Northern Ireland

McCausland 'astounded' at Housing Executive's £18m overspend

The housing minister has said it is a "scandal" that the Northern Ireland Housing Executive (NIHE) has overpaid £18m on contracts for planned maintenance of homes.

Nelson McCausland added it was not clear if "incredible incompetence" or "wilful corruption" was to blame.

He said he was "astounded" at the amount and the level of incompetence within the organisation.

NIHE has commissioned an independent external review into the overspending.

Mr McCausland, speaking in the Northern Ireland Assembly on Monday, added: "This is taxpayers' money that could have been used to build around 200 much-needed social homes."

The Housing Executive review will investigate how the organisation has been dealing with planned maintenance contracts over the last five years, and may take legal action to recover overpayments.

NIHE's planned maintenance contracts cover kitchen replacements, double glazing and external improvement in around 60,000 homes.

The total expenditure is in the region of £172m.

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Media captionNelson McCausland is 'astounded' at the Housing Executive's £18m overspend

Housing Executive chairman Donald Hoodless said: "When I took up office in November 2012 and was briefed on the Housing Executive's management of planned maintenance contracts by the minister, I requested in December a comprehensive investigation from the chief executive into this matter.

"The board considered its findings at the May meeting. The findings are extremely disappointing given the scrutiny that the organisation is already under for its management of response maintenance contracts.

"The board has now authorised an external independent review of the organisation's handling of planned maintenance contracts which is to be carried out immediately by a consultant.

"Specifically it wishes to review how this situation arose, the reliability of the information on overcharging and the actions taken to recover the overpayments.

"Until this issue is satisfactorily resolved, the four planned maintenance contractors will not receive any new contracts from the Housing Executive."

Sinn Féin housing spokesperson, Fra McCann MLA, said answers need to be provided urgently.

He added: "Any investigation needs to include the minister's department, who are the parent body of the Housing Executive, and needs to be widened to find out if these problems should have been picked up, not just by those in charge at the Housing Executive but also by the Department of Social Development."

Ulster Unionist Party MLA Michael Copeland said: "The fact that four businesses could allegedly be paid £18m more than what on paper they should have received, beggars belief. This is public money, it should never have been 'overpaid' in the first place and even then it should not have taken a forensic investigation to highlight it."

Mark H Durkan, SDLP spokesperson on social development, said: "We need to know exactly how this happened, when it happened and who was involved. We also need details as to when this money will be fully returned to the public purse where it rightly belongs."

The review is scheduled to take 13 weeks to complete.

The contracts in question ran from January 2008 to January 2013 and included four contractors, organised through five contracts, one for each of the Housing Executive's administrative areas.

The four contractors identified in the overspend findings - Bann Ltd, Dixon's Contractors, Mascott Construction Ltd and PK Murphy Construction Ltd - have issued a joint statement to say they were "upset and dismayed by the allegations that have been made".

The firms added that they were "particularly offended by the implications of 'wilful corruption' and 'overcharging' on the part of our companies or any of our staff".

"We shall be mounting a strenuous challenge to this matter, as such outrageous allegations are very damaging to our reputation and our businesses.

"Having sought legal advice we have now instructed solicitors to pursue this matter as vigorously as possible," the statement added.

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