PRESS RELEASE
3 July 2008
PR/19/07/08
EMBARGOED UNTIL 00.01AM ON THURSDAY, 3 JULY 2008
RURAL COTTAGES PROJECT COSTLY AND POOR VALUE FOR MONEY
The Northern Ireland Tourist Board’s Rural Cottages Project was an exceptionally good deal for the cottage owners but costly for taxpayers. That is the main finding of the Public Accounts Committee in their report, The Northern Ireland Tourist Board—Contract to Manage the Trading Activities of Rural Cottage Holidays Ltd1.
The Report addresses two main areas of concern: the Tourist Board’s involvement in a commercial venture, using public funds and the short comings in the way a senior official’s conflict of interest was dealt with.
Committee Chairperson, Paul Maskey, MLA said, "The Committee believes that the positive financial outlook which had been painted for this venture at the outset in the 1990s was even less realistic then that it appears today. At no stage was the company ever likely to be commercially viable.
"The Tourist Board locked themselves into an ongoing agreement whereby public money was used to renovate rural cottages and gave significant benefit to the cottage owners.
"To date, over £500,000 has been spent on maintenance. The Tourist Board has told the Committee that it now has an exit strategy to negotiate the termination of the leases. Without this, the taxpayers will be maintaining these cottages until the 21 year leases expire, when these properties will revert to the owners.
"It is clear that these arrangements did not provide value for money and were packaged in a way that makes it difficult for the Tourist Board to renegotiate."
Speaking about the issue of conflict of interest, Mr Maskey said, "Good governance has been a major theme of the Public Accounts Committee in its first year. The effective and transparent management of conflicts of interests has been a key aspect of this work. This is not rocket science. It is simply a basic principle of good public administration.
"This case demonstrated the need for chief executives of arm’s length bodies to provide clear leadership on ethical issues. The Committee believes that it is essential that they recognise the dangers of conflicts, actual or perceived and get to grips with them as soon as they come to light. If this does not happen, it can lead, as it did in this case, to charges of undue favoritism.
"The Committee therefore has a clear and unambiguous expectation that corporate governance within Departments and Arm’s Length Bodies will improve during the life of this Assembly. Recurrent mistakes will simply not be tolerated. The lessons learned from this report, therefore, need to be communicated and promoted throughout the public sector."
Notes to Editors
- Standing Orders under Section 60(3) of the Northern Ireland Act 1998 have provided for the establishment of the Public Accounts Committee (the Committee). The main statutory function of the Committee is to consider accounts and the reports by the Comptroller and Auditor General for Northern Ireland (C&AG) laid before the Northern Ireland Assembly.
- The C&AG is head of the Northern Ireland Audit Office (NIAO) and is empowered to investigate any area of expenditure and has a statutory right of access to all files and papers in Departments and public bodies.
The PAC Committee members are:-
Alliance |
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Democratic Unionist Party |
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Mr Jim Wells3,4,5 |
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Sinn Fein |
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Social Democratic and Labour Party |
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Ulster Unionist Party |
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Progressive Unionist Party |
1 With effect from 04 March 2008 Mr Thomas Burns replaced Mr Patsy McGlone.
2 With effect from 20 May 2008 Mr Paul Maskey replaced Mr John O'Dowd.
3 With effect from 1 October 2007 Mr Mickey Brady replaced Mr Willie Clarke.
4 With effect from 21 January 2008 Mr Ian McCrea replaced Mr Mickey Brady.
5 With effect from Tuesday 27 May 08 Mr Jim Wells replaced Mr Ian McCrea.
Media enquiries to:
Debra Savage,
Information Office, Parliament Buildings, Belfast. BT4 3XX
Tel. 028 90521405 Mobile 07920 864221
Email: debra.savage@niassembly.gov.uk Website archive.niassembly.gov.uk
1 Rural Cottage Holidays Limited is a wholly owned subsidiary of the NI Tourist Board (NITB). NITB retains a leasehold interest in 11 formerly derelict cottages which it renovated in the 1990s into self-catering holiday accommodation. £1.6 million of public and European funding was made available to Rural Cottage Holidays Ltd. Owners contributed 10-20% of the renovation costs of each of the 11 cottages. Subsequent financial support has been provided since then by the Northern Ireland Tourist Board. At the end of the 21 year leases, ownership of the cottages will revert to the original owners.