Committee finds serious flaws in Housing Executive's dealings with private developers

Session: Session currently unavailable

Date: 16 March 2016

Reference: PAC 06/15/16

The Public Accounts Committee today has published its report into the Governance of Land and Property in the Northern Ireland Housing Executive (NIHE). The Report found serious failings in NIHE's corporate governance regime in relation to a number of individual land disposals between 2004 and 2010.

The Committee found serious weaknesses in the Department's oversight of the Housing Executive; flaws in NIHE's corporate governance structures; a breakdown of NIHE's internal controls linked to land and property dealings with private developers prior to 2010 and a mismanagement of a serious conflict of interest by the then Director of Housing and Regeneration.

Speaking at the launch of the report, Chairperson Michaela Boyle MLA 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."

The Committee heard how, in early February 2010, three NIHE Directors highlighted concerns to the then Chief Executive about the involvement of other senior NIHE officials in a planning application relating to land owned by a private developer at Nelson Street in Belfast.

The NIHE told the Committee that its investigators referred five separate cases to the PSNI for further investigation. The PSNI subsequently referred two cases (Nelson Street and Victoria Place apartments) to the Public Prosecution Service, though no prosecutions resulted.

Ms Boyle said: "The Department and indeed NIHE missed opportunities to tackle the weaknesses in governance and control. The multiple concerns raised by audits in the period between 2001 and 2010 should have prompted greater action. The Committee considers that there were clear failings in the Department's oversight of NIHE. It is unbelievable that the Department did not test the performance and governance assurances received from NIHE.

"The Committee recognises that much has changed in the NIHE since these serious issues were initially uncovered. Both the Executive and the Department have made considerable strides in addressing the serious flaws that emerged.

"However, this is not the first time that the Public Accounts Committee has pointed out this type of basic failure in governance and management within the NIHE. In 2013 we carried out an Inquiry into its maintenance contracts which showed many of the same failings and we strongly urged the NIHE to take on board our recommendations. We can only hope that the Department for Social Development, as well as other Boards, Audit Committees and senior managers from across the public sector learn from this experience."

ENDS

Notes to Editors:

1. The Northern Ireland Housing Executive (NIHE) has played a pivotal role in the provision of social housing over the past 40 years, often in difficult and challenging circumstances. It is Northern Ireland largest landlord, responsible for the management of around 87,000 homes and is also one of the largest landholders in Northern Ireland, holding more than 900 hectares of land.

2. The Committee took evidence on a number of individual land dealings involving NIHE and private developers.

3. In 2013, this Committee concluded that the culmination of basic failures in governance and management over many years exposed the Housing Executive to a very significant risk of fraud, impropriety and poor value for money in relation to its response maintenance expenditure. In 2016, the Committee has concluded that these governance failings also applied to land dealings and left the Housing Executive vulnerable to corruption in its dealings with private developers.

4. You can access the Committee report here.

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