The State paid out “substantial” sums in legal settlements – likely to run to several million euro – to potential providers of accommodation for asylum seekers after it cancelled precontract agreements following a change of policy.
The State’s financial watchdog, the Comptroller and Auditor General, maintained that “no value” had been secured from the money paid out which represented “a substantial loss to taxpayers”.
Two other cases are still before the courts.
The report says precontract agreements entered into by the Department of Children in 2024 and early 2025 – with a combined value of more than €100 million – represented commitments to significant future expenditure.
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It maintains this should have required the approval of the Minister for Public Expenditure.
However, the Department of Public Expenditure was not consulted before the precontract agreements were reached and no contingent liability was set out by the Department of Children, which had responsibility at the time for accommodating asylum seekers, in its accounts for 2024.
The precise amounts paid out to the accommodation providers were not disclosed. However, the report says a “material” portion of €35 million in accrued expenses set out in the 2025 appropriation account of the Department of Justice related to the settlement payments.
The settlements with the accommodation providers are set out in a litany of examples of overspending and poor value for money involving Government departments and agencies highlighted in the comptroller’s annual report published on Wednesday.
The report, separately, reveals that €13.5 million in European Union funding originally provided in 2020 for emergency accommodation for asylum seekers was repaid last April following a critical report by the European Court of Auditors. This had found the expenditure to be ineligible due to the lack of supporting documentation.
The chairman of the Dáil Public Accounts Committee, John Brady of Sinn Féin, said the management of contracts relating to international protection accommodation was of particular concern.
“While we need a fair and effective [international protection] system, it must also operate in accordance with proper procurement procedures and robust financial controls.”
He said while the State had already incurred significant costs arising from the cancellation of precontract agreements with the accommodation providers, the full financial exposure remained unclear.
The report says in March 2024 the Government approved a strategy which aimed to reduce the State’s reliance on commercial providers for accommodating those seeking international protection.
It says the Department of Children entered into precontract agreements with potential accommodation providers in respect of 15 properties.
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The Department of Justice, which now has responsibility in this area, told the comptroller the purpose of such agreements was to provide security for potential providers of temporary emergency accommodation for their investments in larger-scale accommodation centres.
The providers had maintained they were finding it difficult to secure credit to refurbish large properties.
After taking over responsibility from the Department of Children in mid-2025, the Department of Justice proceeded with one of the precontract agreements while three others were considered to have lapsed. The department then decided to terminate the remaining agreements.
Five accommodation providers who had signed precontract agreements subsequently sued the Minister for Justice.
“The department has stated that the potential combined value of the related agreements was more than €100 million. Following mediation, the Department of Justice made settlement payments in three of the legal cases. Plaintiff costs in those cases remain outstanding for agreement and payment. The settlement amounts are significantly less than the estimated contract values. Settlement was not reached through mediation in the other two cases. The Department of Justice expects that those cases will proceed to hearing by the Commercial Court in due course.
“The Department of Justice’s view is that costs incurred could only have been avoided if the department had proceeded with greater expenditure for services that the department did not want or need.”
The Department of Justice told the comptroller that the use of such precontract agreements “is now entirely discontinued”.
