Executive to write off £2 million debt run up in contract debacle…

Erm, that’s embarrassing… The final [Says who? – Ed] denouement of the Red Sky contract story appears to that the NIHE’s accounting system was a bit of a mess…

The total of overpayments which could not be substantiated by the Executive was worth around £12 million. That was set against an estimated £10 million bill for work which contractors did not initially claim for but which was included following the negotiations.

That leaves the Executive with a shortfall of around £2 million between the total of payments which cannot be properly substantiated and the estimate of contractors’ real entitlement. The £2 million has been written off.

  • chrisjones2

    What a total utter shambles. The Minister should resign.

    £22m of public money and its clear noone has control, no-one knows whats happening .
    Hang on though. Didn’t we just do that?

  • chrisjones2

    Still good idea to slip it out in middle of recess and holidays when noone is about

  • mickfealty

    Yes, but which Minister?

  • Sergiogiorgio

    Nelson strikes again – I know you are a wee bit sensitive about any DUP bashing, but it’s the same muppet. A “scandal”, he called it, “wilful corruption”, I quote. Then low and behold the enquiry he called for found no evidence of fraud and corruption. Nelson’s job is “to monitor” as Housing Minister, well he’s doing a decidedly crap job of that whichever way you cut it. Whether it’s “manipulated meeting minutes” or incompetent Housing Executive contracts Nelson is up there with our sainted DUP Health Minister. Another “monitor”! Seriously though, these people are so far out of their depth it’s unfunny. Unless they are addressing “cultural erosion” it’s all a farce.

  • Mister_Joe

    It depends – if a Minister knew that the NIHE was “in a shambles” and did nothing about it, then he should indeed be fired if still in office. A minister cannot know in detail everything going on below him although he should have some sysytems in place to detect wrong doing or incompetency. I know that, regardless, Ministers in other places would resign as a matter of “honour” if such a scandal happened on their watch but we already know that such a matter of honour is meaningless in the N.I. assembly.

  • mickfealty

    He was more than a bit wild in his initial accusations, but those are some fairly wild ‘accounting errors’. Most of the fault appears to attach to NIHE.

    And Sergio, do we know what period these contracts covered? Are you saying you want the minister sacked who initiated the investigation?

  • Sergiogiorgio

    The Minister jumped on a headline, was shown to be wrong, and has responsibility for HE oversight within a department known to be a shambles.This comes on the heels of the same Minister instructing a civil servant to change the record, to suit, some would say, his party funders. The Minister is not only incompetent, but some would allege dishonest. Should he be sacked? No, he should be banged up.

  • Tacapall

    Now Mick wasn’t it Nelson who was Minister while Red Sky pulled the wool over peoples eyes by simply changing their name and continuing to do the same shabby work and erm dodgy billing. Wasn’t it the same Red Sky who the DUP publicly promoted to carry out NIHE contracts. You can bet your b…. most of that £2 million loss went on backhanders and payment for contracts not carried out by the same firm above.

  • Comrade Stalin

    Mick,

    The NIHE are saying that the numbers were an extrapolation. The Minister chose to repeat them from the dispatch box without this qualification attached.

    I seem to recall the same Minister, or one of his colleagues, was quite keen to see the Housing Executive abolished. In that context pushing a story of a quango “no longer fit for purpose” is in line with that agenda.

    But .. does this all mean that the Red Sky story amounted to nothing and despite serious findings on BBC Spotlight there were actually no serious irregularities in how they charged for their work ?

  • mickfealty

    Sometimes I think my problem is that I remember too much. Actually I don’t remember that much, but I’ve an inkling how the archives on Slugger work, so I often resort to that.

    The Red Sky case is interesting, not least because of the timing of the trouble it ran into… http://goo.gl/wd501H

    In 2007, shortly after Red Sky took up the NIHE contract for west Belfast, Housing Executive staff began to complain about work being carried out to a poor standard, not being done at all and in some cases being billed for and paid by the Housing Executive twice.

    I’m not trying to score a point with this, because in fact whatever the political motivation, this is the very first time there was a red light on the NIHE dashboard. If nothing else it shows the value of encouraging opposing accounts.

    Now look above at the figures (is everyone on holiday btw, or just unwilling to see this story through to its logical conclusion?)

    The total of overpayments which could not be substantiated by the Executive was worth around £12 million.

    That’s not for Red Sky, that’s what’s been found in the NIHE’s own management of its external contracts. Are we far enough away from the shadow of the towers of the Kremlin yet?

    The only money which is payable back to the NIHE between three contractors is a relatively modest (given the scale of the work) £670,000.

