Belfast Telegraph

Thursday 31 July 2014

Saga that drove a wedge between officials and minister

The storm clouds which have been gathering over the Red Sky saga are expected to darken as details of a high-level investigation into Housing Executive contracts are finally revealed.

A statement from Social Development Minister Nelson McCausland is set to turn the spotlight on a series of alarming failings and oversights in how taxpayers’ money was used.

Red Sky employed around 400 people at one stage and carried out maintenance work on Housing Executive properties across Belfast. But its £7m-a-year contract was cancelled in April 2011 amid allegations of overcharging and poor work.

An investigation into the east Belfast firm had previously unearthed evidence of work which was either sub-standard or not done at all, including cases where jobs were billed for — and paid by the Housing Executive — twice.

Red Sky emphatically denied carrying out poor work or any financial irregularities. It later admitted charging for work on two apartment blocks which no longer existed, but insisted it was “a minor error”.

At the time, the Housing Executive said it was terminating its contract after an inquiry. Days later, Red Sky went into voluntary administration. A reshuffle following the May 2011 Assembly elections saw Mr McCausland take over as DSD minister.

Mr McCausland attempted to stop the Housing Executive ending its contract. He asked for the deal to be temporarily extended until a new system for awarding contracts could be introduced.

He also confirmed he had ordered a “forensic examination” into all contracts awarded by the Housing Executive.

Mr McCausland’s predecessor, Alex Attwood, waded into the row by insisting the move to axe Red Sky was taken after a “fully independent and forensic examination”.

On July 6, the Housing Executive announced it was sticking with its decision to end Red Sky’s contract on July 14.

The following day Mr McCausland confirmed it would end as planned. He accused the Housing Executive of being aggressive, adding that a letter he had received from its chairman Brian Rowntree sounded like “a declaration of war”.

By the autumn, chartered accountancy firm ASM Howarth had begun the audit requested by Mr McCausland. Its full findings were finally passed to the minister on Friday. Earlier in the week he had briefed the Assembly that the audit’s findings, based on initial discussions, were “alarming”.

Then the saga took another twist with the resignation of Mr Rowntree on the day Mr McCausland got the audit’s findings.

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