Contract Management in the Northern Ireland Housing Executive
Ministerial Statements
12:15 pm
Alex Maskey (Sinn Féin)
Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his comprehensive statement. I, Mickey Brady and the Committee Clerk met the Minister and his officials this morning to go through the report. Departmental officials with give a further briefing to the Committee for Social Development on Thursday morning.
Clearly, the report makes for gloomy reading, and I presume that it will have perhaps quite a negative impact on the overall workforce in the Housing Executive. That needs to be addressed urgently. I appreciate that the Housing Executive will have a number of weeks to respond to the report.
In the Minister’s statement, he raised the question of how these failings occurred. I repeat what I said in our private meeting: we will await the full response from the Housing Executive on this and the further reports into this matter. We are concerned that we are dealing with the quality of workmanship carried out in people’s homes and the expenditure of vast amounts of public money. All of that has to be protected, and the Minister will have our full support in the quest to ensure that that happens. There has been a culture in agencies and, perhaps, some Departments of the responsibility never seeming to lie anywhere. Can the Minister assure the House that, when the reports are being developed and worked through, we will get to the bottom of where the responsibility lies in the agency and, if need be, the Department, in respect of any culpability over not ensuring that public money was spent wisely? If the reports have been commissioned and were sitting on someone’s desk, where were the trigger mechanisms to ensure that those were dealt with as a matter of urgency?
Nelson McCausland (DUP)
I thank the Member for his question. I assure him that, as I said in the statement, we are getting to the point where we can see the overall picture. We need to know how that situation arose and how it prevailed in the Housing Executive over such a number of years. I will want to know how that happened. We need to get to the bottom of it and see where responsibility lies. I will pursue that to the very utmost of my ability.
Roy Beggs (UUP)
I remind Members that the Chair of the Committee gets some latitude for his question. Quite a lot of Members have indicated that they wish to ask a question, and I ask them to be concise.
Paula Bradley (DUP)
I thank the Minister for his statement, and I welcome the fact that accountability measures have been put in place to maximise the provision of quality services. Is he now satisfied that the adjacent contractors who took over the Red Sky contracts did not have the same issues as Red Sky?
Nelson McCausland (DUP)
I thank the Member for her question, which is an important one. When I came into the Department, one of the first matters that I had to deal with was the ongoing issue around the Red Sky contracts. At that time, the action of the Housing Executive was to take contracts away from Red Sky, where there clearly were issues and problems, and shift them to other contractors. At the time, I asked the Housing Executive whether it could assure me that we were not taking work away from a company with problems and giving it over to another company with the same problems. The evidence that I now have from the various reports that I have referred to, including the draft report from ASM, indicates that there are significant issues and that those issues have been identified across all the contractors examined and a wide range of Housing Executive offices. These issues relate to payments for substandard work, work not carried out and poor quality of workmanship. However, these are contractual issues and due process must be followed. The Housing Executive has to be allowed the opportunity to respond and, indeed, take any relevant matters up with their contractors through the normal process.
I assure you that I will return to the Assembly when that process has been completed. My focus has been on tackling contract management failings wherever they lie. If you are looking at the broad scheme of things, yes: there were issues in Red Sky. However, there were also issues with the other contractors. If you are looking at the scale of the issues, there is not much difference.
Michael Copeland (UUP)
I, too, welcome the statement, which must have been difficult for the Minister to bring to us this morning. Many years ago, I served my time, not in the sense usually associated with this place, but as a maintenance joiner. It is a difficult job to quantify, and it was within my own family. Is the Minister content that the way in which the contracts were written in the first place priced the jobs properly so that they could be done, or was there a suggestion that the companies had priced them so tightly that they basically could not make enough money and they went for the extras? Could I also —
Nelson McCausland (DUP)
With regard to the Member’s first point about contracts, those start on 1 August. Those new contracts are different to the previous contracts. More work has to be done to look at how those previous contracts were originally written, managed and monitored. With regard to the Member’s second point, if somebody claims that they installed 12 doors in a place but installed only eight or, as in an earlier example, paved a garden that did not exist — the Member, I think, is nodding and, in fact, using the word “fraud” himself — something rather strange is going on to say the least.
I thank the Minister for his statement. It has to be noted that the Northern Ireland Housing Executive has transformed housing here in Northern Ireland for the better over 40 years. However, shoddy workmanship and poor performance is unacceptable to tenants and taxpayers. The examples given in the statement, to use the Minister’s own words, are not much different in nature or scale to the failures of Red Sky. Given that, can the Minister explain why he attempted to derail the termination of Red Sky contracts this time last year?