    I’m not going to speculate how £10 million work ‘not initially claimed for’ came to be set against of an ‘unsubstantiated claim’ of £12 million (that would be a complex and expensive legal matter to settle conclusively).

    But these are quite large numbers to be floating randomly about inside ‘the deal’.

    I will say that from what I’ve witnessed in the past within the struggle between client and contractor the public sector is extraordinarily poor at accounting for value for money.

    The problem with pinning this all on Nelson is that he was the one who ordered a shift in the terms of reference which ultimately pinpointed a structural problem within the NIHE.

    His SDLP predecessor wanted the inquiry restricted to the one contractor Red Sky. In short, this is the guy who ordered the report which straightened out the problem.

    Or at the very least, brought it blinking into the sunlight…

  • chrisjones2

    All of them?

    Sorry ….just a wet dream

  • Tacapall

    Without trying to change the general gist of the thread his fellow Minister Edwin Poots of the same DUP is presiding over a potential scandal involving the cancellation of appointments and treatment for hundreds if not thousands of cancer patients, a quick check with the various health and social care trusts will confirm the high volume of complaints from those same patients who are now in a position of not knowing when or why they have simply been erased from the system.

  • Stiofain

    Tbf, Red Sky and this story are relatively unrelated – apart from being covered in the one Spotlight programme. The £18 million relates to the NIHE not knowing how to manage a lemonade stand, let alone planned maintenance contracts.

    Red Sky relates to RESPONSE maintenance, and the allegation of ministerial impropriety (oh, how diplomatic) therein.

  • chrisjones2

    “Convicted drug smuggler Michaella McCollum is to be transferred from Peru to a jail in Northern Ireland.”

    Given the state of our finances why are we wasting hundreds of thousands on keeping this drug smuggler in prison in N I,. She even claims Irish status so why are we housing her at our expense?

    I assume Ford approved this but who lobbied him and why did he do it?

  • Sergiogiorgio

    Nelson McCausland!

  • Jag

    So the claimed overpayment last year was €18m, but today it’s €670k and there are offsetting €470k underpayments, indicating the net over payment was €200k, or 1% of the figure thundered by the minister last year.

    Doesn’t this monkey-man minister also believe Earth is just 6,000 years old?

    Buffoonery on an algorithmic scale!

  • Morpheus

    Off the top of my head…she is from Dungannon, her family is from Dungannon, her family have been paying into the system for generations, she is allowed to have an Irish or a British passport – or both

  • Joe_Hoggs

    Agree Morpheus but do we export all foreign criminals?

  • Morpheus

    Export foreign criminals?

  • Joe_Hoggs

    Foreigners who commit crimes in NI, do we return them to their native countries to serve their jail term there?

    McCollum will probably have an easier time over here, possibly even a reduced sentence if there is a re-trial and then she will sell her story expressing how she was “innocent” all the time.

  • Morpheus

    Don’t know the ins and outs of the case but I can’t help but wonder how much of the multi-million pound drug deal she would’ve pocketed had it been successful, I would suggest not a lot.

    But regardless, she was found guilty in a court of law so she has to do her time, be it here or there.

  • Joe_Hoggs

    I’m not personally against her coming back here although she did state a preferance for the ROI. I am concerned that she (a) will be an additional drain on the local economy and (b) she will not serve her entire jail sentence.

  • Morpheus

    I wouldn’t concern myself if I were you Joe – there are people,paid a lot of money from the public purse, whose job it is to be concerned about this sort of thing

  • Joe_Hoggs

    Great, I’m sure it will be expertly taken care of.

  • Morpheus

    That’s the spirit

  • chrisjones2

    That doesnt answer my point. Why waste our money on housing her,

  • chrisjones2

    Shes already admitted her defence was all made up and she was guilty I don’t buy the ‘poor wee girl in foreign jail’ nonsense.

  • chrisjones2

    I agree but why not that there. U+It will cost hundreds of thousands of real money to keep her here – how many hip operations is that?

  • chrisjones2

    Perhaps they are too busy lobbying because she is one of oursuns . Still at least they found time out of a busy schedule of banning tourist events

  • chrisjones2

    We cant afford them,. We are too busy importing south american drug dealers

  • Tacapall

    Indeed Chris, though it depends on whether you believe prison is for punishment rather than revenge it seems you want to punish the family too.

  • Comrade Stalin

    The total of overpayments which could not be substantiated by the Executive was worth around £12 million.

    That’s not for Red Sky, that’s what’s been found in the NIHE’s own management of its external contracts. Are we far enough away from the shadow of the towers of the Kremlin yet?

