Northern Ireland’s housing stock is modernising, with unfit dwellings at an all-time low, but a fragile economy means few first-time buyers are entering the market.

These trends are identified in ‘Northern Ireland Housing Market Review & Perspectives’, published annually by the Housing Executive. Its current edition covers 2011-2014.

Rocked by the global economic crisis, Northern Ireland’s economy is weakened by an official 7.3 per cent unemployment rate (61,000 persons), but when all types of joblessness are considered, more than a third of the workforce is workless.

Spending cuts will aggravate the problem and lead to more dependence on benefits. Construction lost around 30,000 jobs in the recession, according to the Construction Employers Federation.

Demographics

The province’s population is expected to grow by 7 per cent over 2008-2018, from 1,775,000 to 1,896,000.

There were 204,500 single-person households in 2008 but 249,400 are anticipated in 2018 and 273,800 in 2023. This implies more new dwellings but with different designs i.e. smaller units and more supported housing to help older people live independently.

This growth has been driven by immigration (with many migrants travelling alone) and broken marriages and relationships, although the report also points to the increasing number of older people living alone.

Up to 2015, the Housing Executive expects that 2,500 new houses will be needed per year, but it emphasises that supply should not outstrip demand.

Stock

Private sector new builds reached 6,800 in 2009-2010. However, this contrasts with 14,000 four years ago. In the same year, housing associations started work on 1,838 new social housing units, against a ministerial target of 1,750.

Ensuring funding for new social housing is the Housing Executive’s most difficult challenge but the winter cold snap emphasised that existing stock should not be neglected. Good quality housing, in turn, can lead to better health, education and social cohesion.

The revised draft Regional Development Strategy anticipates a need for 11,150 new houses each year up to 2025; the previous estimate was 12,235.

Affordability

A peak-to-trough fall of 41 per cent in house prices left the average at £148,243 in 2010’s third quarter, back to 2005 levels. The previous meteoric rise resulted in 60 per cent of house prices at £201,000 or more in mid-2007, while 90 per cent were £151,000 or more. The highest average was £250,586 in 2007’s third quarter.

During the same period in 2010, 26 per cent of dwellings were priced under £100,000.

Housing is more affordable but negative equity, tight lending, joblessness and debt mean that demand has dwindled. House sales and purchases have reached an historic low, just under 11,000 for the 12 months up to September 2010, which compares to 27,200 for that period in 2005-2006.

Lenders now typically offer mortgages at 75 per cent loan-to-value ratios but stricter criteria and credit history checks mean that few potential applicants qualify. Returning confidence to the market is a key challenge for policy- makers and the private sector.

The proportion of owner-occupied dwellings appears to have “peaked for the foreseeable future” after falling from 66 per cent to 62 per cent over 2006- 2009.

Rental

Rapid growth in the private rented sector over 2006-2009 led to its stock reaching 125,000 houses (one in six). The proportion rose from 12 to 17 per cent. Private rented dwellings are slightly more likely to fail the Decent Homes standard but more likely to meet the Housing Health and Safety Rating.

Falling house prices have made investors more willing to invest in rental. Houses in multiple occupation (HMOs) will continue to be important for students, young professionals and migrant workers.

Social housing accounts for 16 per cent of total stock (116,000 dwellings). Of these, 15 per cent fail the Decent Homes test, mainly due to poor heating. More than half (56 per cent) of social housing households had incomes of under £10,400 per year.

Stress

Housing stress and the overall waiting list have both doubled over the last decade and peaked in March 2008. The March 2010 waiting list stood at 38,120 but sharply increased to 39,344 last September. Over the same period, applicants in housing stress rose from 19,716 to 20,513. The number of households presenting themselves as homeless rose to 18,664 in 2009-2010, up 3 per cent on 2008-2009.

As explained, the net stock model, used to calculate social housing need, indicates that 2,500 new units are needed each year over 2010-2016; this comprises 1,900 to meet population growth and a further 600 to clear up the backlog since 2001.

Condition

Housing unfitness stood at 2.4 per cent in 2009, down from 3.4 per cent three years previously. The number of unfit dwellings fell from 24,200 to 17,500. Unfit dwellings tend to be vacant (59 per cent) and built before 1919 (48 per cent), and unfitness remains higher in the countryside (a 4.1 per cent rate).

The share of stock failing the Decent Homes standard fell from 23 per cent in 2006 to 15 per cent in 2009, but a consistent 19 per cent failed the Housing Health and Safety Rating in both years. The average SAP rating for energy efficiency rose from 52 to 57 over the same period but rising energy prices pushed fuel poverty up from 34 per cent to 44 per cent of households.

Policy

The new Executive’s policy agenda is not yet finalised but decisions in London and Dublin will have a strong influence on the outcome.

