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Call for Tenders: Evaluating the Classification of Approved Housing Bodies (AHBs) in Ireland
12th Nov, 2024

Following the recommendation of Eurostat in 2018, the Central Statistics Office (CSO) made the decision to reclassify a number of AHBs from the category of Non-Profit Institutions Serving Households (NPISH) to the local government sub-sector. This included all of the largest tier-3 AHBs.

Within the sector, this decision has been considered a potential threat to the ability of AHBs to continue delivering social and affordable housing at scale. AHB expenditure now appears on the State balance sheet meaning it falls under the remit of EU fiscal rules, specifically the EU Stability and Growth Pact.

A significant body of work has been carried out by individual AHBs, the Housing Alliance and the Irish Council for Social Housing (ICSH) on this issue. Members of the Housing Alliance and ICSH also sat on an Interdepartmental Working Group comprised of representatives from a range of government departments.

To date, the tangible impact of the reclassification of the AHB sector appears to have been minimal. During the Covid-19 pandemic, to allow for urgently required increased spending on health and social welfare, EU fiscal rules were effectively suspended under the ‘general escape clause’. However, in March 2023 it was confirmed that the general escape clause would be deactivated by the end of the year.

Following this, in early 2024, EU fiscal rules have come under review. While minor tweaks have been made, the core rules will remain the same. This means ‘a risk-based and differentiated technical trajectory expressed in terms of multiannual net expenditure to member states where government debt exceeds the 60% of gross domestic product (GDP) reference value or where the government deficit exceeds the 3% of GDP reference value.’

With AHB spending on balance sheet, activity in the sector contributes towards the national debt and is counted when assessing compliance with EU fiscal rules.

Most recently, the report of the Housing Commission, published in May 2024, referenced the classification issue, stating, ‘The Government currently spends more on housing than any other European country relative to GDP (GNI* for Ireland). This is partly due to the on-balance sheet nature of the Approved Housing Body (AHB) sector. Given vulnerabilities and spending pressures in the public finances, there will be constraints to increasing this to any greater significant extent’.

In light of this renewed focus on how AHBs are classified in Ireland, it is important to ascertain how the sector should proceed in order to ensure AHBs can continue to deliver high-quality social and affordable housing and excellent services to tenants/residents.

Click here to read the full tender document, or visit cluid.ie/wp-content/uploads/2024/11/HA-Reclassification-Research-Tender-Updated-Logos.pdf

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