Recovery sought for £9m of social housing grants
Almost £9m given to two housing associations for social housing projects must be urgently recovered because of a lack of progress, the Audit Office has said.
The grants were made by the Department for Social Development (DSD) under the Advance Land Purchase (ALP) scheme.
It allows grants to be made to housing associations for them to purchase a site in an area which has a social housing need, but which may not yet have planning permission.
The grant is given on the understanding that DSD can seek full recovery if permission is not granted, or progress has not been made in building houses on the land within three years.
In two schemes, DSD said it intends to recover the money because of a lack of progress.
One is a site purchased by Helm Housing in Great George's Street, Belfast, which was supported by an £8.1m grant under the ALP scheme.
The Audit Office previously raised concerns over the purchase of the site. When Helm bought it in 2007 for £9.75m, a third party purchased the site for £6.5m from the vendor on the same day, before immediately selling it on to Helm. DSD could not obtain an explanation for this.
It has now emerged that planning permission will not materialise until 2018 at the earliest. Consequently, DSD has indicated it may begin recovery procedures for the £8.1m grant. The other scheme was planned by Trinity Housing Association for a development in Crossgar.
In this scheme DSD awarded an ALP grant of £835,000 to the association in February 2008 to purchase the site, on the basis that 12 social housing units would be developed.
In the intervening period, as the association pursued unsuccessful planning approvals to develop the site, the proposal changed from a 12-unit scheme to a three-unit scheme and currently, to a single detached bungalow.
DSD has now indicated that it is minded to begin recovery procedures for the ALP grant of £835,000, although the association has suggested it is likely to take legal action to prevent recovery.
DSD said it was satisfied the two outstanding grants to Helm and Trinity Housing Associations are unique and exceptional and that potential recovery action has been initiated at an appropriate time by the Housing Executive.