George Osborne’s first Budget last June proposed changes in how local housing allowance (LHA) is calculated, designed to save £1.8 billion. Around 38,000 private tenants here currently have their housing benefit assessed on LHA and around £15 million in government support could be cut, resulting in tenants losing homes and landlords losing income.

The October Spending Review will cut Northern Ireland’s capital spending by 37-40 per cent and its resource spending by 7-8 per cent by 2015, depending on Treasury or DFP estimates.

Around €5 billion of Nama’s €80 billion assets are estimated to be located in Northern Ireland. Austerity and unemployment have left ‘ghost estates’ across the Republic.

Looking ahead, unemployment, tax increases and spending cuts will reduce household budgets in the UK. The Republic’s December 2010 Budget has reduced consumer confidence and spending and similar trends are expected north of the border.

A “very substantial” demand for social housing remains after the peak in waiting lists and housing stress. A major increase in new housing units since 2006 has been accompanied by a marked improvement in their condition, but the Housing Executive emphasises that ongoing funding is needed to continue this trend.

Improvements in energy efficiency can significantly reduce fuel poverty but not eradicate the problem as prices are expected to stay high.

Throughout his term as MLA (since 2003), the new Social Development Minister’s housing focus has mainly concentrated on his North Belfast constituency, which is the second most deprived electoral ward in Northern Ireland (after West Belfast).

Containing various interfaces and six peace walls, North Belfast is blighted by empty, vandalised buildings. Current regeneration plans for the area were introduced by Alex Attwood and will be overseen by Nelson McCausland. This includes a new website for developers to declare their interest in regeneration opportunities for vacant sites and a regeneration scheme for the ‘gateway site’ at the junction of Carrick Hill, North Street, Peter’s Hill and Millfield.

The deadlock over development of the Girdwood Barracks and Crumlin Road jail site will have to be addressed by McCausland. He and DUP colleagues Nigel Dodds and William Humphrey responded harshly to the former Minister’s decision in March 2011 to consult on the building of 200 social homes on the site, despite the Executive not yet reaching agreement on a master plan for the area, which was drafted in 2007.

They said it was “a very cynical move by the Minister who knows full well that his announcement cannot be turned into reality as it does not have the agreement of the Assembly Executive as required.”

In a February 2008 debate, McCausland said it was important to ensure the area would contain shared housing. He bristled at Alban Maginness’ description in 2006 of the sites at Torrens and Girdwood as a “windfall site” because he claimed that Protestant families had been driven out of those homes “after years of intimidation by republicans.”

McCausland said: “In other words, [Maginness] said that the driving out of Protestant families was a ‘windfall’, a word that, to me, means an unexpected benefit. In that case it was not of benefit to those Protestant families who were driven out.” In 2010 he went further, referring to that incident as “ethnic cleansing.”

The previous Programme for Government contained a commitment to provide 10,000 social and affordable houses by 2013, of which 7,500 would be social and 2,500 affordable.

In addition to social housing, the new Minister’s remit includes Housing Executive reform, social security (including winter fuel payments) and urban regeneration.

The DUP manifesto contains detailed commitments on housing and fuel poverty. Therefore, we can expect to see McCausland attempting to implement the following:

• a comprehensive homes and communities strategy for Northern Ireland, agreed with the housing sector;

• a review of the common selection scheme;

• an examination into creating a single regulator for the whole housing sector;

• legislative changes to strengthen the powers of social landlords to deal with anti-social tenants;

• a mandatory register for private landlords;

• an extension to the programme of installing carbon monoxide monitors in social homes;

• a Northern Ireland Housing Forum involving all housing providers and representatives of government departments including DSD, DFP and the DoE;

• a consultation on a new process to regularly review the needs of tenants of social homes; and

• a cross-departmental homelessness strategy.

The manifesto also pledges to take an early decision on the recommendations from the review of the Northern Ireland Housing Executive, with the DUP preference for exploring models that would separate the strategic and landlord functions, and utilise assets to make social housing more self-financing.

In terms of home ownership, the DUP Minister would assist first-time buyers through a graduate home loan scheme for those with degrees in STEM, finance and business subjects, which are “crucial” to improving the economy.

The Minister would promote shared ownership schemes and provide tenants with greater opportunity to own or part- own their home and would explore ways of increasing funding to assist the co- ownership scheme. A government- backed loan scheme for first time buyers would also be established.

The DSD would “strike a better balance” between funding new builds and maintaining existing social homes. It would work with housing associations analysing the potential to enhance their role in developing affordable housing and regenerating communities, whilst trying to achieve efficiency through consolidation and procurement. Affordable broadband in social homes would also be a priority.

