Chartered Surveyors welcome increased focus on housing but say major changes to public procurement required if targets are to be achieved
‘Limited retrofit programme a disappointment’
Tuesday 13th October 2020. The Society of Chartered Surveyors Ireland has welcomed the Government’s renewed focus on housing in Budget 2021 but has warned that the implementation of budgetary measures need to be fully costed while targets have to be time lined and met.
SCSI President Micheál Mahon said the focus too often at budget time was around headline figures and not enough on results and value for money for the taxpayer. He said given the economic impact of Covid-19 a renewed focus on both was vital.
“In our pre-budget submission we called on the Government to embark on a major public sector house building programme by utilising private sector involvement and leveraging the powers of the LDA. We did this because our independent cost analysis shows the most cost-effective way to deliver social housing is via local authorities. Resources have now built up in the private sector and construction costs are softening so it makes sense to take advantage of the current crisis in this way.”
“The Government has raised the target for new social homes in 2021 from 8,900 to 9,500. While the increase is modest of itself – and we would like to see the detail on how the extra €773m is being allocated – the overall social housing target is still ambitious given our total current housing output – private and public – is around 17,000 units. Most commentators agree that we need to double this figure to meet demand. How then can we scale up housing output to meet these new targets? One key area which needs to be addressed is the system of public procurement. The current system is overly bureaucratic and unless it is overhauled, we will continue to miss these targets.”
“The extension of the recently enhanced Help-to-Buy scheme to the end of next year will be welcomed by first time buyers as it helps bridge the viability and affordability gaps which exists in the new home delivery market. However, we would however prefer to see a more strategic and long-term approach to housing being adopted which would enable consumers and developers alike to plan for the future with more confidence”
“We would also like to see the costs side of the housebuilding equation addressed through the establishment of a Commission for Housing. This could examine ways to reduce the impact of various soft costs such as land, finance, VAT etc while looking at the impact of new regulations on the hard cost side. The allocation of €110m for affordable housing is welcome and we would urge the Government to use this money to fund a new shared ownership scheme as a matter of urgency.”
The SCSI described the allocation of €65m for the retrofitting of 2,400 social homes as quite limited and disappointing. The implementation of a much more expansive programme with funding of €300m had been widely flagged. The SCSI said that while the establishment of an apprenticeship scheme for 1,500 people for retrofitting was a step in the right direction, the mismatch which existed between official targets and the resources required to meet them was enormous.
“According to the National Retrofits Plan 500,000 homes are to be retrofitted over the next ten years. That’s 50,000 homes per annum. Yet funding is now only being made available for a very modest scheme and there is no way these targets will be achieved.“ Mahon said.
The SCSI said the €500m increase in capital expenditure was particularly welcome in light of the impact which Covid-19 is having on the pipeline of construction activity.
“Our recent Tender Price Index showed that tender price inflation has slowed dramatically due to lockdown measures as well as concerns from contractors with regard to future workload. This increase is welcome and we would urge the Government to take advantage of more competitive tendering to deliver key projects for the State in the areas of road, rail and education infrastructure. It is essential that the construction sector has visibility of the precise allocation of this funding to ensure confidence in the pipeline of work in order to avoid the loss of skills from the industry as occurred in the downturn. ”