Watchdog raps housing official over Belfast site deal
A senior Housing Executive official lobbied for a policy change which would have benefited his son's employer by millions of pounds, a report has said.
Colm McCaughley is criticised for poor judgment and failing to identify a conflict of interest over the purchase of a site in Belfast.
The Nelson Street sale was one of several land dealings examined by Stormont's spending watchdog.
The Public Accounts Committee concluded there had been "serious flaws" in the Northern Ireland Housing Executive's (NIHE) dealings with private developers.
In a separate case, the Housing Executive disregarded advice by selling a listed farmhouse separate from its surrounding land.
The "catastrophic decision" over Millmount House could have cost the public purse £60m.
PAC chair Michaela Boyle said: "The committee found that the organisational culture in the NIHE was seriously flawed. We have been left with the impression that some staff in NIHE felt they did not need to operate within the Housing Executive's governance and control systems.
"Advice and guidance was simply ignored, with serious consequences for NIHE."
Today's report is particularly critical of the Nelson Street sale.
NIHE had backed plans for a public housing project at the site.
The land had been acquired by Big Picture Developments, which employed Mr McCaughley's son, in July 2006, and was zoned both as a development opportunity site and for social housing.
In early 2008, Big Picture submitted a planning application for a development including office and commercial space and 238 private apartments. It made no provision for social housing, and NIHE objected.
In February 2009 Mr McCaughley, NIHE director of housing and regeneration, emailed NIHE's Belfast area office to say the objection was unreasonable.
The committee said it was concerned to learn Mr McCaughley had a conflict of interest.
"A close family relative was a financial consultant who worked for a property company which invested in Northern Ireland through Big Picture Developments," it said.
Mr McCaughley had declared this in the NIHE register of interests. He told the committee the relative was his son.
In April 2009 a member of Mr McCaughley's staff wrote to the NIHE legal department asking it to consider the objection.
The following January, after intervention by Mr McCaughley, a letter was sent by a Housing and Regeneration Division official to the Planning Service.
This indicated that NIHE was withdrawing its request for social housing on the site.
The committee heard Mr McCaughley was "articulating an argument which reflected the position of the developer" and not that of NIHE. When it became clear that this letter had been sent, NIHE wrote to Planning Service to rescind the original letter and reaffirm NIHE's support for social housing at Nelson Street.
Mr McCaughley said his intervention was not just about the Nelson Street site but rather about a zoning policy which impacted upon "100 sites" - it just so happened that Nelson Street was the first site in which the legality of the zoning policy could be challenged.
Social Development Minister Lord Morrow said: "Improvements have already been made and I will continue to ensure that lessons are learnt from this report."