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‘Shockingly low’ 8% of Government housing fund spent

New data shows 16 million euro of the Government’s 195 million euro housing activation fund has been spent since it was announced three years ago.


Housing Minister Eoghan Murphy (Brian Lawless/PA Wire)

Housing Minister Eoghan Murphy (Brian Lawless/PA Wire)

Housing Minister Eoghan Murphy (Brian Lawless/PA Wire)

Only 8% of an almost 200 million euro Government housing fund has been spent three years after it was launched, new figures have revealed.

So far just over 16 million euro of the 195 million euro allocated to the Local Infrastructure Housing Activation Fund (LIHAF) has been drawn down since it was announced in 2016.

The fund, which provides investment in public off-site infrastructure such as roads and water to prepare sites for construction, forms a core part of the Government’s Rebuilding Ireland policy to tackle housing and homelessness.

30 major public infrastructure projects received final approval under the fund, to facilitate the delivery of almost 20,000 new homes across public and private sites by 2021.

But to date 814 homes have been built, according to new Department of Housing data.

The low drawdown of the fund was outlined by Housing Minister Eoghan Murphy to Fianna Fail’s housing spokesman Darragh O’Brien, in response to a parliamentary question.

Clearly the red tape surrounding the scheme is clogging up drawdownsDarragh O'Brien

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Mr O’Brien described the rate of spending by the LIHAF as “shockingly low” and said it was compounding the housing crisis.

“It has delivered just 814 homes out of 19,979 after three years,” he said.

“The fund has spent just 16 million euro out of the 200 million euro earmarked for investment, 8% of what was promised.

“The major time lag between Government promises and delivery is compounding the housing crisis across the country.”

Fine Gael launched its Rebuilding Ireland programme in July 2016.

“LIHAF was a flagship policy to deliver affordable homes but it seems to be sinking under the weight of delays,” the Dublin Fingal TD claimed.

“The three-year time lag raises serious questions around the effectiveness of the fund and its operation.

“Clearly the red tape surrounding the scheme is clogging up drawdowns.”

Mr O’Brien called for the fund to be reviewed to ensure it is fit-for-purpose and its drawdown “speeded up to help get bricks and mortar into the ground”.

Mr Murphy, who provided the figures, described the fund as a “key initiative” of Rebuilding Ireland and said it aims to “enable housing developments to be built on key sites at scale”.

He said that the LIHAF was not put in place as an affordable housing scheme within the normal understanding of that term, but instead was “designed to activate housing supply, which is a crucial factor in terms of moderating house prices and thereby improving affordability generally”.

The Dublin Bay South TD said that 629 of the 814 homes delivered through scheme by the end of the first quarter of 2019 were affordable or cost-reduced properties.

He added that of the 19,979 properties due to be completed by 2021, some 7,986 would be affordable and cost-reduced homes.

“2,300 affordable homes will be delivered on mainly publicly-owned lands supported through LIHAF, subject to planning permission, along with an additional 5,686 homes which will benefit from a LIHAF-related cost reduction, some of which are already coming to market,” Mr Murphy said.

Addressing the low drawdown, he said: “In terms of LIHAF funding drawdown, thus far, most projects have been at the design and planning stages, with the bulk of expenditure arising during the construction phase, and this is reflected in the level of expenditure to date.

“As more projects progress further through construction/completion of infrastructure works it is expected that the drawdown will increase significantly during the rest of 2019 and 2020.”

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