Nelson McCausland (DUP)
I think, perhaps, Mr Durkan failed to understand what I said earlier. Would Mr Durkan advocate, or does he think that it is a good idea, to take work away from a contractor who is performing inappropriately and give it to another person who is doing virtually the same thing? That is the question that he needs to answer.
Alex Easton (DUP)
I thank the Minister for his statement. Minister, were you surprised by the resignation of the former chairman of the Northern Ireland Housing Executive on the day that you received the ASM Howath forensic audit report?
Nelson McCausland (DUP)
The resignation of the chair was entirely a matter for him to decide. However, I was somewhat surprised at the timing, as I met the chair and put forward my concerns to him last Tuesday, many of which he should already have been aware of. The issues that have given me cause for concern have been present in the organisation for quite a number of years. They have been systemic and endemic over the past eight years. Clearly, there are significant questions to be asked around the role of the board and the chair, who has led the board since 2004, in seeking a resolution to those ongoing and prevalent significant issues. In the near future, the further reports that I have referred to will raise even more questions, which must be answered.
Mickey Brady (Sinn Féin)
Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for his statement. Sometimes, Minister, the perception is that these problems occur in the large urban areas and in the larger Housing Executive offices. Do you consider that these problems are endemic throughout the Housing Executive, particularly in the smaller towns and rural areas that the Housing Executive deals with?
Nelson McCausland (DUP)
I have not had the opportunity to go through the several thousand pages, because we got the report only the other day. However, the information that I have been given from an initial study of the report is that it occurs across all the areas and all the contractors who were inspected so far.
Nelson McCausland (DUP)
I thank the Member for her question. The review of the Housing Executive was initiated under my predecessor. The PricewaterhouseCoopers report was brought forward. We have looked at that and done some further work. I hope to bring forward recommendations as soon as possible. However, that does emphasise the importance of moving forward with the review of the Housing Executive.
Alastair Ross (DUP)
The Minister said that he will now be copying the draft report to the Housing Executive for comment and that it will be responding to him by mid-August. When does he anticipate that the full, finalised report will be published? Is he confident that the public will have confidence that there will be value for money in those sorts of contracts in the future?
Nelson McCausland (DUP)
I have only just received the report in the past few days. It is extremely detailed, and my officials and I will need some time to consider all its implications. There is an issue around aspects of the report that are classified as commercial in confidence. However, I am committed to releasing as much information as possible in due course within those confines. We need to have openness, honesty and transparency about all this. We are dealing with one of the largest public sector bodies in Northern Ireland. We are dealing with hundreds of millions of pounds a year. It is important that the general public and taxpayers — as well as tenants — have confidence that they are all getting value for money.
Gregory Campbell (DUP)
Towards the end of his statement, the Minister referred to the culture and practice in the Housing Executive that allowed these things to happen. There is an elephant in the room, Mr speaker is in charge of proceedings of the House of Commons in..." class="glossary">Deputy Speaker, and somebody needs to identify the elephant. The Minister has just got the document. If he cannot respond to my question today, I will be content if he responds after the summer. What was the distinction between the Housing Executive’s treatment of the Red Sky contract and the other contracts? What was the distinction? What was the underlying emphasis that made that distinction by the Housing Executive possible?
Nelson McCausland (DUP)
On the issues involved, there is very little difference between Red Sky and other contractors. The problems were across the board. Different areas, different contractors, but the same issues: overcharging and poor workmanship. At this point, I cannot answer the question as to why one particular contractor was selected for attention at that time and others were ignored, even though it was pretty obvious, from even the most cursory inspection, that this was a wider issue. I cannot answer that question at the moment. In due course, we need to get to the bottom of that sort of issue.
Paul Givan (DUP)
I thank the Minister for his statement. In looking at the culture and practice in the Housing Executive, will the Minister, when he has read the document, be able to assure the House that there are no discriminatory practices in the Housing Executive, whose workforce is under-representative of the Protestant community? In my constituency, the Housing Executive built houses in Twinbrook and Poleglass, while the Protestant community was neglected. Minister, when you have had time to read the report in full, we will need an assurance that no discrimination is taking place in the Housing Executive now.
Nelson McCausland (DUP)
I certainly will want to ensure, as I think we all would, that there are no differences drawn and no discrimination, and that everything is done on a fair, honourable and equitable basis. I welcome the opportunity to put that on record. It is absolutely essential that we move forward in Northern Ireland, not just with this but with every issue, in a way that is fair and equitable. That should be the desire and commitment of everyone, and I am sure that any efforts that are undertaken to ensure that that happens will be welcome.
