A new grant scheme for homes affected by defective blocks could end up costing €3.65 billion if inflation runs consistently high, Cabinet Ministers have been privately warned.
According to today’s Irish Times, the enhanced scheme was originally set to cost €2.2 billion when it was agreed by Cabinet last November, but this has now risen to €2.7 billion. Ministers were presented yesterday with three scenarios of inflation which could mean the cost balloons from €2.7 billion to €3.65 billion, meaning that high inflation could add up to €1.5 billion on to the final taxpayer bill in the worst-case scenario.
The meeting also heard that there is no certainty over the final number of homes affected but that it is possible the problem will extend beyond Donegal, Mayo, Clare, Limerick, Sligo and Tipperary. The meeting was told that because it could take years for the damage to manifest, it is not possible to know the final cost to the exchequer yet.
The Department of Housing also plans to announce free counselling for affected homeowners in Mayo and Donegal.