NIHE Chairman welcomes settlement
Published: Tue, 5 Aug 2014
Donald Hoodless, Chairman of the Northern Ireland Housing Executive, has made a statement regarding the settlement reached with contractors.
“The Board is pleased that an agreement with four planned maintenance contractors relating to payments has been reached and that this settlement has also been approved by the Department for Social Development and Department of Finance and Personnel.
“The Board is confident that there will be no repetition of these failings as new rigorous procedures have been put in place to ensure that value for money is achieved with regard to maintenance contracts.
“The organisation became aware of concerns about suspected overpayments in 2010. These were reported to the Board in September 2011 which directed that the concerns warranted a full investigation. In May of last year the Housing Executive Board was advised that the investigations had revealed an estimated overpayment of £18 million for planned maintenance. Further work was done to refine this estimate and also to recognise the contractors’ entitlements.
“As a result of this negotiated settlement, three of the four contractors have accepted that there were significant overpayments on a number of projects completed during the early years of the contracts but not to the level initially estimated by the Housing Executive.
“The Housing Executive accepts that one of the contractors, Dixons, was not overpaid.
“Three of the contractors have agreed to pay a sum of £670,000.00 to the Housing Executive for the overpayments.
“The Housing Executive and contractors will now work constructively together to deliver new programmes of improvement work for the benefit of tenants across Northern Ireland.
“The Housing Executive must now fully account for the financial consequences of these failings in contract management. The negotiated settlement, while agreed and accepted by both parties, does not fully address our overall financial position. Our estimate of payments that we have made, but that we cannot properly substantiate, amounts to some £12 million. Against this we recognise that contractors undertook work which was not properly verified and costed at the time it was undertaken. Our best estimate of this is that the costs could amount to some £10 million. In order to satisfy the public sector accounting requirements we sought and have now received formal approval from the Department for Social Development and the Department of Finance and Personnel to write off £2.076 million being the difference between the payment we cannot properly substantiate and our estimate of the contractors entitlement.
“We are committed to delivering the highest possible level of service to our tenants. We are disappointed, and apologise, that these events over recent years have been a major distraction to maintaining and improving the 88,000 homes which we manage. Our new management team is now working hard with all our 3,500 staff to get back to delivering top quality services to all of our customers.”