Budget will help deliver 7,500 new homes in 2015 - Kelly
Issued : Thursday 16 October, 2014
This budget is a milestone budget. It shows that we are slowly becoming a ‘normal economy’ once again where we are neither throwing money around for the sake of short-term popularity nor squeezing savings out of already under pressure public services. It is as progressive as it is prudent and realistic.
Lower and middle income earners are gaining proportionately much more that the better off. I know many sections of the opposition wish this was not the case. People will see this in their pay-packets come January from which point it will become real for people. It will be a small step, but a highly significant one – it will represent the start of recovery to many people and be the start of an era of sustainable growth, where government gives to the people it serves.
This was only made possible because of the sacrifices the Irish people endured. Unpopular decisions were taken, but they were taken in order to get us here – a country with record IDA investment, a country with the highest growth projections in Europe, a country that is taking people out of unemployment and a country with one of the most progressive tax systems in the world. Again, I know the misery merchants on the opposition wish this was not the case.
They have not yet adjusted to an era of economic recovery – their shouts will ring hollow. I have always maintained that spending money you don’t have is not an economic policy, it’s deceitful and dishonest.
And just to focus on one specific area by way of example, let’s just look at some specifics from Sinn Fein’s pre-budget submission on housing that demonstrates this dishonesty.
- Sinn Fein did not propose any increase in spending for homeless services next year. We will increase it by 20%.
- They do not propose any increase in local authority leasing – the quickest way to put a roof over a person’s head.
- They do not have any proposals for the refurbishment of vacant social housing units.
- No specific reference of funding to improve housing conditions for disabled people.
- In fact, there is no proposal to increase any current housing spending from the Department of Environment, yet the Government decided to increase current spending by €52 million.
Their only proposal was to use the strategic investment fund to build 6,000 houses – no detail, no timelines.
While this proposal has merit, it would not likely have any impact on the social housing waiting list in 2015. Let me repeat that – it would have no impact on the social housing waiting list in 2015.
With that kind of thinking, I can only conclude one thing – they are only pretending to care for the sake of political posturing and not delivering anything.
We have gone very quickly from having the problems of a broken economy – with unfinished estates – to having the problems of a growing economy including rising house prices. This is creating all kinds of pressures – especially on the private rented sector. There is no one or easy solution. The solution lies in having a plan - a comprehensive, detailed and action orientated plan and implementing it vigorously. That’s what this Government will do.
In his Budget speech yesterday afternoon, my colleague, Brendan Howlin T.D., Minister for Public Expenditure and Reform, underpinned this Government’s clear commitment to supporting the work of my Department in delivering on its wide and diverse business agenda in 2015 and beyond with a particular focus on delivering a vibrant, sustainable public housing sector.
In addition to delivering on the housing agenda, the provision made in Budget 2015 will enable my Department to deliver far reaching policies and programmes that will promote and support strong and vibrant communities; enhance the role of local government, protect and enhance our environment and deliver reform of the electoral system.
My Department’s Vote for 2015 is some €1.157 billion - €578m Capital and €579m Current. This compares to a total of €817m in 2014 - an increase of €340m or nearly 42%. Over €230m of the increase will go to Housing programmes.
The Government’s commitment to housing is substantial by any objective assessment. €2.2bn is to be invested in social housing over the next three years. Of this, €1.5bn is to be directly invested by the Exchequer, a further €300m will be invested as a result of public-private partnerships and finally off-balance sheet funding of €400m will enable approved housing bodies in the voluntary sector to increase the supply of social housing. More details of this will emerge when the Government announces a comprehensive social housing strategy between now and 2020.
The fact that some 70% of Department’s Vote of €1.157 billion for 2015, over €800 million, is to be devoted to housing is testimony to this Government’s commitment to meeting housing needs.
The Department will work with key stakeholders including the Housing and Sustainable Communities Agency, local authorities and approved housing bodies to secure maximum benefit from these substantial resources.
2015 Housing Spend
I very much welcome the fact that investment in new housing infrastructure has been given priority in Budget 2015. As a consequence my Department’s Housing spend will increase by over 40% on 2014, up from €576 million to over €800 million. Over 7,500 new homes will be provided under a range of housing initiatives in 2015. In addition to providing much needed homes, the multiplier effect associated with this investment package will consolidate growth rates being experienced as the economy moves into robust recovery and also sustain jobs in the construction sector.
Every government since the founding of the State has been asked to increase the provision of social housing. There is no single solution and it will not be done overnight. We are, however, facing increased housing need and it is, and continues to be, my Department’s objective to maximise the delivery of social housing using all of the resources available. Almost 70% of my Department’s 2015 budget will go directly to support a range of housing programmes
2015 Capital Funding
The housing capital spend will come to €453m in 2015, up from €273 million this year and constitute an €180m increase in capital spending. This will see the acceleration of local authority direct build and acquisition of properties. This expanded housing construction and acquisition programme will meet the twin objectives of tackling rising housing need and supporting jobs in the construction sector. The number of housing units delivered through this mechanism wills more than quadruple going from 200 to 946 units. There will also be significant increases in the direct delivery of housing units by both local authorities and approved housing bodies combined, rising from a total of 475 in 2014 to almost 1,400 in 2015.
