Northern Ireland Water fiasco: four face censure
Four employees of Northern Ireland Water are facing disciplinary action over the contracts debacle that led to a purge of the company's boardroom, Assembly members have been told.
The failure of NI Water to ensure competition and value for money in over 70 contract awards was repeatedly lambasted at a Stormont hearing yesterday.
Senior civil servant Paul Priestly described the details as “shocking, indefensible and unacceptable” in his evidence to the cross-party Public Accounts Committee (PAC).
Mr Priestly also told the hearing: “We've been let down by those charged with the stewardship of Northern Ireland Water.”
Four directors of the publicly-owned water company — including its chairman Chris Mellor — were dismissed from their boardroom posts in March.
Mr Priestly, permanent secretary of the Department for Regional Development — NIW's parent body — informed MLAs that disciplinary action is ongoing against four employees.
Audit reviews found 73 cases where NI Water contracts were awarded without competitive processes, leaving the company unable to demonstrate value for money for taxpayers. The contracts had a total value of £28.4m.
PAC Chairman Paul Maskey said the failings were “absolutely staggering”, adding: “Since our committee was established, I don't think we've dealt with a more serious case of complete disregard for public sector ethics.”
Challenged about his department's role, Mr Priestly said “swift action” was taken when he was alerted to the contracts situation by new NIW chief executive Laurence MacKenzie.
Mr Priestly also insisted that his department was not responsible for the day-to-day operations and management of the water company.
He further stated: “I'm not going to hide my disappointment at the events that have taken place.”
Mr Priestly denied that there had been a failure by the department and commented: “I think we were let down by the board and the executives in Northern Ireland Water who signed off assurance statements assuring us that there were no issues in these areas.”
In relation to contract extensions with consultancy firms, the permanent secretary said: “It's evidence of lazy and bad practice. It's about allowing a contractor to get into the lifeblood of an organisation.”
NI Water was established in 2007 as a GoCo (government-owned company) in a direct rule reform package that was also supposed to include water charges. However, charges have been deferred under devolution, leaving it dependent on public funding.
SDLP committee member Patsy McGlone commented during the hearing: “You would think the department had absolutely no control over a GoCo it was pumping millions into.”
Sinn Fein MLA Mitchel McLaughlin suggested to Mr Priestly that the GoCo “business model” had been a “disaster and a complete failure”.
The senior civil servant did not accept this description and pointed to the company's achievements in investing in service improvements.
He also said the whole organisation should not be damned over the contracts issue.
The PAC's vice chair, Ulster Unionist MLA Roy Beggs, paid tribute to NIW head Laurence MacKenzie for uncovering the contractual practices.
Mr MacKenzie said he became chief executive on July 27 and his “antennae” went up over the problem as early as August 10.
Three PAC members — Mr McGlone, his SDLP colleague John Dallat and independent MLA Dawn Purvis — questioned the independence of the outside team brought in to examine the contractual practices earlier this year.
It was this team's report that led to the four boardroom dismissals by Regional Development Minister Conor Murphy in March.
Mr Dallat used the phrase “show trial”, while Ms Purvis suggested the department was determined to side with the chief executive against the board members to avoid his resignation.
This was rejected by Mr Priestly, who defended the establishment and make-up of the three-person review team.