Ian McCrea (DUP)
I thank the Minister for his statement. Like others, I think that there are some shocking elements in it, and, no doubt, there will be more to come. Does the Minister feel that the Housing Executive is capable of managing the culture change in the organisation that he is referring to?
Nelson McCausland (DUP)
The whole issue of how we move forward is important. I believe that the organisation has failed to respond to known shortfalls in contract management either in a manner that recognises the importance and significance of these issues or in a manner that demonstrates an unequivocal determination to address these matters. The board has taken some actions to deal with the issues, but I do not believe that, to date, those address the root cause of the matter. I still have major concerns about the culture within the organisation and the level of aspiration in the Housing Executive to deliver and to provide me with an assurance that there is the drive, determination and capability within the organisation to effect the change that is required. I need answers to these issues, and that is what I will be focusing on.
As we move forward, that places tremendous responsibility on the board and on the senior management team. I met the former chairman earlier in the week, and I put forward my concerns to him. Many of those concerns should not have been new to him or to the board members because they have been causing me concern for some time. As we move forward, there are significant questions to be asked about the role of the board — including the chair, who was, in fact, in post from 2004 — in seeking a resolution to these significant issues. As we move forward and other reports are produced, those are questions that are going to be asked over the next number of months. I am sure that the questions that I have raised today will be asked again by others, and they are questions that will have to be answered.
Jim Allister (Traditional Unionist Voice)
I carry no torch for the Housing Executive. I have seen enough shoddy work and had other experiences to cause me to share the anxiety of many. However, I want to ask the Minister about the process that he has followed. He has arrived at the point of a pre-emptive strike, whereby he is introducing a form of direct rule of the Housing Executive by his Department on the basis of a draft report that he has just told us he has not fully read and that the Housing Executive has never seen, if I understand him correctly. Therefore, it has had no opportunity to comment on it or to correct, if that were appropriate. Does he think that that process is sufficiently natural justice compliant to arrive at the point that he has arrived at?
Nelson McCausland (DUP)
I am absolutely confident that the way in which we have handled the issue has been the right approach. It has been a measured response, and it has been the correct response. The issues that are identified in the ASM report are not new. They are issues that have already been identified in a forthcoming report from the Audit Office and in the Housing Executive’s internal reviews. Its own inspection unit identified those issues, but, as I said earlier, the reports sat on desks, perhaps from November last year, for six or seven months. It is only now that questions are being asked that these things are being extracted. In fact, they were only extracted when one of our departmental officials was put in the Housing Executive to do some work. It was only then that these things emerged. Therefore, there is the evidence of the internal inspection unit in the Housing Executive, and there is also evidence from the work being undertaken by the Audit Office and from this work. There is a pattern here.
It is not a single, pre-emptive issue. A whole series of bodies of evidence have emerged. That is why it was important that I came to the House at the earliest opportunity, given the importance and scale of the issue and that, ultimately and as the Member stated, the Housing Executive is a matter of real concern for every Member. On that basis, it was essential that I came here. I will return to the matter at the earliest opportunity in the autumn. Indeed, as I said, others will also return to it.
Chris Lyttle (Alliance)
It is, indeed, of great concern that we are failing to provide some of the most vulnerable people in our society with the fundamental right of good shelter. This is a concerning statement, and it will take the Assembly some time to digest the reports. Will the Minister publish all the reports in conjunction with the statement? Also, why was the work of Red Sky staff not part of the wider review of Housing Executive contracted maintenance work?
Nelson McCausland (DUP)
As I said, the report fills three large lever-arch files and has several thousands of pages. Some of the material is in commercial confidence, but something can certainly be made available in due course. I want to be as open and transparent about this as possible. I think that that is crucial. So, we will look at that over the next while to see what can be done.
A year ago, the Housing Executive had a review of Red Sky. We then simply repeated that process with the other contractors. So, when you put all this together, you get the overall picture. I cannot answer your question about why the work did not initially cover the other contractors, in addition to Red Sky, particularly when contracts were taken from Red Sky and given to the others. That question needs to be put to others. When I came into the Department, I was determined to make sure at the earliest opportunity that the same questions were asked so that everybody and every contractor was treated fairly and equitably. I do not discriminate; I want this done fairly.
Fra McCann (Sinn Féin)
I thank the Minister for his statement. I am a bit concerned that, in the midst of dealing with what is obviously a very important matter, the whole issue has been sectarianised. I was one of the people who complained about Red Sky after I stood in homes that had been badly repaired. Many hundreds of other people in west Belfast did the same. Can the Minister guarantee us that there will be no political or sectarian approach to the outcome of this?
