Another costly failure?

The Irish state’s ‘bad bank’, NAMA, has only spent a little over one third of the €4.5bn which it had committed to new home building in 2015, according to figures released over the weekend.

In October 2015 the then Minister for Finance Michael Noonan announced in his Budget speech that NAMA would use €4.5bn in funding to deliver 20,000 homes by the end of 2020. It was to support 30,000 house-building and ancillary jobs.

However, the Business Post has now reported that NAMA has spent only €1.7bn of the funding and delivered 11,700 homes, of which 2,000 were built on NAMA-owned land before the October 2015 speech.

NAMA is seeking to include an additional 5,100 homes in its figures on the basis that the body funded them indirectly through contributions to planning permission, legal costs, holding costs, or enabling works but would not provide the Business Post with how much these costs actually came to.

The response of the bad bank to the Business Post was to say that the funding was essentially a back-up if developers and receivers who owned the sites could not get their own finance and that “It did not represent a commitment by NAMA to directly fund all aspects of the construction and delivery of 20,000 units”.