On fuel poverty, the DUP says it would “drive [it] down” to a level comparable with the rest of the United Kingdom. Because almost half of Northern Ireland’s population are currently defined as being in fuel poverty, the DUP would focus on those in most severe need. Energy efficiency would be promoted in all homes and “energy brokering” would be encouraged between large public bodies and businesses willing to demonstrate corporate social responsibility.

The Warm Homes scheme would be more flexible and allow for repairs and upgrades of existing broken or inefficient oil and gas heating systems and a boiler scrappage scheme would be fully implemented, according to the manifesto.

Formerly the Culture, Arts and Leisure Minister (2007-2011), McCausland is a fundamentalist. He describes Northern Ireland as: “like the centre of Downpatrick [because] when you go to the bottom of the hill there are three streets that meet at the traffic lights: Irish Street, Scots Street and English Street. That’s what Northern Ireland is, a mixture of all three.” (see agendaNi, Issue 43, pages 8-11)

“Don’t put all your funding eggs in the one financial basket” is Nigel Perryman’s main message to housing associations as he encourages them to consider seeking finance on the capital markets.

Perryman is The Housing Finance Corporation’s relationships manager and has worked in finance for large corporations, housing associations and within the wider property sector.

Speaking at the Northern Ireland Housing Conference, he noted that banks’ current preference is to lend over shorter terms than was the case in the past. Reform of the banking system is not guaranteed but it is certain that costs will increase. Indeed, he foresaw 10-20 years ahead of rising interest rates.

As an illustration of UK banks’ influence, the top six British banks account for 88 per cent of deposits. This compares to 68 per cent for the top seven in Germany and 35 per cent for the USA’s top eight.

Bonds are commonly used in the utilities sectors, normally over 30-40 years and are issued at a considerable cost. Boards “tend to be quite conservative” and are not as familiar with the capital markets as with banks. As a former housing association finance director, he appreciates the pressure they are under and the need to take time and research the issues.

Interviewed by agendaNi afterwards, he emphasised that regulation was driving up bank costs: “The biggest change is that associations have always borrowed long term in line with their business plan.”

Banks account for 80 per cent of housing association finance but “don’t want to play the long-term game”. Capital markets are “probably one of the few sources of genuine long-term finance.”

Associations do need the two. Going forward, it would be practical to approach banks for short-term funding and capital markets or some other provider for the long-term funding.

He encouraged finance directors to see this model as “protecting against instability in interest rates” which were now at historically low levels. Research and lobbying the board would take a lot of work but shouldn’t preclude looking at the capital markets.

“The association that gets the balance right between short-term and long-term funding,” he concluded, “is probably the one that is putting itself in the strongest position going forward through what will undoubtedly be a delicate financial period.”

Alex Maskey MLA
Chair
Party: Sinn Féin
Constituency: South Belfast

A member of the party since the late 1960s, he was elected to the Assembly in 1998 for the West Belfast constituency but was re-elected in 2003 for South Belfast. Maskey has previously served as Deputy Chair of the Assembly and Executive Review Committee. A former Belfast City councillor, Maskey was the first member of Sinn Féin to serve as Belfast’s Mayor. He has also been a member of the Policing Board since 2007. Maskey previously worked as a docker and a part-time barman before entering into politics.

Mickey Brady MLA
Deputy Chair
Party: Sinn Féin
Constituency: Newry and Armagh

Brady was elected to the Assembly in 2007 and is a former member of the Social Development Committee, the Procedures Committee and the Health Social Services and Public Safety Committee. He has campaigned against budget cuts and fuel poverty and on housing issues such as homelessness. A party spokesman on welfare rights and the elderly, Brady has previously worked as a welfare rights officer.

Gregory Campbell MP MLA
Party: DUP
Constituency: East Londonderry

Minister for Regional Development (2001-2002) and Culture, Arts and Leisure (2008-2009), Campbell was elected to the Assembly in 1998. An MP for East Londonderry since 2001, he has also served as a Derry City councillor since 1981. He sat on the Public Accounts Committee and the previous Social Development Committee, before being appointed to the Executive table.

Sammy Douglas MLA
Party: DUP
Constituency: East Belfast

Douglas spent the last 25 years working in loyalist communities and has been involved in reconciliation as a founder member of the Belfast Interface Group. Elected to the Assembly in 2011, he also sits on the board of the East Belfast Partnership and works with the East Belfast Community Development Agency. He is also a former member of the Harland & Wolff Task Force and Laganside Corporation.

Alex Easton MLA
Party: DUP
Constituency: North Down

Elected to the Assembly in 2003, Easton has also served as a North Down councillor since 2001. He is also a former member of the Social Development Committee as well as the Health, Social Services and Public Safety Committee. He worked for fourteen years in the health sector and in the Ulster Hospital as a higher clerical officer.

