The Government has learned of concerning dealings between its state housing provider Kāinga Ora and the private sector - which has played a key role in launching its independent investigation into the agency.

Former Prime Minister Bill English is to head up an independent panel that will review the housing agency, which has assets totalling $45 billion.

Newly appointed Housing Minister Chris Bishop has historically been critical of Kāinga Ora’s financial management and had promised to review its performance within 100 days of the new Government taking office.

He said yesterday when the panel was announced that he had received “worrying advice about the financial situation of Kāinga Ora”.

On Summer Breakfast this morning, Bishop declined to give further detail about what had sparked the investigation, saying as it involved commercially sensitive advice.

However, Bishop revealed a particular area of concern that would be the focus of the review.

"We're concerned about the way Kainga Ora has engaged with the private sector," the Housing Minister said.

"Some of the feedback I've had over the time I've had the housing portfolio is that Kāinga Ora has poor relationships with the private sector that it needs to build on so we want to have a look at that."

Bishop said he's always had concerns about the way the agency had been operating, considering its 2022/23 financials revealed a forecast deficit of $500 million.

"Since we came into office we've received quite troubling reports that confirm for ministers that an independent review is the right course of action," he said.

"I can't release that advice at this time as it's commercially sensitive, but suffice to say it's concerning.”

Summer Breakfast host Tim Dower probed further into why a state housing provider's actions would be considered commercially sensitive, which was a question that Bishop had been pushing Treasury to answer.

Bishop did admit, however, that Kāinga Ora does a lot of private borrowing, which means the advice contained private arrangements could lead to negative implications for the housing agency.

"I don't want to put the Crown at any risk unnecessarily, we're not releasing the advice at this time but we will release that advice in due time when we can publicly."

Dower also asked if English was truly an independent panel head who could be trusted to lead an inquiry.

But Bishop said most people would consider English highly qualified to investigate the books considering his previous roles as minister for housing and finance.

This would mean English would be expected to bring financial acumen to the panel and an understanding of social investment.

Also on the review panel will be Simon Allen, who helped with the ultrafast broadband rollout, and Ceinwen McNeil, who has experience in the construction and urban development sectors.

Bishop said all three bring qualities necessary for the review.

"It's an independent review - it's short and sharp, this is not something that is going to go on forever," he reassured the public.

"We're expecting a report back in March next year and we regard it as a priority, we look forward to receiving [it]."

Dower questioned if this review would throw the security of state housing into limbo for many of the tenants under Kāinga Ora roofs, and asked Bishop if the Government was softening the public up for a bulk sale of state properties.

Bishop denied this would be the case.

"The review is to make sure Kāinga Ora is operating efficiently and effectively. It's important for the Crown's books that it does so, but also for tenants," he said.

"A review is good for tenants and it's good for taxpayers."

Bishop said it was essential the Government had a high level of confidence in Kāinga Ora’s actions.

The terms of reference of the review are expected to be finalised by the end of the week. Asked by the media yesterday if Kāinga Ora was solvent, Bishop had confirmed he was advised it was.