The board of the Northern Ireland Housing Executive has commissioned an external independent review into how the organisation has been dealing with planned maintenance contracts over the last five years following evidence of substantial overcharging.
The chairman of the Housing Executive has advised social development minister Nelson McCausland that an internal investigation had revealed that an estimated £18m has been overpaid to planned maintenance contractors.
The Housing Executive has begun legal action to recover overpayments.
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.
"This review will provide assurance to the Board, the Minister and local representatives that public money is being used properly and that tenants are getting a quality housing service."
The Board has commissioned an independent consultant to conduct this review which is scheduled to take 13 weeks to complete.
The Housing Executive’s planned maintenance contracts cover kitchen replacements, double glazing and external improvement in around 60,000 homes. The contracts have run from January 2008 – January 2013 and include four contractors, organised through five contracts, one for each of the Housing Executive’s administrative areas. The total expenditure is in the region of £172m.
The four contractors are Bann Ltd, Dixon's Contractors, Mascott Construction Ltd and PK Murphy Construction Ltd. Each issued a statement denying any wrong-doing on their part. Mascott Construction said: “Mascott Construction are upset and dismayed by the allegations that have been made in relation to ongoing works with the NIHE. We are particularly offended by the implications of 'willful corruption' and 'overcharging' on the part of our company 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. All ongoing works currently on sites within the southeast region will not be affected.”