Pam Lewis MLA
Party: DUP
Constituency: South Antrim

A DUP councillor for Antrim Town since 2005 and the first female Mayor of Antrim Borough Council (2010) Lewis was successfully returned for another term in May 2011. Lewis has previously worked in the DUP’s South Antrim constituency office. She has also worked as office manager for Sammy Wilson in the East Antrim office and a member of the DUP Central Executive Committee.

Fra McCann MLA
Party: Sinn Féin
Constituency: West Belfast

A former member of the last Social Development Committee and Regional Development Committee, Fra McCann has also represented Sinn Féin as housing spokesman. Elected to the Assembly in 2003, he has served as a Belfast City councillor since 1997. McCann worked as secretary of the Divis Residents Association, which fought a successful campaign to have the Divis complex demolished.

Michael Copeland MLA
Party: UUP
Constituency: East Belfast

A former MLA in the suspended Assembly (2003-2007), Copeland has also served as a Castlereagh Borough councillor since 2001 and Chairman of Castlereagh District Policing Partnership. He has a keen interest in domestic, socio- economic and housing problems and is a former lieutenant in the Ulster Defence Regiment. Copeland also worked in the construction and allied trades industry as a company and managing director.

Mark H Durkan MLA
Party: SDLP
Constituency: Foyle

Mark H Durkan was elected to the Assembly in 2011, replacing Pól Callaghan. A Derry City councillor since 2005, he previously served as Chairman of the council’s Planning Committee. He is also the party’s spokesman on health and has sat on the Western Health and Social Care Board, the Derry Visitor and Convention Bureau and is involved with several community-based groups.

Judith Cochrane MLA
Party: Alliance
Constituency: East Belfast

A Castlereagh Borough councillor since 2005, Cochrane previously ran Naomi Long and Chris Lyttle’s East Belfast office. She has also worked for the Civil Service, as a management consultant in the private sector and in retail management. Cochrane has also sat on the council’s Finance, Leisure and Technical Services Committees.

David McClarty MLA
Independent
Constituency: East Londonderry

David McClarty became an independent MLA in January 2011 and was re-elected in May. However, he was a UUP MLA from 1998-2011 and a former chief whip for the party. McClarty also sat on the Enterprise, Trade and Investment Committee and the Environment Committee. Elected to Coleraine Council in 1989, he was also appointed as Mayor of Coleraine (1993-1995).

DUP
Social Development Minister: Nelson McCausland MLA
Assembly Private Secretary: William Humphrey MLA
Assembly Spokesman: Gregory Campbell MP MLA
Westminster Spokesman: William McCrea MP

A DUP Minister would separate the Housing Executive’s strategic and landlord functions, and aim to make social housing more self-financing. A comprehensive ‘homes and communities strategy’ would underpin policy and a ‘housing forum’ would bring together all interests in the sector.

The party backs a “light touch” mandatory register of private landlords, a government-backed loan scheme for first-time buyers and a graduate home loan scheme. The latter proposal would only cover graduates in ‘economic’ subjects (e.g. science, finance and business) and is clearly designed to keep them in Northern Ireland. The common selection scheme would be reviewed and the boiler scrappage scheme fully implemented.

It would also explore the potential for a single housing regulator and a derelict land levy in urban areas. A Community Empowerment and Renewal Bill would allow residents to acquire under-used public sector land and encourage social entrepreneurship.

On social impact bonds, the party cites the Regent Park Revitalisation Project, a community housing scheme in Toronto, which was “substantially financed” by bonds sold to provincial governments, pension funds and institutional investors.

The DUP would prefer housing policy to sit alongside local government, rates and benefits in a ‘department of communities and social welfare’. It also wants to see a cross-departmental homelessness strategy. DUP MLAs held the social development brief in the first Executive (1999-2002).

Sinn Fein
Assembly Spokesman: Alex Maskey MLA
Oireachtas Spokesman: Dessie Ellis TD

Specific party objectives include mandatory registration scheme for private landlords, a deposit retention scheme to protect tenants from landlords who withhold deposits, a review of the status of housing associations and an “effective” mortgage relief scheme.

Maintenance schemes would be protected from cuts and Sinn Féin pledges to “end discrimination” against people seeking housing in areas of high demand. Disabled people should be prioritised within the points system and the party would establish targets and timetables to reduce fuel poverty.

Its proposals include enabling the Housing Executive to borrow £250 million per year from the European Investment Bank and other funders. For comparison, the housing budgets for 2011-2012 are £186.6 million (current expenditure) and £130.1 million (capital investment).

