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McCausland briefs Assembly on Housing Executive’s contract management

Housing Minister Nelson McCausland has updated the Assembly on the Northern Ireland Housing Executive’s management of maintenance contracts and evidence of significant overcharging and incompetence in financial management.
Monday, 10 June 2013

The Minister told the Assembly that one year on from addressing Assembly colleagues in relation to his concerns regarding the Housing Executive’s management of response maintenance contracts, his concerns in relation to planned maintenance had also now been justified.

Minister McCausland told the Assembly: “On taking up my post I had expressed my significant concerns about the issues surrounding the Housing Executive’s management of contracts and I asked for a forensic investigation to be carried out. The findings and the evidence in the report clearly demonstrated to me that there were considerable issues and shortcomings in the Housing Executive’s management of response maintenance contracts and that tenants are not getting the services that are expected or being paid for by the tax payer.

“Last year, I advised that I believed that the Housing Executive had failed to address these matters with the necessary pace and urgency that anyone would rightly expect. I then took the unusual step of introducing special accountability measures to significantly enhance the current oversight arrangements between my Department and the Housing Executive.

“I also advised then that I had to assume that the types of problems evident in the management of response maintenance contracts could also be evident in the way the Housing Executive manage their other contracts.

“I can assure you now that it gives me no pleasure to advise you that once again I was in fact correct in my assumptions. What the new Chairman has discovered in regard to planned maintenance is of such a scale that, by comparison, the issues of response maintenance pale into insignificance.

“The Housing Executive’s statement this morning in relation to the Housing Executive’s level of overpayments to planned maintenance contractors reveals it is estimated to be some £18million. I am sure you, like me, are astounded at this amount and wonder at the level of incompetence that lead to this state of affairs. Let’s not forget this is taxpayers’ money that could have been used to build around 200 much needed social homes.”

The Minister questioned how such overcharging could occur and if there could be problems evident in any further area of contract management such as heating or grounds maintenance. He also reminded the Assembly of assurances given to him by the former Chairman last year in relation to contract monitoring arrangements and the progress that had been achieved in dealing with contract issues.

The Minister continued: “Last year, I also advised that I had major concerns about the culture within the organisation and the level of aspiration within the Housing Executive to deliver a quality service to tenants regardless of cost and contracts. For me this is clearly still the position in that organisation.

“The recent PAC report on 20 March records that the Committee was shocked at the attempts by management to suppress internal audit reports and to exert pressure to have audit opinions watered down. They referred to a culture of stifling any form of criticism - they called it “institutional resistance” – a phrase I have to agree with.

“PAC advised that a key attribute of a mature and open organisation is that where mistakes are made, these are recognised and improvements made as a result. That did not happen in the Housing Executive.”

Moving on to what action had been taken, the Minister highlighted that last year he had introduced special measures including a monthly accountability meeting between his Permanent Secretary and the Housing Executive’s Chief Executive where the position on these and other key issues is reported.

“My Permanent Secretary has already instigated a further governance review by my Department’s Head of Internal Audit to assess the outcome of the implementation of the recommendations of the Housing Executive Governance Review in 2010, the Special Accountability Measures and the ASM recommendations. This will also look at the lessons learned by the Housing Executive in respect of the management of response maintenance and the extent to which these have been applied to the management of planned maintenance contracts. A report is expected later in the summer.

“My officials have also been reviewing the oversight arrangements in place and my Permanent Secretary has also written to the Housing Executive Chairman to advise him of additional actions to be put in place.

He continued: “I have appointed a new Chairman Donald Hoodless who is determined to put in place clear governance and assurance systems to tackle the issues needed to bring about organisational change to ensure that appropriate services are delivered to tenants, along with value for public money. That is what my priority has always been. He has already demonstrated to me that he has the required leadership for the Housing Executive Board and I am fully supportive of the actions he has taken to date.

“In view of the continuing accountability issues, I and my Permanent Secretary consider that the time is ripe to re-think the whole process of obtaining assurance on contract management and other landlord functions.”

He concluded that moving forward, an inspection regime would be introduced: “The position that the Housing Executive finds itself in now, in relation to its management of contracts, is totally indefensible and this will not be tolerated any further. Change must happen and happen quickly and correctly.

“I will support the Chairman in the work ahead but this is a major challenge to the Board to show the required leadership, drive and determination to deal with these issues and begin to effect change now.”

Notes to editors:

  1. Read the statement in full.
  2. All media enquiries to DSD Information Office on 02890829494. Out of office hours please contact the Duty Press Officer via pager number 07699715440 and your call will be returned.