing data
The figures on capital spending by the end of September were released by the Department of Housing, Local Government and Heritage as an answer to a Dáil question from Sinn Féin housing spokesperson Eoin Ó Broin.
Ó Broin’s Dáil question asked for “the total amount of general government capital expenditure on social and affordable housing by local authorities, approved housing bodies and the Land Development agency”.
The Journal was unable to find a public version of the answer provided to Ó Broin on the Oireachtas website. However, Ó Broin shared this answer with The Journal after being contacted during a separate FactCheck investigation.
In total, figures supplied by the Department indicate a capital investment of €1.29 billion up until the end of September 2022, though the Housing Finance Agency provided data to The Journal accounting for another €108.5 million lent to local authorities that was not covered by the Dáil response.
While the spending outlined is non-exhaustive, it describes the major pillars of the government’s housing investment, most of which are starkly behind annual targets. The figures indicates the government needs to vastly increase investment during the year’s final quarter to reach the target of €4 billion capital expenditure.
Exchequer funding
The Department of Housing told The Journal that at least €4 billion capital investment into the housing sector was targeted this year, with €1.5 billion provided by the Land Development Agency (LDA) and the Housing Finance Agency (HFA), and a further €2.6 billion provided directly by the exchequer.
While this tallies with the Budget 2022 Expenditure Report (downloadable here), the government’s 2022 Revised Estimates for Public Services (REV) allocates €2.26 billion to capital expenditure on housing, not €2.6 billion.
Another €247 million was separately allocated in the REV to local authority housing, however this was from “unspent 2021 appropriations” carried over from the previous budget.
Furthermore, a breakdown of the 2023 budget shows the government expects another €340 million of unspent housing funds to be carried over to next year, including €240 million of capital funds.
The REV overview describes the department’s carryover in 2021 and 2022 as being at “historically high levels”, citing Covid-19 constraints.
When asked if this future carryover implies the government expects to miss its spending target, the department responded: “Overall expenditure on the housing programme in 2022 will not be determined until the end of the year.”
Comparing department data with the REV shows major gaps between how money was spent as of the start of October and annual targets:
The Department of Housing responded to The Journal’s queries, saying: “Typically, Quarter 4 sees the highest level of capital expenditure as the department recoups claims submitted by local authorities.”
The department said that it would take time to provide a breakdown of how the “almost €2 billion” spent so far this year was allocated. The Journal has not received this information as of the time of writing.
Non-exchequer funding
Of the €4 billion minimum capital investment budgeted for housing this year, €1.5 billion is expected to be provided by the Land Development Agency (LDA) and the Housing Finance Agency (HFA).
The LDA is tasked with allowing state lands to be used to build affordable homes while the HFA is a state-owned company that provides loans for housing.
The capital invested by these two bodies at September’s end was a little over a third of the expected amount.
€534.5 million was loaned out to housing bodies by the HFA, while €12.19 million was spent on capital projects by the LDA.
The HFA provided their figures directly to The Journal.
The Head of Treasury for the HFA, Seán Cremen, told The Journal that the forecast for full-year lending was €1 billion. “Historically Quarter 4, and particularly November/December, is the busiest period for new loan advances,” he said.
The LDA did not respond to inquiries, but the Department of Housing told The Journal: “The LDA expects to have entered into commitments for social and affordable homes delivery in excess of €500 million by the end of this year, the majority of which has already been contractually committed.”
Criticism
Opposition figures criticised these figures and cast doubt on the government’s ability to meet its Housing For All targets of €4 billion capital spending on housing for this year.
“At a time of an unprecedented housing crisis, there is no excuse for lack of capital spend in housing,” Labour’s housing spokesperson, Senator Rebecca Moynihan, said.
“We need to be building more direct housing and yet the government — blaming Covid shutdowns — won’t hit their own social, affordable or cost rental targets next year either, while our homeless lists grow. With construction inflation taking into account we are running to a standstill.”
Social Democrats spokesperson for housing Cian O’Callaghan told The Journal that the delivery of affordable housing was an order of magnitude lower than it needed to be.
“The Government is likely to try and spend down the capital housing budget towards the end of the year by buying up homes from the existing supply of housing, instead of building much needed additional homes and increasing supply overall,” O’Callaghan said.
Sinn Féin’s spokesperson for housing Eoin Ó Broin claimed that the figures provided to him by the Department of Housing for last year show the department would not hit its targets for this year.
“What the Parliamentary Question data supplied to me shows is that actually direct Government capital expenditure in 2021 was just below €1.8 billion,” he said.
“When LDA and Approved Housing Bodies borrowing and expenditure is taken into account the total level of investment last year was just €2.4 billion.
“Given that Budget 2022 and 2023 saw virtually no increase in capital expenditure for the delivery of social and affordable housing, then the final outturn for this year and next year will be broadly in line with the 2021 spend.”
Contains reporting by Stephen McDermott.
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