    Mick, I am probably misunderstanding you .. but the point here is that it wasn’t found in NIHE’s management of external contracts. There is no missing £12 million. There was an extrapolated figure which was found, on investigation, to be completely incorrect. Or have I got it wrong ?

  • chrisjones2

    Absolutely …and when its our money they are spending sure its like water. But when Danny Kennedy is our shroud waving about turning off the street lights because of a 4% cut in budget, how come wee Davey can afford this?

    And if the criminal was male would they be so quick to bring him home?

  • mickfealty

    Right, jumping randomly in, I feel a bit like the commander of a Vogon destructor fleet but has anyone got any objections if I just bulldoze most of the off topic skimishing off this thread?

  • Mister_Joe

    No objection.

  • Zeno1

    I seem to remember that it costs us over £1500 a week to keep someone in prison here. It would actually be cheaper to put them in the Merchant Hotel,

  • Morpheus

    It’s just conversation Mick…and presumably OK as it’s right there in your “conversation, politics and stray insights” strapline.

  • chrisjones2

    What about the families destroyed by drugs? What about the people in NI whom we cannot afford services for because we are paying to lock up Ms McCollum in a place convenient to her family? Is that the way the public want their limited pot of money spent?

  • chrisjones2

    As the protagonist who started this I don’t feel it is off topic. Here we have another Minister spending public money like water and for what? We need to know WHO lobbied him and why did he decide this?

  • Tacapall

    Chris when people can run up a bill of millions upon millions of pounds to have the right to walk where they please, burn what they please, destroy what they please then this family have just as much right to have their daughter brought home to serve her prison sentence in a prison near her family. Why else would the British government have such an agreement in place its not the first time its happened.

  • mickfealty

    Really depends on the value of the straying Morph. With my Vogon head on, I’m struggling to see any here.

  • mickfealty

    I’ll be honest CS and say that I don’t know, but it’s not the way the article is written. Ultimately, it looks to me (and this is where the Red Sky story is related) that NIHE’s accounting technique has been sloppy. In the Red Sky case they paid out for repairs on buildings that did not even exist.

  • http://www.alda-architects.co.uk/ Alan

    Comrade I agree.

    I couldn’t make sense of the Telegraph’s article. In building contracts it generally works like this;
    -Contractor tenders on the contract documents and usually there is a Bill of Quantities.
    – During the course of the contract there are additions and reductions that should have instructions authorising.
    – the final contract sum is then modified using the rates in the Bills.
    – if the variations are constant and significant there may be grounds for a claim under the contract, both for extra time and extra cost due to disruption.

    Unless we have the detail of each of these contracts we can’t comment authoritatively, but much of what is described could be quite normal balancing of additions and deductions.

    Politically this has to be seen in relation to Red Star, the extraordinary interventions by various politicians, allegations of sectarian bias etc etc.

    Let us not forget that the Housing Executive had itself terminated that contract. Post that decision, relations between the Department of Social Development, the DUP generally, and the NIHE seem to have become strained. We have to ask why?

    Brian Roundtree the then Chair of the Housing Executive resigned. (I personally believe him to be a sound individual.) So political intervention, and handling, had serious consequences. If I remember correctly there were also utterances from some DUP councillors who were on the board of the executive that did not follow the apparent party line.

    In this whole vortex of spin and events we have to try and decide the motivation guiding the Minister at that time.

  • Nevin

    The reference to ‘previously uncharged work’ – ie £10 million – is most peculiar.

    The Detail, back in November 2013, produced a summary of the Campbell Tickell report and included a link to that report. Here are a few snippets from the summary that caught my eye:

    The contracts had originally been estimated at £50m over a four year period. The contracts were later extended for an extra year but more than tripled in cost to £172m. .. the organisation’s board members and its Audit Committee had been supplied with “incomplete information” from Housing Executive officials, which obscured the true levels of overpayments to contractors. In 2009 NIHE’s Audit Committee had voiced concerns about the risks surrounding the management of contract payments. It had ordered an independent review, which never took place. .. investigators found that one NIHE district is still overpaying contractors by 18%. .. The report states that in 2011 was a “culture of mistrust and antagonism” between NIHE board members and unidentified members of the executive team. .. Investigators found that an ‘ethos’ existed within NIHE to spend all available cash in its possession, rather than see it returned to central government.

    I see no reference to protection money paid to paramilitary organisations. Presumably significant sums would be involved and might well impact more on some NIHE districts than others.

    The spend ethos reminds me of a story about a small contractor who got stung in another sector of public governance. He was asked to submit an invoice for work that would be carried out in the next accounting period but that showed up as payment for work that hadn’t been done.