Three firms accused of £18m overpayment to repay £700k
- 5 August 2014
- From the section Northern Ireland
Three firms that had been accused of receiving overpayments of £18m from the Northern Ireland Housing Executive have settled the matter for just £670,000.
The social housing body accepted that a fourth contractor was underpaid and will receive compensation.
The building contractors had been engaged to carry out planned maintenance on homes.
The £18m allegation was made by Stormont housing minister Nelson McCausland last year.
He told the assembly the overpayments were a "scandal", adding that it was not clear if "incredible incompetence" or "wilful corruption" was to blame.
No evidence of fraud
A later report into Housing Executive contractors found no evidence of fraud or corruption.
It did identify "various shortcomings" on contract management within the public body.
Mr McCausland said the £18m figure was provided to him by the Housing Executive chairman Donald Hoodless.
Mr Hoodless said he accepted that the estimate was an extrapolation based on "a very small sample".
He said the Housing Executive had always been clear about the limitation of the estimate.
The four companies involved, PK Murphy, Bann, Mascott and Dixons had always denied the claim that they were overpaid.
They said they were actually owed money.
PK Murphy, Bann, and Mascott will make repayments, while it is accepted by the Housing Executive that Dixons was underpaid and will receive compensation.
Calls for Mr McCausland to apologise for his claim have been made by the Ulster Unionist Party, the SDLP, the Alliance Party and TUV.
Sinn Féin assembly member Fra McCann said Mr McCausland "should now consider his position".
"This issue had led to a delay in carrying out vital repair work such as refitting kitchens and window replacement schemes at Housing Executive properties across the north," he said.
Asked if he felt he should apologise, Mr McCausland told BBC Radio Ulster: "Responsibility for these things lies primarily with the Housing Executive - they have their own board, their own chief executive, their own chairman.
"My job is to monitor what they do and to make sure that they are operating properly."
Mr McCausland said he believed the Housing Executive had already apologised to Dixons for the underpayment.
"I simply relayed at the time what was given to me by the Housing Executive and that was incorrect," he said.
In a statement on Tuesday the Housing Executive said weaknesses in its contract management systems had also led it to write-off £2m.
This relates to £12m of payments made to contractors for work that was not properly verified and costed at the time it was undertaken.
It estimates that the cost of that work was around £10m.
The Housing Executive said: "In order to satisfy the public sector accounting requirements we have received approval from the Department for Social Development and the Department of Finance write off £2.076m, being the difference between the payment we cannot properly substantiate and our estimate of the contractors entitlement."
In a statement, Mr McCausland welcomed the resolution of the matter and said procedures at the Housing Executive had now been tightened up.
"These new contracts and the associated enhanced contract management arrangements now put in place by the Housing Executive should ensure that the past failings in this area will not re-occur."