Corporation condemned

The Public Accounts Committee, which is investigating the corporation’s handling of fraud at Focus housing association, gave new corporation chief executive Norman Perry a grilling this week in a hearing which is set to reignite the turf war over the corporation’s regulation.

Committee member Ian Davidson MP said the corporation’s and Focus’ conduct had been "riddled with incompetence".

John Hartshorn, former director of Birmingham-based Focus housing association’s property services department and Keith Hinson, another member of staff, were imprisoned in April this year for a bribery scam in the early ’90s which the committee heard had cost Focus £1.5m.

Property developer Darshan Ram, who paid the men sweeteners to make house sales during a market slump, was also jailed.

The affair resparked the row between the National Audit Office and the corporation over access to housing association accounts. The NAO issued a report which was highly critical of the corporation earlier this summer.

MPs heard this week that it had taken six months for the NAO to get access to key documents held by the corporation.

Giving evidence, the corporation’s chief executive Norman Perry told MPs that the delay was due to surprise at the request, as some documents had already gone to the NAO, as well as a decision to consult the Department of the Environment, Transport and the Regions on the appropriateness of the request.

The Comptroller and Auditor General Sir John Bourn KCB told the committee: "This really smacked of trying to find reasons to keep us out, for subtle bureaucratic reasons".

The corporation was ticked off for not following up irregularities uncovered at Focus. Barry Gardiner MP also criticised the corporation for sluggish implementation of new safeguards recommended by the committee in 1994, which were only completed in 1998.

And MPs expressed concern that the corporation’s chief executive at the time of the fraud, Anthony Mayer was not held to account.

But Perry said detecting corruption was not the corporation’s job: "It’s difficult for regulators to pick up corruption, as this is the role of the (housing association) itself. We are trying to narrow the scope of the system so that RSLs will minimise irregularities, but the regulator is not the person to pick it up," he said.

The committee recommended that the Protection of Public Interest Disclosure Act 1998, the ‘whistleblowers charter’, be extended to the corporation, and that the inclusion of social landlords be considered.

Richard Clark, chief executive of Focus, was criticised by MPs for insufficient checks on Hartshorn once suspicions arose.

"There was a dominant ethos of growth at all costs, where the end was taken to justify the means. The relationship between the board of management and staff were more arms length than was healthy," Clark said.