You are viewing 1 of your 1 free articles
NIHE to probe direct repairs model one year on from Carillion collapse
The Northern Ireland Housing Executive (NIHE) has launched a report looking into the merits of outsourcing repairs work compared with in-house delivery, as part of a move spurred by the collapse of contractor Carillion last year.
Professor Peter Roberts, chair of the NIHE, told Inside Housing that it had commissioned an independent report that would come up with definitive recommendations on the merits of both approaches, and provide detailed analysis on which option provides the best value for money.
He said he hoped that the work, which is due to be published in April, could inform other housing associations and local authorities and help them with future decisions about repairs.
The NIHE was the housing provider worst hit by the Carillion collapse, and held contracts worth approximately £45m a year. This included a £38m-a-year maintenance deal, a £7m heating deal, and a legionella and mechanical and electrical services contract worth £900,000 a year.
All the contracts were transferred to rival contractor Engie in February, which is now completing these deals.
READ MORE
Professor Roberts said the Carillion episode had encouraged him to push for an independent cost-benefit analysis of repairs approaches to see where insourcing and outsourcing works best.
The executive has now commissioned the Northern Irish government’s Business Consultancy Services, which is an independent consultancy arm within the Northern Irish Department of Finance.
The work will initially entail a desk-based analysis looking at the effectiveness of in-house and contracted services. The scope will then widen, with the study benchmarking against other major housing associations across the UK.
Professor Roberts said: “What we can do here is put a real figure to the cost of outsourcing. We can get real costs here – real figures – and that’s what I want. I don’t want opinion, I want fact.”
He added that the move had so far attracted a lot of attention from housing associations but also the contractors that carry out the work.
NIHE’s drive to look for more cost-effective solutions to repairs comes as the body faces major shortfalls in funds for improving its homes.
In October, Inside Housing reported that nearly half of its 86,500 homes could be left to fall into disrepair from 2020 if it does not secure extra funding.
The landlord currently takes £290m a year from its rent, which has been frozen since 2016, leading to major funding shortfalls.
The NIHE came under criticism from Northern Ireland’s Specialist Engineering Contractors’ Group for contracting Carillion to the repairs contracts just months before the collapse.
Commenting on the Carillion episode, Professor Roberts said that while the transfer of the contracts had been “seamless”, it had cost money particularly for the legal and advisory fees to assist with transferring the contract over.