UUP
Spokesman: Michael Copeland MLA

Ulster Unionists call for spending on the Warm Homes scheme to be

maintained at £20 million and also seek the re-introduction of boiler replacements in that scheme. Older people who wish to remain in their own homes should be cared for at home.

The party emphasises that poor housing contributes to health inequalities i.e. higher levels of ill-health in some areas than others. Too many families are living in poor housing or trapped in poverty, it warns.

West Belfast candidate Bill Manwaring suggested that the Social Development Minister should look at models throughout Europe, where private developers and housing providers work together with government capital, and release land banks to housing associations.

SDLP
Spokesman: Mark H Durkan MLA

An end to segregation in housing is the SDLP’s most ambitious aim, pledging an “intensified” shared future approach.

The party also promises to insulate 100,000 homes and build more social housing where the need is highest. A mortgage rescue scheme is also prioritised and all social housing should meet the Decent Homes standard. A new

homelessness strategy would be drawn up.

A commitment to eradicate fuel poverty still stands. Reform of the Housing Executive and housing associations would continue, with more private finance and new delivery models introduced. Like the DUP, the party suggests a ‘communities, housing and local government department’, which would take on OFMDFM’s urban regeneration remit. The SDLP held the social development brief from 2007 to 2011.

Alliance
Spokeswoman: Judith Cochrane MLA

Alliance’s proposed Shared Housing Bill would require the Housing Executive to promote mixed housing. Protecting shared housing would involve a clampdown on paramilitary and sectarian markings. It claims the Housing Executive has “rarely taken action” on paramilitary flags.

The party would consider the mutualisation of the Housing Executive. “Ambitious targets” for reducing fuel poverty are needed, as part of the Green New Deal. The Department for Social Development must also look beyond the “easy wins” in energy efficiency and move on to solid wall insulation and secondary glazing. It should also aim to build zero-carbon homes.

Mandatory private landlord registration and extending the Decent Homes standards to private rented housing are also proposed. Alliance would consider introducing a ‘preventing possession fund’ for householders at risk of repossession and re-introduce the Apartment Developments’ Management Reform Bill which fell at dissolution.

Green Party
The Green New Deal, according to the Greens, must insulate 500,000 homes across Northern Ireland, a massive figure as the province has around 700,000 households. It also pledges a 20 per cent developer

contribution for social and affordable housing in all developments of 20 or more houses. Each new housing estate should have allotments and funding for housing adaptations must be ring-fenced.

PUP
The Housing Executive should have first refusal on repossessed

properties, the PUP says, and should employ its own maintenance staff. Fuel co- operatives, funded by weekly payments by residents, could keep homes warm. All pensioners in Northern Ireland should receive home visits to advise them on energy efficiency. A ‘three-strike’ rule for disruptive tenants is also suggested.

TUV
No commitments on housing are made in the TUV manifesto. Its councillors have lobbied on local housing needs.

Belfast’s original streets are disappearing and will soon be gone for good unless urgent action is taken, according to Mark Hackett. “I think we have very little time to save what is unique about Belfast’s spaces,” the architect states.

Most of the old Victorian terraces and mill buildings have been knocked down, taking with them much of the city’s character. Some of the best remaining examples can be found in the Village and the New Lodge.

Hackett is a Co-Director of the Forum for Alternative Belfast, a non-profit “think tank and do tank” aiming for “a connected and a better designed city”.

As well as being more sensitive to the past, he wants to see more strategic thinking about how today’s streets are used. This follows on from the ‘Happy to live here?’ exhibition on urban design organised by him and fellow architect Declan Hill in 2006.

“What was realised was that it wasn’t so much the housing, as the spaces in between housing, that was the biggest problem,” he comments. Car parking bays, for example, take up the space which could be used for a front garden.

No one organisation is in charge. The Roads Service, for example, maintains the street surface, its signs and lights, while the city council handles building standards and street names. A multiplicity of organisations “means it’s very difficult to pull together those forces to make good space.”

Decision-makers are also disconnected from local communities due to the Troubles and the legacy of direct rule. Hackett therefore sees a “renewed sense of local politics” as an important factor, with the people who make the decisions about an area actually coming from the area.

“What we need to talk about is care or pride in our area” whether than means the street or the city.

However, he claims that Belfast is not a single entity but three or four cities, with each one “not aware of the other”. The city centre “has become almost a utility for shopping, for business, but nobody lives there”.

The solution, in his view, does not involve re-inventing the wheel but just adapting best practice from other places and implementing that with strong leadership. The English Partnerships quality standards, for example, were copied in Dublin’s regeneration.

At street level, strict enforcement of waste regulations would also improve appearances e.g. making sure that bins do not take up space at the front of houses. The new Social Development Minister will be asked by the forum to take a walk around two recent housing schemes, to point out examples of poor design.

