Underspend 'a fundamental problem'
Published 17/10/2013 | 15:01
Several hundred million pounds were lost to the Northern Ireland budget because of underspending by departments, it has been revealed.
The massive sums were returned to the Treasury some years ago but since then, a series of measures has been put in place to improve how Executive bodies spend their budgets.
The disclosure was made by the head of the Department for Regional Development (DRD) during a Stormont committee evidence session investigating the awarding of contracts for road signs.
Permanent secretary Richard Pengelly said: "We had a fundamental problem about underspend, money which was not spent and went back to Treasury."
He added, there were "several hundred million pounds of money which could and should have been spent here but was not".
Mr Pengelly held a senior role at the Department for Finance and Personnel in the past.
His comments were made in the context of events dating back to the early 2000s.
Senior current and former officials at the DRD appeared before Stormont's public spending watchdog, the Public Accounts Committee this week.
Mr Pengelly was discussing Roads Service spending on signs long before they were needed and pointed out the importance of using budgets in time in case they had to be returned to London.
DRD officials also said a roads project could be disrupted if warning signs were not available on time and pointed to delays in contractors supplying orders.
But DUP MLA Trevor Clarke said: "If I get something for my house I will not buy it two years in advance."
The Audit Office has heavily criticised the DRD for the way it investigated complaints made by a whistleblower.
It said an investigation into the awarding of the signs contract was not well planned and the department did not forensically examine complaints.
The department has challenged some of the evidence surrounding the case.
The report was into complaints made by Co Down contractor David Connolly, who alleged favouritism after he lost out in a bid for work.
Mr Connolly is former director of Signs and Equipment Ltd, which failed to win a government contract for road signs.
He alleged Roads Service changed tender criteria for the award of road signage contracts (then worth up to £900,000 a year) to ensure its preferred supplier obtained the lion's share of the work.
The complainant also claimed Roads Service colluded with other government agencies to delay the award of the contract until another contractor met eligibility criteria.
He accused the government business unit of wasting up to £2 million over eight years by paying above the market rate and said some officials were too close to the firm which won the contract.