A review by the Department of Public Expenditure and Reform has raised "serious concern" about the value for money provided by social housing units leased by Local Authorities from Approved Housing Bodies (AHBs).

The review, which forms part of the latest tranche of Spending Review papers published today, details how spending in this area has risen by 495% from 2016-2020 but that output in terms of housing units delivered only increased by 230%.

There are 470 registered AHBs in the country which are generally run on a not-for-profit basis to provide social housing.

They account for social housing stock of approximately 30,000 units. Local Authorities manage approximately 130,000 units.

AHBs are regulated by the Approved Housing Bodies Regulatory Authority which only began operation on a phased basis this year. The report notes the authority is not due to be fully operational until next year.

Prior to now, the AHBs were regulated by the Housing Agency.

The review notes that as the AHBs now have such a substantial role in the provision of social housing "appropriate regulation must be considered an important aspect of the relationship between the AHBs and the State".

The review details how AHBs are financed to build social housing through low-interest loans from the State's Housing Finance Agency, other State agencies and other sources of finance.

The units are then leased back to Local Authorities at between 92-95% of current market rents. The AHBs are responsible for maintenance and tenant management costs.

The cost of leasing the units varies from below €600 per month in counties like Donegal, Sligo and Leitrim to over €1,300 in the three Dublin Local Authorities, which reflects prevailing market rents.

The review finds that the cost of the units are "relatively on par" with the cost of direct builds and acquisitions.

However, it points out that ownership remains with the AHBs.

This, the review concludes, "raises cost efficiency and value-for-money concerns, as there may be ongoing costs in the future that are not associated with the likes of direct build/acquisition".

It points out that even though Housing for All commits to more construction of social housing and less leasing, it also commits to construction involving the AHBs which is based on a funding model linked to charging close to market rents back to the Local Authorities.

The review notes that 23% of social housing units nationally from 2016-2020 were delivered under the Social Housing Current Expenditure Programme, formerly known as the Social Housing Leasing Initiative.

However, it accounted for over 50% of the units built in Dublin City.