From a cost effectiveness point of view, it makes sense to bring viable existing properties back into use as quickly as possible. The stimulus package included with Budget 2014 provided €15m, in 2014, for a targeted measure to refurbish vacant houses and flats. In response to a call for proposals, authorities identified over 1,900 properties for refurbishment at a cost of €36m. Using the available €15m, it was possible to approve works on some 952 properties across all 34 local authorities. Properties were selected on the basis of local housing need and the cost effectiveness of the proposals. The additional capital programme in this year’s budget will built on this success and will allow for 1000 extra vacant housing units to be brought back into use.
We also continue to address the legacy problems of unfinished estates and substandard homes and buildings through the Priory Hall Resolution Framework, the Pyrite Resolution Board, and through significant investment in unfinished estates.
2015 Current Funding
Current spending on housing will grow by €52m to €345m which will be used to finance increased local authority housing services, including through the Rental Accommodation Scheme (RAS) and the new Housing Assistance Payment.
The core objectives of the RAS, were to reform the approach towards providing accommodation in the private rented sector for long-term dependants under the supplementary welfare allowance scheme while contributing to the attainment of better value for money for the State in the provision of long-term accommodation options. Up to the end of May 2014, almost 49,500 households had been transferred by local authorities from rent supplement and housed directly under RAS and other social housing options. RAS continues to be a successful programme which has achieved considerable output levels to date and delivered quality housing to a large number of households. The figures speak for themselves.
In total, 7,536 additional housing units will be delivered from a range of measures which, combined with a target of 8,000 for transfers from Rent Supplement to the Housing Assistance Payment, will deliver a total of almost 16,000 housing units in 2015.
In 2015, 400 new housing units will be provided for people with specific needs and up to 150 new homes in the community will be provided for people with disabilities leaving institutional care. Some 7,600 housing adaptation grants will assist older people and people with disabilities to continue living in their own homes.
Tackling Homelessness
As the economy starts to recover, the people who suffered most in the downturn must achieve some respite. I am conscious of the need for immediate action to address the scourge of homelessness. My Department recoups up to 90% of housing authorities’ expenditure on the provision of accommodation and related services for homeless persons. A significant proportion of funding utilised by housing authorities is in respect of services that are provided by Non-Governmental Organisations and I want to publically pay tribute to the vital work they do.
I am increasing the money provided for homelessness by 20%. By allocating a further €10.5 million for this purpose, I will bring the total provision to €55.5 million in 2015.
The availability and supply of secure, affordable and adequate housing is essential in ensuring sustainable tenancies and ending long-term homelessness. In addition to the above measures, I intend to direct Local Authorities to revise their allocation policies for local authority housing so that they will be geared significantly more towards people who are homeless.
Non- Housing Expenditure
Significant resources are also being made available through the Department’s Vote to support the development of strong and vibrant local communities; environmental protection; and local government services.
Some €133m will be invested in Community programmes in 2015, including €46m for the Social Inclusion and Community Activation Programme (SICAP) and €45 million for LEADER.
Funding will continue to be made available to support a range of initiatives in the community and voluntary sector, including support to strengthen and foster volunteerism and philanthropy as well as funding for seniors alert, which supports the provision of monitored alarms to enable older persons, of limited means, to continue to live securely in their homes with confidence. Overall, community and voluntary supports will be up by €1.5 million to €12.3 million.
I remain committed to supporting the Local and Community Development Programme (LCDP) and its successor, SICAP.
Some 10,000 people who are distanced from the labour market will receive direct one-to-one labour market training and supports through the LCDP which will draw to a close in the first quarter of 2015. Its successor, SICAP, which will take account of the newly aligned local authority/local development structures will support a further 30,000 people in 2015.
As the economy emerges from recession, SICAP will create opportunities and provide supports to ease the transition into meaningful employment for the harder to reach in the most disadvantaged areas in society. €46 million will be invested in 2015 to increase access to formal and informal educational activities and resources, and to increase people’s work readiness and employment prospects.
The LEADER elements of the Rural Development Programme, which will receive €45m in 2015 will assist projects that improve quality of life and promote growth and diversification of the rural economy. LEADER is addressing many of the challenges facing rural communities, including through increasing economic activity and generating employment.
It is a key multi-annual programme which will continue to be supported in 2015 as the present programme draws to a close and is replaced by a new LEADER programme.
An additional €10m is being made available to recoup investment made by local authorities following damage caused by severe storms earlier this year. €71m will be paid to the Local Government Fund in respect of Irish Water subvention. Other areas of Department spend in 2015 will include €28m for Water Services); €10m for the North/South Peace Programme ; €8.5m for Landfill Remediation ; and €8m for Fire Services capital investment.
Conclusion
In conclusion, my Department will continue to prioritise the delivery of good quality social housing, including mainstream local authority housing construction this year; enhancing the role of the not-for-profit sector in the provision of social homes; and continuing to work with NAMA, the Local Authorities, and approved housing bodies to maximise delivery of units owned by NAMA or its debtors for social housing over the lifetime of the Government.
What’s more, we are committed to real actions, real plans that will deliver for communities and I intend working vigorously with Minister Coffey to aggressively tackle this country’s various challenges on housing.
