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Government sleepwalking into Approved Housing Body reclassification - Eoin Ó Broin TD

21 December, 2017 - by Eoin Ó Broin TD

Sinn Féin housing spokesperson Eoin Ó Broin has accused Minister Eoghan Murphy and the Government of “sleepwalking into the reclassification of approved housing bodies by Eurostat as part of the government sector”.

Deputy Ó Broin’s comments were made following a decision of the CSO to recommend to Eurostat that Approved Housing Bodies should be treated as part of the government sector thus placing their debt and spending on the Governments balance sheet.

Deputy Ó Broin said:

“Yesterday the CSO notified the Government that it is going to recommend to Eurostat that the Approved Housing Body sector be reclassified as part of the Government sector.

"If Eurostat accept this recommendation it would mean that all historic and future debt and expenditure by the Approved Housing Bodies would be on the Governments balance sheet.

“While much of the historic borrowing of Approved Housing Bodies is already classified as Government debt, reclassification would have a significant impact on future borrowing and expenditure plans for the sector.

“Approved Housing Bodies such as Cluid, Respond, Tuath and Cooperative Housing Ireland, borrow and spend in the region of €200m annually on new social housing projects.

"This amount is set to increase in the coming years as the sector it hoping to move from delivering 2000 extra social homes a year from 2018 to 3,000 plus by 2021.

“If the borrowing and crucially the spending of these bodies is reclassified as government expenditure it will impact on the governments fiscal space and future capital investment plans. This could jeopardise a crucial element of the Governments targets for delivering more social homes next year.

“Currently Approved Housing Body deliver of new social homes is outstripping Local Authorities, particularly as the bodies can access finance more quickly to Billy large turn key developments.

“Any threat to this flexibility or to this supply of units will set the Governments housing plan back significantly.

“Despite the fact that I have raised this matter in the Dáil with both Ministers Murphy and English they appear to be sleepwalking into the reclassification of the Approved Housing Bodies. They do not appear to have a contingency plan to ensure no disruption of delivery in 2018 or a longer term plan to have the Eurostat reclassification reversed if the EU agency makes such a determination early next year.

“Minister Murphy must come to the Dáil in early January and make a statement on the matter outlining how he intends to address the potential risks to increased social housing delivery from any reclassification of the Approved Housing Body sector.”

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