Expenditure on the Housing Assistance Payment (Hap), Rental Accommodation Scheme and long-term leasing of accommodation by local authorities and housing bodies do not represent value for money for the taxpayer, the Dáil Public Accounts Committee has said.
In a report on Wednesday, the committee said that these arrangements “do not provide the State [with] long-term assets, and are not effective long-term solutions to social housing needs”.
More than €500 million per year is spent on the Hap scheme under which local authorities make a monthly rental payment to landlords and the tenant pays a weekly contribution.
However, the committee in its latest report reiterated its finding originally made in 2021 that the Hap scheme is not providing value for money.
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Committee chairman Brian Stanley of Sinn Féin said while it was clear that active Hap tenancies reduced in the years 2022 and 2023, “this is not happening at a fast enough pace to result in significantly cutting expenditure on a scheme that does not result in value for money for the exchequer”.
“The exchequer continues to fund the scheme to the tune of well over half a billion euro annually but the State at no point acquires the housing units supported by Hap,” he said. “ The committee also questions the effectiveness of the scheme as a support for tenants, as many Hap tenants are making top-up payments.”
The committee said the Department of Housing should carry out and publish an assessment of value for money from the Hap scheme, including a comparison of the value for money obtained from public-private partnerships, and its own build schemes.
The committee also expressed concerns about local authorities engaging in long-term leasing of housing units.
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Mr Stanley said long-term leases for the four Dublin local authorities alone amounted to 52 per cent of the 3,831 long-term leases delivered from 2019 to the third quarter of 2022.
“That proportion grows to 73.3 per cent for the same period when the local authorities for Cork City, Kildare, Louth, Meath, and Wicklow are considered. The committee is concerned that almost three-quarters of long-term leases have been delivered in areas where prices in the general property market are high, and therefore it is likely that construction or acquisition would be cheaper,” he said.
“The committee views long-term leases as a costly short-term solution to the continual need for social housing, a solution whereby such homes do not become an asset of the State on completion of the lease.”
Mr Stanley said the committee wanted the department to provide it by April 2025 with a value-for-money review of long-term leasing schemes compared to the construction and/or acquisition of social housing.”
The committee also questioned the value for money achieved through an expenditure of €639 million on the delivery of nearly 1,000 social housing units in Dublin, Cork, Galway, Waterford, Clare, Kildare, and Roscommon under a public-private partnership (PPP) scheme. It said the value for construction and life-cycle costs was approximately €640,000 for each unit.
Mr Stanley said there were five further bundles of social housing units to be delivered under this programme, which are projected to have approximately 3,500 more units completed.
“If these units were also projected to cost €640,000, this would result in a total cost of €2.88 billion for all seven bundles in total.”
He said the committee was concerned that it could not evaluate whether the units delivered through this PPP programme represented good value “as commercial sensitivity means the total cost, minus construction costs, in the tenderers’ models will remain confidential until a specified period of time has elapsed”.
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