While the city was once “completely walkable”, it has been given over to the car. Road-building from the 1960s onwards encircled the city centre with large open spaces. Hackett characterises Belfast city centre as a ‘grey doughnut’ encircled by those spaces, which could be put to good use with some creative thinking.

Take the Divis Street bridge over the Westlink, for example. The forum’s ‘Divis Pathfinder’ project visualises the street as an arterial route that can raise the value of surrounding buildings and encourage people to walk into the city centre. Shops could be built on the bridge itself.

Publicly-owned land could be released in a controlled way, thus making it a zero- cost improvement. This project is being assisted by the Strategic Investment Board and the Roads Service.

In addition, the forum’s ‘Inter-Change’ project considers how the Roads Service can complete the flyover at York Street originally planned in the 1960s. Traffic currently spills over into the nearby streets. The forum thinks that these streets could be used by more pedestrians and cyclists, with gardens, trees, shops and housing, again increasing the land value. A four-week exhibition on the project, using work by architecture post-grads, was held at the nearby Golden Thread Gallery during May.

While the Housing Executive has “good governance structures” in place, a range of improvements could be made.

Alex Attwood ordered the review in October after it emerged that systems within the Housing Executive, including procurement practises, were not “sufficiently robust”. He also called for a “fundamental review” of the organisation which is due to be completed in March.

The Minister announced an investigation into work carried out by Red Sky – one of the Housing Executive’s main contractors in October. This ended in January but an investigation by the PSNI into a land dispute at Nelson Street is still ongoing.

Attwood presented the findings of the governance review in January. This was the first major review of the organisation since its establishment in 1971. By the public sector’s standards, it is a large body, with 3,242 staff, over 90,000 tenants and a budget over £740 million.

The review examined flows of information available to the Housing Executive board, its management of risk and fraud, procurement and disposal of land, procurement and repairs and maintenance.

It made 16 recommendations to improve management and 59 best practice recommendations. In August 2000, the Housing Executive began using Egan contracts. Derived from the Egan report on ‘Rethinking Construction’, these are designed to give the contractor more security through longer term contracts and encourage contractors to complete work to a high standard.

A separate review into Egan contracts for repairs and maintenance work produced 14 recommendations on tighter procurement processes and better contract management.

Within the governance review, a “range of critical control issues” that are weakening governance structures and the organisation’s operations were identified.

One of the main recommendations in the report was that formal terms of reference should be developed by the board and there should be regular reporting of assurances, from managers to their directors, to the Chief Executive and to the board. This would allow “greater opportunity for challenge and holding management to account”, it stated.

A comprehensive review of the board’s standing and committee arrangements would also ensure that “relevant business comes to the committees at the appropriate time” and that key documents can be reviewed and challenged.

A review of risk management, including an analysis of a number of schemes that have breached standing orders, such as kitchen replacements and maintenance repairs on heating systems, is a priority. This would help to explain why a draft audit report in 2007 – which raised problems about land disposals – was never finalised or brought to the audit committee’s attention.

‘Full scrutiny’

The review team also stressed the importance of greater openness and transparency, as well as full, accurate, clear and timely information to the board and the audit committee. This should ensure that there is “full scrutiny of activities and timely action to deal with governance and control issues in the future”.

It was also recommended that the housing organisation should set up a corporate compliance unit, amalgamating all existing internal inspection teams, including the repairs inspection unit.

While the report found that “there are adequate controls over performance of maintenance works and the prevention and detection of fraud and error”, there was room for improvement. Greater use should be made of the repairs inspection unit and the current key performance indicators, which are used to measure the performance of contractors, should be reviewed.

A number of “effective human resource systems” are in place within the organisation but the profile of the organisation is “ageing”. The team advised that there is “a risk that the organisation will lose significant knowledge, skills and experience” if this isn’t addressed.

It also reported that further training is needed on the seven principles of public life to ensure they are being “implemented effectively” throughout the Housing Executive i.e. selflessness, integrity, objectivity, accountability, openness, honesty and leadership.

In the separate review of Egan contracts, recommendations focused on tighter procurement processes and more robust contract management. These included a new procurement vision and strategy, a named contract manager for each contract, and a statistical approach to inspection.

The review team also suggested that targets should be set prior to procurement of any contract and then “embedded in the contract so that bidders can price against known targets”.

‘Important lessons’

Attwood said some “very important lessons” had been learnt from the reviews, adding that the Housing Executive has already put forward a first draft of an implementation action plan. “I want to see these recommendations in the report implemented quickly by the Housing Executive. I have already put in place arrangements to make sure that happens,” he stated.

