The finding comes as part of a damning report by the committee on its engagement with the Department of Housing and bodies including the Approved Housing Bodies Regulatory Authority and the Residential Tenancies Board.
These engagements took place between 2022 and 2023 and following analysis, the committee highlighted five key issues.
The committee highlighted issues around the oversight of, and spending on HAP, a lack of value for money from long term leasing and a shortfall in new social housing delivery.
This is not the first time the committee has highlighted issues with schemes like HAP.
Chair of the committee Sinn Féin’s Brian Stanley said in 2021 the committee reported that spending on short term housing supports like HAP or the Rental Accommodation Scheme (RAS) did not provide value for money because the state did not acquire an asset at the end of the lease.
A recommendation from the committee at the time said the Department of Housing should reduce the spend on these payments and instead focus on increasing housing stock in the country.
“However, expenditure on HAP only fell by less than €3 million from 2021 to 2022, with the overall expenditure on HAP amounting to €539 million in 2022,” Deputy Stanley said.
“HAP expenditure was €537.4 million in 2023, while overall HAP expenditure from 2014 to 2023 was just under €3 billion,” he added.
While the TD acknowledged that HAP tenancies have decreased in 2022 and 2023, Mr Stanley said the reduction was not happening quickly enough to result in a significant spending cut.
The Department still includes HAP and RAS tenancies in social housing delivery and the Committee does not consider HAP and RAS tenancies to be effective solutions to social housing delivery in terms of value for money,” Deputy Stanley said.
The committee chair also questioned how effective HAP was for tenants, noting that many must top up the payment in order to meet their rental payment.
“The Exchequer continues to fund the scheme to the tune of well over half a billion euro annually but the State at no point acquires the housing units supported by HAP.
“The State would receive rent for a unit within its own social housing stock – the State does not receive a cent back from the scheme.
“The Committee also questions the effectiveness of the scheme as a support for tenants, as many HAP tenants are making top-up payments,” Deputy Stanley said.
Along with the five key issues the committee highlighted as part of its report, it also put forward 15 corresponding recommendations, four of which looked at the HAP and RAS schemes.
“These include that the Department conducts and publishes an assessment of value-for-money from the HAP scheme, including a comparison of the value-for-money obtained from public-private partnerships, and its own build schemes,” Deputy Stanley said.
The committee also questioned the value of money regarding expenditure of €639 million on Public Private Partnerships to delivery of 999 social homes in Dublin, Cork, Galway, Waterford, Clare, Kildare, and Roscommon. Each of those unites cost approximately €640,000.
“There are five further bundles of social housing units to be delivered through this programme, which are projected to see approximately 3,500 more units completed,” Deputy Stanley said.
“If these units were also projected to cost €640,000, this would result in a total cost of €2.88 billion for all seven bundles in total,” he added.
