Housing Executive 'overpaid £18 million' to contractors in five years
Published 10/06/2013 | 13:15
The Housing Executive overpaid an estimated £18 million to four repair contractors over the last five years, it was revealed.
Housing Minister Nelson McCausland branded it a scandal and said an investigation had been launched.
The contractors overpaid were PK Murphy, Bann, Mascott and Dixons, he said.
The claims centre on £172 million worth of work carried out by four firms on around 60,000 homes between January 2008 and the start of this year. Maintenance works included kitchen replacements, double glazing and external improvements.
Mr McCausland told the Assembly: "The scale of what has been uncovered has been a scandal."
An external probe was commissioned by the board of the social housing body after its own internal review identified major issues over how contracts were handled.
Mr McCausland told MLAs: "Let me say that again in case you think you misheard - £18 million in overpayments to four contractors.
"I have been advised by the Housing Executive that the four contractors are PK Murphy, Bann, Mascott and Dixons.
"I am sure you, like me, are astounded at this amount and wonder at the level of incompetence within the Housing Executive that led to this state of affairs."
He said: "Let's not forget this is taxpayers' money that could have been used to build around 200 much-needed social homes."
The minister has warned the Executive had already failed to demonstrate the required response to known shortfalls in contract management and said heads would have rolled had £18 million been overpaid by a private company.
"People need to take responsibility for their actions," he said.
The Executive said it has commenced "appropriate action", including legal proceedings, to recover overpayments, adding contractors would not receive any new orders until the issue was resolved.
It has been heavily criticised in official investigations for the way multi-million pound maintenance contracts have been managed, with the Northern Ireland Audit Office and Stormont's Public Accounts Committee raising serious concerns.
Housing Executive chairman Donald Hoodless said he was briefed when he took office late last year on issues surrounding maintenance contracts by Mr McCausland. He said he then ordered an internal probe.
"The findings are extremely disappointing given the scrutiny that the organisation is already under for its management of response maintenance contracts," he said.
"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 investigation is set to take 13 weeks to complete.
PK Murphy Construction Ltd is a building and public works contractor based in Pomeroy in Mid Ulster. The company was formed in 1986 and its website said it has grown to be a leader in the field of construction, delivering a range of construction and maintenance services, particularly in occupied dwellings in the social housing sector. It employs more than 150 staff.
Bann Ltd is based in Portadown, Co Armagh. The company has installed new windows for the Executive in properties in Portadown.
Mascott Construction Ltd has offices in Belfast and Glasgow. It was formed in 1988 and has a five-year contract with the Executive. Already 900 kitchens have been upgraded and more than 1,000 dwellings had external maintenance carried out, according to its website.
The website said: "Both Mascott Construction and the Northern Ireland Housing Executive have, and continue to act as stated in the framework contract and in a spirit of mutual trust and co-operation."
In an unrelated scheme, it delivered the MAC arts centre in Belfast.
Dixon's Contractors from Dunloy in Co Antrim has been in business since 1979 and described itself as small and family owned. It has 65 employees and more than 150 specialist sub-contractors. The firm has carried out window replacements and kitchen work for the Executive across Co Antrim and worked for housing associations in Bangor, Co Down, Belfast and Derry. Its website said it was working on a large number of schemes for the Executive.