The State is expected to spend €531 million on services for homeless families and individuals this year. The vast bulk of it, €361 million, will be spent on the provision of emergency accommodation and most of that will go to for-profit businesses such as B&Bs and hotels. They will receive around €270 million from various local authorities to provide emergency beds, if last year’s figures are any guide.
With about 16,000 people categorised as homeless, and no sign of any easing of the housing shortage, it is no surprise that that the Government is reported to be mulling State provision of homeless accommodation; an announcement to that effect is predicted when it launches the revised Housing For All strategy due next month.
If this change in policy does come to pass, it will be a welcome step, insofar as it will see the State take direct responsibility for a mess which is largely of its own making. The current situation represents an absence of policy rather than a failure of policy, according to voluntary bodies that provide the balance of emergency accommodation, such as Focus Ireland.
Before 2015, the provision of emergency accommodation – albeit on a much smaller scale, as the number of homeless people was much lower – was split pretty evenly between NGOs and private-sector providers. But as the number of homeless increased, the “overflow” accommodation being provided by the private sector was absorbed into the system – and now it dominates it.
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Most NGOs were either unable or unwilling to expand to meet capacity as homelessness increased, some wisely fearing for their own viability, given their funding model and its reliance on voluntary contributions. They also had a preference for putting their efforts into trying to provide long-term solutions for homelessness, such as the Housing First approach.
The only NGO that did scale up in any significant way to meet the growing numbers of homeless was the Peter McVerry Trust. It received €164.3 million in funding from the State between 2018 and 2022 and matched it with €72.6 million in donations. It acquired a portfolio of properties for its housing and homeless services that were valued at €162.33 million at the end of 2022, making it the largest provider of accommodation for the homeless.
Good deeds rarely go unpunished and the McVerry Trust is no exception. It came close to collapse last year, and required a €15 million bailout from the State amid claims of mismanagement and poor governance. A criminal investigation is under way but the simplest and most benign explanation may be that it overreached.
The trust is now in the process of transferring 54 properties to the State to repay the bailout. Its long-term viability is unclear, and last year it told the Government that it needed 100 per cent funding.
McVerry Trust’s almost-demise is not going to encourage any other NGOs to take on the financial and other risks involved in substantially increasing the amount of emergency accommodation they provide. If anything, it underlies the correctness of the decision to focus on longer-term solutions.
The net effect is to increase the State’s reliance on private-sector providers at ever increasing prices. According to Focus Ireland, the annual cost of providing emergency accommodation to a household has risen from just over €14,000 in 2014 to €42,000 last year.
A decision to move towards directly providing accommodation for homeless people would be making a virtue out of a necessity. The system is broken. The car crash that is the McVerry Trust indicates that the limit of what the voluntary sector can presently provide – in terms of emergency accommodation – has been reached, leaving the State at the mercy of private-sector accommodation providers. A bill of €270 million a year and rising is clearly not sustainable.
The question of value for money is not a trivial one – as indicated by the recent Comptroller and Auditor General report on accommodation for international protection applicants. Unsurprisingly, the Government also plans to move towards the direct provision of accommodation of IP applicants.
In the view of NGOs such as Focus Ireland, the real drawback of the provision of emergency accommodation for the homeless by the private sector is that it does not provide a route out of homelessness. It does not provide the supports needed to allow a homeless person to address the issues that put them on the street in the first place. Nor does it give them access to any sort of programme such as Housing First aimed at getting them into a sustainable housing situation.
Any commercial provider of a homeless accommodation that offered these sorts of supports would be in the business of putting themselves out of business.
