There has been a “substantial loss” to taxpayers, as a result of the termination of agreements with a number of potential asylum seeker accommodation providers.
Specific figures in relation to the losses are not contained in today’s report from the Comptroller and Auditor General, but there are indications that they could amount to several million euro.
The C&AG says financial settlements to three parties form a “material but undisclosed part” of €35 million in accrued expenses by the Department of Justice last year, in respect of accommodation for international protection applicants.
A further two prospective providers are taking legal action over the termination of agreements by the State.
Chapter 14 of the report examines the cancellation of the pre-contract deals, after the Department decided to curtail the size of the international protection property portfolio and reduce it over time last year.
Prior to this happening, agreements had been made with providers in respect of fifteen properties around the country.
This was “to provide security … for their investments in larger-scale accommodation centres” and to allow the Department to meet its requirements under EU legislation.
The report states that this approach stemmed from feedback from some property owners that they were finding it “difficult to access the credit necessary” to refurbish large buildings to accommodate asylum seekers, as they were viewed as “high risk” by lenders and financial institutions.
The pre-contract agreements are described as representing commitments to significant future expenditure by the Exchequer. The Department of Justice told the C&AG that the potential combined value of the disputed agreements was more than €100 million.
One of the lease agreements proceeded, others lapsed and the remaining ones were terminated.
As a result, five counterparties to the deals took legal action against the Minister for Justice. Mediation resulted in settlements to three of these, with the two others expected to come before the Commercial Court in due course.
The Department has said publication of the details in relation to settlement claims could hamper the State in legal proceedings. It contends that the only way to have avoided the overall costs would been to have proceed with greater expenditure, for services it did not want or need.
The payments, following mediation, were sanctioned by the Department of Public Expenditure, on the basis that they represented a full and final settlement to the potential accommodation providers.
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The agreements had been initially entered into by the Department of Children in 2024 and early 2025, before the formal transfer of responsibility for international protection to the Department of Justice.
The report says the pre-contract agreements represented a move by the State to deliver accommodation on a larger scale.
It is understood the International Protection Procurement Service undertook to use the centres in question for an initial period of two to three years, with optional extensions of up to a further five years in some cases. Providers would be paid “at a specified daily rate per bed”.
The practice of pre-contract agreements has now been discontinued.
The report says the terminated deals led to payments for which “no value has been obtained”.
The total cost of providing international protection accommodation in 2025 was €1.36 billion, an increase of €300 million on the comparable total for previous twelve months.
