Belfast Telegraph

Call for answers as Housing Executive's £102m cash chest revealed

The Housing Executive currently has reserves of £102m.
The Housing Executive currently has reserves of £102m.

By David O'Dornan

The Northern Ireland Housing Executive is sitting on cash reserves of £102m - at a time when budgets are stretched across Stormont.

The organisation explained that the money is kept as a contingency for unexpected events such as a bad winter.

It said another reason for its increased coffers is "because of legal challenges by bidders to procurement competitions".

SDLP deputy leader Nichola Mallon has called for a fuller explanation.

The North Belfast MLA said there is a "housing crisis", adding that she knows of many tenants desperate for repairs to their homes.

She said: "The Housing Executive needs to provide a full explanation of the rationale for leaving £102m in reserves, while at the same time telling so many tenants that it cannot carry out badly needed and already long awaited repairs and improvements because it doesn't have the money.

"It is prudent for an organisation to have reserves.

"But given the state of our housing situation people, especially Housing Executive tenants, will want to know why over £100m is being kept in reserves, especially at a time when the Housing Executive is imposing cuts on services?

"They will want to know why at least some of this money is not being used to help them and what is the planned use for this money if it is being set aside so it can be spent next year? This is public money in short supply and in the midst of a housing crisis.

"We need to know now much of this money has been spent defending and settling these legal challenges by bidders?

Housing crisis: Nichola Mallon
Housing crisis: Nichola Mallon

"Why has there been an increase in legal action being taken against the Housing Executive and what is being done to address this?"

Mrs Mallon was also a member of the Communities committee - overseeing the department whose remit covers the Housing Executive - when Stormont was last sitting.

NIHE said it recognised the situation "is having a detrimental impact on our tenants" as well as local construction firms.

A spokesman said: "The reserve provides flexibility to plan and manage the financial implications of large planned schemes which start and finish in different accounting periods.

"It allows us to carry forward and set aside funding to make provision for known future liabilities and commitments as well as providing some contingency for unexpected or difficult-to-predict events, eg a particularly bad winter which would generate higher than normal response maintenance demands.

"The level of money in the reserve is closely monitored and fully disclosed both in monthly finance reports and our annual accounts.

"Since April 1, 2018, the reserve has increased because of legal challenges by bidders to procurement competitions. This has delayed the award of contracts and the implementation of planned maintenance schemes.

"This is having a detrimental impact on our tenants and is preventing us from releasing work to a hard-pressed local construction industry.

"The Housing Executive's stock requires maintenance investment of approximately £31.1bn over the next 10 years and we are facing a significant shortfall in resources over this period.

"The reserve of £102m has increased over the last three years primarily due to legal and contractual issues.

"However, these monies will be used to partially bridge the gap for future programmes of work for our tenants' homes."

A spokesperson for the Department for Communities (DfC) said: "As the NIHE sponsor department, DfC has full visibility of NIHE reserves and the reason for them reaching the level that they have.

"The department is assured that this money will be utilised in helping to address the maintenance requirements of NIHE properties."

The Housing Executive also revealed that it is sitting with £1.1m of stock across its depots.

There are items such as bulbs, pipes, amps, plugs and grates that were purchased more than five years ago, NIHE confirmed.

In August, the Belfast Telegraph revealed that nearly £400,000 of taxpayers' money was squandered by the NIHE on 'ghost gardening' - paying for ground maintenance on land it no longer owned or which had changed use.

A damning report from the Northern Ireland Audit Office revealed that if it were not for whistleblowers, the overpayments would have been at least £1.3m.

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