Local authorities have been ordered by the Department of the Environment to get cost approval for all future housing developments in what appears to be part of the Government's current round of public-spending curbs.
In a circular issued to local councils on July 30th, but unpublished until now, the Department said that "due to the general budgetary constraints in current economic circumstances" sanction must be sought for planned new social housing schemes before contracts are signed with builders.
Each local authority has also been warned in the circular not to overspend its house-building budget, which the Department warns would be "strictly applied" this year.
It states: "No additional funding will be made available above that allocated to each authority.
"The Department will closely monitor each individual authority's programme to ensure that the maximum output is obtained from the resources available to the programme nationally."
The circular was issued days after the last Cabinet meeting before the summer break, at which millions of euros in public spending cuts were agreed.
It said that it was now necessary to allow the Department to "exercise greater management of the implementation of the \ programme across all local authorities".
There are an estimated 50,000 people in need of social housing around the State, an increase of 11,000 on the 1999 figure.
In Cork, single parents with one child are waiting up to seven years for a local authority house in some cases.
In the past month, the Department agreed a budget of €784 million for this year's capital housing programme.
The directive was sharply criticised last night by Mr Bernard Allen, of Fine Gael, who described it as another example of "Government cuts by stealth".
He added: "This is undoubtedly a mechanism designed to allow the Government to implement massive cuts in the housing programme. It gives the Department of the Environment the power to delay a decision on approving various schemes, thereby delaying the housing spend in a given year. It is a cut by the back door."
Mr Allen said that the directive would result in massive delays in social housing developments and would effectively put a brake on the housing construction programme.
He said he was also concerned that the directive would take power away from the local authorities. Up to now, councils have had the power to go ahead with contracts for social house-building once each unit cost was under a certain ceiling.
The circular states: "It will now be necessary, with two exceptions,. for your authority to obtain budget cost approval from the Department for proposed schemes prior to tenders being sought and to obtain sanction to accept tenders before contracts may be signed."
The exceptions relate to one-off rural houses and to buying second-hand houses.
The circular also bans local authorities from using so-called "turnkey schemes", where they buy an entire development from a builder to meet the housing demand. This year, "turnkey schemes" will account for up to 1,000 of the 5,500 local authority homes being built.
This is a crucial change to previous policy, which allowed local authorities to buy housing estates from builders without reference to the Department.
A Department spokesman last night denied that the new measures amounted to cuts. "There is no question of cuts. We are just keeping an eye and making sure that there is no over-expenditure."
The Department's circular has also angered local authorities. A senior housing executive in one of the State's biggest councils said yesterday that the directive could seriously delay the housing programme.
The executive, who did not want to be named, said: "It could take weeks and weeks to get approval and may set back our programme significantly."