Here is the full statement the Department of PER gave The Journal for the factcheck on whether Ireland could bend the EU’s spending rules to spend more money on building homes:
Prior to the onset of Covid-19 expenditure operated under the preventive arm of the Stability and Growth Pact. Under this arm of the EU Fiscal Rules, Ireland was expected to be either compliant with or progressing towards its medium-term budgetary objectives (MTOs) of a structural budgetary deficit of less than 0.5% of GDP or better.
Overall expenditure policy is currently operating under the General Escape Clause under the Stability and Growth Pact due to the Covid-19 crisis. As such, there are no set expenditure limits, either for current or capital expenditure, implemented by the EU at the moment. The limits on expenditure are applied through the overall exchequer ceilings available to each sector as set out in Revised Estimates Volume (REV). It is the responsibility of each Department to assign exchequer funds to respective priorities within their sectors.
In 2021 Exchequer funding will support the delivery of
12,750 new social homes will be delivered through build, acquisition and leasing programmes, including an increase on new-build activity to some 9,500 additional homes.
Total capital funding available for housing in 2021 is €2.031 billion, a large element of which will be used to deliver 10,300 new social homes the vast bulk through build with a limited targeted acquisition programme.
The total current funding available of €1.276 billion will support a range of other programmes, and, in particular, the delivery of 2,450 new social homes through long-term leasing by local authorities and approved housing bodies (AHBs).
While we are currently operating under the General Escape Clause under the Stability and Growth Pact, this will not always be the case. The resumption of the EU fiscal rules will take place at some stage and could be as early as 2023. In addition fiscal rules are not the only constraint on Government expenditure. It should also be noted that Ireland already has a very elevated level of debt compared to other countries. Furthermore, the ECB’s bond purchasing programme will not continue indefinitely and could even come to an end as early as next year. Over the medium term, these factors need to be considered.
Boosting the supply of housing is an absolute priority for the Government and will be a key part of its new housing plan ‘Housing for All’, which will be published by Minister O’Brien next month. The plan will build on our commitments in the Programme for Government to prioritise the increased supply of public, social, and affordable homes, and to put affordability back at the heart of the housing system.
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