The Minister vowed that he would also do more to ensure good governance is in place: “I will meet up much more regularly with the Housing Executive board and my Permanent Secretary will chair an oversight group to ensure these recommendations are completed. In my view, this is a critical piece of work and has major consequences going forward.”

The DUP’s Simon Hamilton said there is “a need for ongoing positive reform across the housing sector”. He also called for the Minister to provide assurance that he would make further changes to the governance of the Housing Executive if necessary.

Sinn Féin’s Paul Maskey welcomed findings of the reviews but said that “serious issues”, such as the organisation’s response to severe weather in December, still need to be answered.

Alliance welcomed the reports and the fact that they had been completed “so speedily”. However, Anna Lo questioned the timescale of the implementation plan and when the fundamental review would be completed.

Ministerial introduction: Alex Attwood MLA

The Osborne benefit, capital and revenue cuts have the potential to be ‘a perfect storm’. Just as the ERSI said about the Republic of Ireland last month – deep cuts done quickly can lock an economy into high unemployment and low growth. The consequences are clear for Northern Ireland, not least as we are in recession to late 2012, at least.

At the same time, Northern Ireland has high levels of deprivation, compounded by the legacy of conflict, with the risk of instability, which the latest generation of anti-democratic groups aim to exploit. London says it understands this. To propose budget and benefits cuts with disregard to this context is folly.

The scale of the housing and other benefit cuts requires two responses. I will again meet London welfare ministers on 8 November and propose how to move forward.

Second, the Northern Ireland Executive must demonstrate – and be seen to demonstrate – that with the risk of over 90,000 unemployed, and with housing, child and welfare benefits the Tory first option for savings, we will go further and deeper to protect those in need.

Housing will be a touchstone of this approach.

Are we going to bring new build (2,000 this year) to a shuddering halt, at the very moment when need will rise, with fresh risks to home-owners and with the impact on builders and tradesmen?

With 44 per cent of people in fuel poverty, do we have the imagination to fund, across government departments, the Green New Deal – tens of thousands of homes made energy efficient in three years?

Will we ‘correct the market’ by driving up private rented standards, pass legislation for developer contributions, and broker energy costs with the gas and electricity suppliers given the 130,000 houses in the public sector?

These are all the tests for me as Minister and all of us as an Executive. We should be judged – and judge ourselves – on how we respond.

At the same time, we will do things differently and do more reform. The Housing Executive and housing associations have been trail-blazers, together transforming housing conditions.

They are both born out of reform. A new phase of reform can build on the achievements. My fundamental review of the NIHE can position it for the next 20 years and my short, sharp audit address short-term doubts. The merger of housing associations, shared procurement across costs centres, and restraint and reductions in Chief Executive salaries are part of this picture.

Shortly, I will issue ‘A Housing Response in Times of Recession’. It will push limits of government housing policy, social clauses in building contracts, oversight of landlords, innovation on warm homes and beyond. I believe there is more that we can do and we should do it quickly.

But a word of caution. There is talk of ‘a quick fix’ for funds for new build social housing. There is none. The price of the fix could be to privatise the Housing Executive and let the market prevail. I am scoping out what could legitimately be done to help fund new build. That is the fertile land; others should show the same caution.

Margaret Ritchie left me a big legacy as Minister:

• more new social build than in a decade;

• a 6 per cent reduction in waiting lists;

• encouraging housing associations to procure and finance differently;

• new laws on landlords.

My ambition is to drive this forward, deepening accountability and pushing limits on housing policy and, where appropriate, housing finance.

But the Executive must also agree that the right to a home and the protection of those in need, given the ferocity of London’s targeting of those in need, is non-negotiable. It must be a core value going forward.

In 2005 Depaul Ireland opened its first ‘wet hostel’ in Belfast to accommodate street drinkers who were sleeping rough. Five years on and more than 104 people have been through its doors. It remains the only hostel of its kind in Northern Ireland.

Located on Garmoyle Street, near the docks, the hostel offers care and assistance to those who need it from a dedicated team of staff and volunteers. It caters for 23 homeless people and operates on a ‘harm reduction model’ which encourages residents to reduce their alcohol intake alongside a plan of medical care, healthy eating and activities such as art and gardening. Stella Maris is a long-term hostel and residents can stay for up to two years.

David Carroll, Depaul’s Director of Services, says that the hostel was set up to tackle “a rough sleeping situation within Belfast”.

There were issues with people suffering from “chronic alcohol difficulties and being accommodated in hostel accommodation”. Carroll says that these people are the most excluded in society.

The Housing Executive provide funding for the hostel and it is included in its overall plan for homelessness in Belfast but the hostel is actually managed by staff from Depaul.

“It was a lot of work getting the building fit for purpose, in the sense that it was designed, structured and set up to work with this particular group,” says Carroll.

