Housing associations built no homes despite £9m in public grants
ALMOST £9 million of public grants to housing associations in Northern Ireland did not result in any social houses being built, a watchdog has said.
The public funding was received by the Helm and Trinity housing associations.
Helm did not use land at Great Georges Street in Belfast purchased using public money, the assembly's Public Accounts Committee said.
Trinity also failed to build on land at Crossgar in Co Down – and threatened legal action when Stormont asked it to return the grant.
Sinn Féin's Michaela Boyle, chair of the committee, said: "It seems clear from the evidence given to the committee that prior to then the scheme was wide open to abuse."
Housing associations receive grant funding from the Department for Social Development (DSD) to develop new social housing.
In the last three years the department has paid to housing associations £308 million in grants, and this has been even higher in the past.
The Inquiry into DSD Advanced Land Purchases looked at how the DSD provided money to associations.
Two grants to Helm and Trinity housing associations with a combined value of £8.9 million resulted in no social housing being built, the investigation found.
Ms Boyle added: "We were also extremely concerned that not only did Helm not use land at Great Georges Street purchased by a department grant of £8.1 million, a third party was able to buy the land at a lower price and then sell it to Helm – netting the third party a profit of £3.25 million within 24 hours.
"This is completely unacceptable and has never been explained, despite being investigated."
Ms Boyle said the committee is "hugely disappointed" that it will take 10 years to have the grant repaid, and that no interest is being charged.
A spokesman for Helm Housing said: "In the years following the purchase of land at Great Georges Street, Helm Housing's entire board and senior management team have been replaced."
"The organisation subsequently reached a settlement agreement with the department and was reinstated to the social housing development programme in October 2013. Currently 120 homes are under construction and we remain committed as a not-for-profit social enterprise to developing high quality social and affordable housing across Northern Ireland."
In a second case, involving Trinity, a grant of £800,000 was given in 2008 to develop housing in Crossgar.
No social housing was ever developed due to problems in gaining planning permission.
But when the department requested that the grant be repaid in 2012, Trinity threatened legal action to retain the funds.
Ms Boyle said: "The committee views Trinity's decision to threaten legal action as unacceptable because the association had a public duty to repay the grant when it had not been possible to progress the development.
"We are also appalled that the agreement to recover the grant, which was only reached in 2015, allowed Trinity to retain £200,000 to cover expenses incurred at the site even though no development had taken place.
"Again no interest has been charged to the association."
The PAC has also expressed concern over a potential conflict of interest involving Trinity's chief executive Arthur Canning.
Trinity registered an interest with the Housing Executive for building at a site in Newtownards in 2007.
It later bought the Crossgar site from a developer who was attempting to assemble the land for the Newtownards site for £885,000.
The same developer then purchased a house owned by Mr Canning's brother as key access land to the Newtownards site.
It was bought for £700,000, compared to just £380,000 paid in 2008 for the house next door.
Mr Canning insisted he was unaware of Trinity's interest in the Newtownards site until it was raised by newspaper reports in 2009.
However, the PAC report said his evidence to the committee was "completely lacking in credibility".
Ms Boyle added: "Even after the issue was brought to the association's attention in 2009 it was not handled properly by either the chief executive or the chair of Trinity."
Trinity merged with Oaklee in July 2014, which then merged with Ulidia in June this year to form Choice Housing Association.