Nelson McCausland (DUP)
I thank the Member for his question. I welcome the opportunity to put this on the record. The same issues that apply in one area apply in another, and the same issues that arose with one contractor, which, in this case, is Red Sky, have arisen with others. That is my point. I am not making any distinctions or qualifications. We are being open and frank about this. It is a widespread problem that impacts on people, whether they live in a unionist or a nationalist area. No matter what their background is, they deserve a good-quality service. The report has uncovered that the quality of workmanship is unsatisfactory in many areas.
It is quite clear from the review that there were anomalies in about half the jobs. The word “anomalies” covers substandard work, overcharging and a range of other things. Many of the jobs were substandard, and that is just not good enough. I am sure that the Member agrees that that is simply unacceptable.
The scale of this issue is very large. The figures for response maintenance, planned maintenance and grounds maintenance are £50 million a year, £90 million a year and £20 million a year respectively, and £170 million is the round figure for the total contracts budget. I touched on the fact that we were looking here at response maintenance. There are now some suggestions of issues with planned maintenance as well, which costs an even larger amount of money. In fact, there is some evidence of that.The Housing Executive has a major role in the management of contracts. It is core to the business and must be done properly.
Go raibh maith agat, a LeasCheann Comhairle. I also deeply resent the air of sectarianism that was introduced, and Mr Givan has disappeared from the Chamber. Those houses at Twinbrook and Poleglass were built on the basis of need in the face of flagrant discrimination over years; that has to be placed on the record. Wherever houses are needed, be it Twinbrook and Poleglass or north Belfast, that is where they should be built on the basis of need.
I return to the original point teased out by Mr Allister in regard to the report itself. It is established good practice that reports into important matters, such as this important and sensitive issue, are shared, for the purposes of factual accuracy, with those people or bodies into which the reports have been commissioned, especially if the performance of those people or bodies is being called into question. Will the Minister confirm that he shared the ASM Horwath report with the Housing Executive to ensure fair progress and natural justice and to check factual accuracy? If he did not do so, does he consider this to be a fair and proper way to progress?
Nelson McCausland (DUP)
The report arrived in its final form on my desk in the Department on Friday. The Housing Executive will be given a number of weeks — to mid-August — to respond to it. The contractors will also get an opportunity to raise issues. However, the scale of the anomalies is such that half the jobs were affected. You might be able to explain away one or two anomalies here and one or two there. You will not be able to explain away anomalies in half the jobs. We now have a pattern of internal inspections in the Housing Executive — I brought this to the attention of the House for the first time today — which were carried out by the Housing Executive’s own people and which identified problems. However, those reports simply got buried and bogged down in the bureaucracy of the organisation and sat there. People argued about whether it was 29, 30 or 31 on a particular page, rather than saying, “There is a problem here; let us deal with it.”
The internal reports, which should have been brought to the attention of the board at the earliest opportunity, are part of the emerging body of evidence. So we have the Audit Office report that will emerge in the autumn, we have the Housing Executive accounts that will come from the auditor later this week with comments on those matters, and we have this report. New contracts will be in place on 1 August, so it is important that we get the air cleared and that people are aware of the background to the issue. All this material needs to be out as soon as possible, and I would have been very much criticised by Members of the Assembly had I not brought forward a statement today to get the information out there as soon as possible. It is important that Members are given their proper recognition and place and kept fully informed.
Steven Agnew (Green)
I thank the Minister for bringing the matter to the House. He mentioned that claims were made for work done that was never carried out. What efforts have been made to identify the total number of such cases? Is there some sense of how much it has cost the public purse? What will be done to recover money from contractors who claimed for work that they did not do? Will compensating the Housing Executive for work not done be a condition for those contractors being able to apply for future work?
Nelson McCausland (DUP)
New contracts have already been awarded that will start at the beginning of August. With regard to overcharging and other anomalies, the ASM Horwath people have gone through sample contracts for each contractor, which can then be scaled up to get a fuller picture. Although they have been working intensively since the later part of last year, they have been unable to go through every single docket of every contractor for every job throughout Northern Ireland over the past eight or nine years. It would not be possible to do that. What they have now is a sense of the scale of it. However, where it has been identified that claims were made that were fraudulent, unfounded, inappropriate and improper, yes: the Housing Executive should be chasing after people. We are talking about public money and people should not be getting away with wrongdoing.