A breakdown in communication between Dublin City University (DCU) and the Department of Higher Education has resulted in €4.4 million in taxpayers’ money being lost.
DCU has written off €4.38 million in professional fees for a planned student accommodation block, despite the project never being completed.
Members of the Dáil’s Public Accounts Committee (PAC) described the situation as “absolutely scandalous”, warning that the write-off raised serious questions about the entire project appraisal process.
The committee was told that DCU redesigned plans for a 1,235-bed accommodation block after the Department of Higher Education declined to fund the full development. The original proposal was to be jointly financed by the university and the department, but government funding was made available for just 400 beds.
The scheme remained financially unviable even after being reduced to 400 beds. It was ultimately abandoned when projected annual rents reached €11,500 per student, well above the target price of €6,500.
It is understood that DCU’s development team mistakenly believed the Department of Higher Education would agree to co-fund the project after construction, allowing rents to be subsidised.
A Government source said the department instead decided to direct funding towards another student accommodation project at Trinity College.
PAC chairman John Brady said the failure to secure rent subsidies was “the straw that broke the camel’s back” in the relationship between DCU and the department.
The Sinn Féin TD told the committee: “The information I have is that DCU were led up the garden path by the department and the co-funding [arrangements] of this particular project.
“The department came back and said, ‘You need to scale back – this needs to be 400 [beds]’. That pushed up the costs.”
Departmental co-funding would have allowed rents to be subsidised to an estimated €6,500 per student for the academic year. But once the building was redesigned, construction inflation was said to have absorbed any possible savings, pushing the projected unsubsidised rent to approximately €11,500.
DCU subsequently abandoned the scheme and recorded a €4.4 million write-off for professional services, including design, surveying and architectural work, in its latest financial statements.
Dublin City University (DCU) ultimately decided to shelve the project
Labour TD Eoghan Kenny said: “Ultimately, this project is dead in the water. I cannot see how this project will ever proceed.
“It is the taxpayer, once again, having to take up the charge for ultimately what is a failure from the department and the college itself, while many young adults are trying to avail of student accommodation in Dublin.”
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DCU secured planning permission for the site in 2019 and has spent the years since exploring ways to finance the development, including seeking support from the European Investment Bank and the Housing Finance Agency.
The Covid pandemic disrupted construction, while inflation driven by the war in Ukraine added to costs. Government grant funding was eventually approved in 2023 for 405 beds.
However, continued inflation left the university unable to find a provider capable of completing the full development within the agreed budget.
DCU formally decided to shelve the project in October last year.
The National Student Accommodation Strategy, published this year, estimates that Ireland is short of 15,000 student beds. The shortfall is expected to grow as new university places are introduced, forcing students to compete each year for secure accommodation close to their campuses.
The Oireachtas has previously heard of students sleeping in cars or couch-surfing as a result.
In its annual financial accounts, DCU detailed that loan funding, drawn down from the Ireland Strategic Investment Fund, was secured against its delivery of existing student accommodation for the project. The university has previously constructed purpose-built student housing on all three of its campuses in Dublin: on its main campus in Glasnevin, at the St Patrick’s School of Teaching Campus, and at its All Hallows campus.
DCU stated that on a ‘prudent basis’, it was writing off €4.38million – which includes VAT – spent on approved plans associated with its new on-campus student accommodation project.
‘Due to construction inflation, the project is awaiting a funding solution that can deliver affordable accommodation for students,’ the university’s statement reads.
It detailed that the write-off ‘may be reversible’ should the project proceed to delivery and that DCU has planning permissions in place for the development until 2029. However, Fianna Fáil TD Séamus McGrath told the PAC yesterday he cannot see the project going ahead.
‘This calls into question the whole project appraisal process,’ he said. ‘To go so far down the road without anyone calling for a halt, and to spend €4.38million, only to be stopped at that point… Any suggestion that some of that could be recovered is trying to get a soft landing here.’
DCU’s financial statement details that all spending associated with professional fees had been authorised ahead of time.
A DCU spokeswoman said the university continues to work with all stakeholders, including the Department of Further and Higher Education, to identify and secure a funding solution.
Mr Brady said: ‘There seem to be huge failures here, on a national level, which have led to a student accommodation crisis and we’re left with a writing off of €4.38million. It is absolutely scandalous, given every year the accommodation crisis that faces students.’ A spokesman for the Department of Higher Education said that costs of a proposed tender ‘raised value-for-money concerns and, consequently, a decision was taken not to progress the project’.