LAST UPDATE | 6 Apr 2023

THE GOVERNMENT HAS failed to spend over €1 billion of its housing budget over the last three years.

New figures show that the Department of Housing were unable to spend all funding allocated to social and affordable housing projects in 2020, 2021 and 2022.

Last year, the Department left €471 million in capital funding for housing unspent, while in 2021 €441 million was left unspent.

In 2020, there was €92 million in capital funding for housing left unspent.

In total – between 2020 and 2022 – there was an €1,004,926,000 underspend on capital funding for housing projects.

Across the entire Department, which has responsibility for local government as well as bodies like Met Éireann, the capital budget underspend was €1,517,999,000.

Under Government expenditure rules, up to 10% of any underspend is able to be carried over into the following year.

While there was an underspend last year, the Government did meet its overall housing target under the Housing For All plan, with over 24,600 homes being built.

However, it is currently unclear how many social and affordable homes were built last year, with official data not yet available.

The data was released to Sinn Féin’s housing spokesperson Eoin Ó Broin through a parliamentary question.

According to Ó Broin, the capital underspend on housing would have been enough to build an additional 4,000 social and affordable homes.

“The unspent capital funding could have delivered at least an additional 4,000 social and affordable homes,” Ó Broin said.

“This could have housed half the total number of households currently in Department of Housing funded emergency accommodation.”

Ó Broin said while construction site closures due to Covid-19 lockdowns were a factor in the underspend, they are not the “main reason”.

“While Covid-19 construction site restrictions were a factor they are not the main reason why so much money for social and affordable housing is being underspent. Nor does it explain why the annual underspend is increasing each year, even after Covid,” Ó Broin said.

Labour leader Ivana Bacik has also criticised the underspend, saying that Housing Minister Darragh O’Brien is “out of his depth”.

“I am shocked, but not surprised, at the failure of Fianna Fáil and Fine Gael to deliver on housing. This Government has consistently failed to live up to its own hype,” Bacik said.

“We all accept that it takes time to build a home. But to see the shocking failure to control the controllables and spend money on what is the crisis of our lifetime is nothing short of a disgrace.”

In a statement, the Department of Housing said that the highest ever level of spending on housing occurred last year, with €3.5 billion being spent by the Government.

However, a spokesperson admitted that there were difficulties, particularly due to the closure of construction sites and the impact of the war in Ukraine.

“The impacts on the housing spend during 2020-2022 arose as a direct result of challenges arising from the impact of COVID-19 restrictions on the construction sector, with sites closed at times and, also, the unprecedented and unexpected challenges arising from the Russian war on Ukraine,” a spokesperson for the Department said.

“This resulted in delays in the pace of project completion due to the need to address the negative impacts on construction cost inflation, energy and fuel prices and supply chain issues etc.

“As these challenges became apparent Government moved to address them.”

Housing body criticism

The Irish Council for Social Housing (ICSH), who represent approved housing bodies, said that it was “not surprising” that there was a massive underspend.

The said the construction sector lockdown of 13 weeks in 2021, with some exceptions, “was a very challenging experience for residential housebuilding”, particularly as it came after a seven-week construction lockdown and rolling delays in 2020.

It said Brexit-related supply obstacles, price increases and workforce issues also affected delivery.

ICSH chief executive Dr Donal McManus said there was an issue around the wider economic viability of homes during the period, which led to schemes being revised or not started in the first place.

Dr McManus said “a continuum of problems” led to thousands of units unable to progress, while AHBs had previously reached delivery of 4,000 homes per year in 2019.

Constraints to delivery in 2022 included construction price “hyperinflation”, interest rate rises, capacity issues and the availability of affordable land.

The Journal reported earlier this year that the Department of Public Expenditure and Reform (DPER) had raised concerns about the ability of the Department of Housing to spend its budget, particularly due to rising construction costs.

“Given continuing challenges in the external environment relating to construction inflation and interest rate increases, it is anticipated that DHLGH [Department of Housing, Local Government and Heritage] may continue to have difficulty in spending its capital allocation in 2023,” reads the briefing note.

Additional reporting by Press Association