A group has been set up to oversee change within the Housing Executive after a report identified weaknesses. Emma Blee takes a look at its findings.
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.
