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Charity organisation Pact Group backs out of Invercargill social housing contract

Friday 27th May 2016

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Dunedin-based charity organisation Pact Group has backed out as the sole bidder to buy and manage 348 state houses in Invercargill, putting the government's planned tender on hold and delivering a political blow to its social housing devolution project. 

Finance Minister Bill English and his associated Paula Bennett said Pact withdrew from the process because the deal wasn't the best way to achieve their goals, and as the only party short-listed, that procurement has been put on hold. Pact provides services for more than 1,600 people with intellectual disabilities, recovering from mental illness, and those with addiction problems across the West Coast, Otago, Southland and Dunedin. 

"While I am disappointed that Pact is no longer participating in the Invercargill transaction, their decision should reassure social housing tenants that the process is robust and that interested parties have enough information to make the best decision for themselves and the tenants," Bennett said in a statement. 

The government wants to sell down a proportion of its Housing New Zealand stock and overhaul the agency's property portfolio of 65,000 homes, many of which it's deemed to be unsuited to tenants' needs. Tauranga and Invercargill were the first tenders where registered community housing providers could bid to buy the properties and manage a range of social services for the tenants. 

The procurement for 1,134 properties and tenancies in Tauranga is still under way, Bennett said. The three groups bidding for that contract are one group led by UK housing provider Pinnacle Community Housing, a second consortium managed by HRL Morrison & Co, and social housing provider Accessible Properties, a subsidiary of IHC, which provides services to people with intellectual disabilities. 

English and Bennett also said the government is considering a proposal by Horowhenua District Council to look at a joint transfer of 115 council flats and 250 state houses in Foxton, Levin and Shannon to a community provider. The government is consulting local iwi until July 1, and will outline a proposal with the local body if those talks are positive.

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