He adds: “It was a real challenge at the start to establish the ethos but we have managed to set up a successful approach to our work and it is set in stone now.”

All residents who live in the hostel are referred by the Housing Executive. Individuals can make a homeless application, which is then assessed by a multi-disciplinary team to decide if they meet the criteria for Stella Maris.

“The hostel staff is made up of a team of support workers and each resident has a key worker allocated to them,” says Lawlor. “The key workers support the resident in whatever their needs are but because this is a wet hostel, the biggest focus is on reducing the harm of alcohol.”

While it is a stressful job, Lawlor says it is rewarding: “People come here who have been living on the street for up to 30 years and their life is in chaos. They are sick and beaten down, body and soul. They come here and we try to rebuild them and allow them to make choices without judging them.”

She adds: “When people come here you are giving them a home. We give them security, support and understanding and we care about them. They can leave their problems outside the door and work through them. That’s rewarding for me to see them emerge from chaos to calm.”

While residents are allowed to drink, this is done in a planned and controlled way. For example, some residents are allowed one drink every two hours.

“People are allowed to drink on site but in a dry hostel that level of tolerance is not the same. Although this is a wet hostel it is not managed in a chaotic way, it really is a calm and thoughtful place,” comments Carroll.

While some residents stay for more than two years, Lawlor says there have been plenty of people who have moved on to own their own home.

“We have to be realistic. These people have been drinking for many years and they may never sustain tenancy. Some may move into supportive accpmmodation and some live here longer. But some people have recovered and continue to do well. We look at what is appropriate for them and what their housing need is.”

With budget cuts, Carroll says funding is a concern: “Of course it is a difficult time but we are working closely with the Housing Executive who see this particular unit as part of their overall plan and strategically relevant. We’re hoping that they continue to focus their resources here.”

Down the line, Carroll says he would like to see solutions “in the community for people who want to continue drinking”. However, in the meantime, he says they will continue their work and provide an example to others that “you can work really successfully with this group and there can be positive consequences for individuals if you work with a certain philosophy”.

The Housing Executive has come under intense scrutiny after the launch of two separate inquiries into its conduct and future shape.

Alex Attwood announced a fundamental review of the Housing Executive in an Assembly statement on 11 October. The review will report in March.

This is the first major review of the organisation since its establishment in 1971. By the public sector’s standards, it is a large body, with 3,242 staff, over 90,000 tenants and a budget over £740 million.

Addressing the House, Attwood highlighted the Housing Executive’s past achievements but said the review was necessary to ensure it is fit to discharge its responsibilities for the next two decades and further ahead.

Three phases were outlined:

1. A “broad examination” of the organisation’s current business, including its functions as the province’s strategic housing authority and social housing landlord;

2. External consultants will then look at high-level options for future service delivery, resulting in a proposed model going out for consultation with stakeholders;

3. Development of a “robust” implementation plan.

Attwood emphasised that the state should provide social and affordable housing, a concept questioned by the DUP’s Simon Hamilton who saw room for alternative funding models.

Hamilton’s party colleague, Alex Easton, asked the Minister to consider the possible release of Housing Executive assets to raise funds for new housing and maintenance schemes. Attwood said he was “extremely vigilant” about disposing of assets and had only authorised it once before, where there was unanimous local support. This involved transferring 60 houses to a housing association.

This announcement followed the start of a governance audit into the organisation on 4 October, which is expected to report in November. The audit is being conducted by civil servants from DSD and other departments, and assisted by an external advisor.

It will also report on whether the seven principles of public life are being “implemented effectively” throughout the Housing Executive i.e. selflessness, integrity, objectivity, accountability, openness, honesty and leadership.

The BBC uncovered a dispute between the Housing Executive and contractor Red Sky, lasting from 2007 onwards. Red Sky, it was claimed, had been paid for poor or incomplete work despite Housing Executive staff refusing to sign off on it. Red Sky has denied the allegations.

This internal investigation is focusing on whether the correct structures are in place and whether the Housing Executive board has the available information to identify and manage risk, prevent and detect fraud and hold senior managers to account.

At the Housing Executive’s request, the PSNI is also investigating developer Barry Gilligan’s involvement in a land deal on Nelson Street in North Belfast. Gilligan, who also chairs the Policing Board, denies any wrongdoing.

The Minister told MLAs that police and internal investigations “must be allowed to be completed, and due process must not be compromised.” Paddy McIntyre announced his retirement as the Housing Executive’s Chief Executive on

29 September but has said that this decision was unconnected to any investigations.

“I have confidence in the Housing Executive but that does not give it a licence,” Attwood remarked. He confirmed that three police investigations were ongoing and understood that five internal investigations were also taking place.