Who was monitoring LEDU?

Following on from last month’s scathing report into Department of Enterprise, Trade and Investment’s Former Local Enterprise Development Unit, briefly noted here, the Comptroller and Auditor General for Northern Ireland, Mr John Dowdall, today published his report on ‘Into the West: Use of Agents’[download link here] [ITW operated from 1997 to 2004] which focuses its criticism again on LEDU officials – as the press release notes, “It is clear that there were serious failings in the management and control of ITW, at both a Board and an operational level and also within LEDU.”BBC report hereThe press release has this to say about those agents, referencing the report –

ITW operated a network of overseas agents in Australasia and North America, initially focused on encouraging ex-patriates to return home to set up businesses and latterly to establish links with overseas companies interested in investing in Northern Ireland. Agents were involved in business development visits, a major element of ITW’s work costing some £490,000. Fees and expenses paid to agents amounted to a further £277,000.

Of those agents, very few had been interviewed, and fewer still had signed contracts with ITW –

Only 2 of the 18 agents engaged were identified through competitive means and only 4 were interviewed; the Managing Agent was appointed without competition and operated without a contract; there were only 11 contracts with agents, where the Audit Office expected around 33 and only 2 of these had been signed by both parties; and three-quarters of payments to agents were not covered by contracts (paragraphs 2.22 and 2.23).

and on the management of the agents in North America and Australiasia –

On the management and control of agents (Part 3)

ITW’s ability to properly manage and control the activities of agents was substantially undermined by the absence of contracts for most of the time during which agents operated. Even where there were contracts, ITW failed to properly apply a control framework. The absence of performance assessment, combined with a dearth of information reported to the Board, resulted in ITW’s failure to manage its agents effectively. Control was further undermined by a system of remuneration based on retainer fees, without reference to performance (paragraph 3.17).

On payments to agents and performance (Part 4) There was a clear lack of control over payments to agents, the vast majority being made automatically, without any assessment of performance or the fact that conditions of contract had not been fully satisfied. Generally, agent performance was poor – only two bonuses, amounting to £850, were paid in five years and little was achieved in return for the considerable sums of public funds paid out (paragraphs 4.8 and 4.13).

there was also an abortive trip to Australia, which cost £15,500 –

On a postponed visit to Australia in 2000 (Part 5)
ITW was invited to attend an event, the ‘Australian Technology Showcase’ in Sydney, coinciding with the Olympic Games in September 2000. The Audit Office found that ITW’s poor planning of the visit resulted in an avoidable loss of £15,500, caused principally by a ‘book first, recruit later’ approach.

The report also questions the relative value for money of the proposed visit – the principal purpose was to generate publicity for anticipated agreements, rather than the creation of new business. In addition, the majority of the planned participants were not industry representatives, but ITW officials and Board Members, District Council representatives and Northern Ireland local dignitaries (paragraphs 5.4 to 5.7).

And from the Main Findings and Recommendations in the press release –

It is clear that there were serious failings in the management and control of ITW, at both a Board and an operational level and also within LEDU. The report concludes that the Board failed to exercise the level of challenge and control required, but notes that non-executive members of a Board are generally entitled to rely on a company’s executive officers to perform their duties properly. The principal executive officer within ITW was the LEDU Regional Manager – he was founding Company Secretary and played the primary role in the operation, servicing and administration of the company.

At an organisational level, LEDU failed to ensure that it had adequate contractual arrangements in place with ITW when the company was established. It did not strengthen the arrangements over time and it failed to adequately monitor and evaluate the ITW projects and activities which it was funding. In addition, it did not exercise adequate supervisory and management control over its Western Office Regional Manager, which meant that his negligence and poor practice were allowed to continue unchecked.(Executive Summary, paragraphs 4 and 5).

  • wild turkey

    Who was monitoring LEDU? Who was responsible for ensuring ROBUST management systems were in place.? Good questions.

    You would think the permanent secretary of the relevant department (DED now DETI) might bear some responsibility and therefore subsequent approbation? Lets see.

    The perm secretary at the inception of Into the West (ITW) was Mr Gerry Loughran. As his career trajectory demonstrates he has gone from strength to strength. He could not have been responsible for any deficiencies in monitoring ITW or the Emerging Business Trust.

    After leaving the DED Gerry became head of the NORTHERN IRELAND CIVIL SERVICE.

    Although now retired from the civil service Business Eye Autumn 2004 informs us that

    ‘Sir Gerry Loughran must have chosen his chairmanships carefully on his retirement from the Civil Service….and to that end, he must have a penchant for working with charismatic CEO’s in the private sector. Not content with chairing Grafton Recruitment,his other chairman’s role is at Phoenix Natural Gas’

    Want a job in the civil service? HEY PRESTO check out the Grafton Recruitment website, (extract below).

    CIVIL SERVANTS – ARE YOU COMING TO THE END OF YOUR 51 WEEK CONTRACT?

    Grafton Recruitment urgently requires ex-civil servants and experienced clerical staff with or without current security clearance.
    We regularly have vacancies based in Civil Service and Public Sector Organisations throughout Northern Ireland for the following staff:

    … and yes Sir Gerry received the honorary degree of Doctor of Letters for his services to NI public administration. University of Ulster June 2004

    Given the ongoing eminence within which the community holds Dr Loughran mustn’t we conclude that he was NOT responsible for monitoring LEDU? Who then?

    Ever get the sense there might be a self-replicating and self-regarding limited pool of the great and good who, via of unaccountable appointments in both the public and private sectors really pull the strings in NORN IRELAND PLC?

    Oh well, back to my reading for Open University biologoy
    ‘A reduced gene pool means higher rates of inbreeding. Inbreeding among mammals has been known to introduce defects, and these animals will have less variation and survivability in the event of a drastic environmental change. Purebred animals are known to be less ROBUST than their mixed-bred counterparts’

    ‘Don’t much about biology
    Don’t know sociology..
    But I do know that …’

    posted by wild turkey

  • crataegus

    Wild Turkey

    Interesting post and agree with where you are going.

    There is a considerable problem in NI PLC and in my opinion it is where the real discrimination in NI really lies. The unadvertised nominations, (like Alderdice’s appointment) the contracts awarded, the compiling of lists of those to tender etc.

    I was once told by someone that he was ‘honoured’ to have been appointed to carry out a very large series of contracts (no tenders, no advertising), now make no mistake decent fellow and capable but to this day strikes me as more than a little odd. Some have opportunities thrown at them others work dam hard to make ends meet. Always the same types of people, the same value sets, the same clubs, societies and associations. Advancement based more on connections than ability.

    I am mystified is it that you appoint in your circle and they in turn appoint you; is that how it works; a sort of incestuous relationship? We all know what biology has to say about that.

  • Yokel

    LEDU/IDB/Invest NI. Classic who you know not what you know organisations. One well known company in the Belfast area that received in one year nearly 700k from Invest NI. The company was at the same time reporting losses of millions and nearly shut because it had wasted equally large amounts of money in previous years.

    What we see publically is only the tip of an iceberg, at least one IDB/Invest NI board member has had to resign (though it was done with little publicity) because Invest NI had laid out huge amounts of money to the same board member’s own company which was racking up massive losses.

    Invest NI have no interest in supporting business investment to create greater wealth in the local economy. Their entire orientation is publicity, if they can put their names to a bunch of new jobs thats all it wants, even if those jobs last only a few years before moving out again.

    Anybody with any knowledge of economics knows that good long term investment and growth is not just jobs, its about creating actual wealth. Nobody told Invest NI or its predecessors.

  • Crataegus

    Yokel

    Investment and growth is not just jobs, its about creating actual wealth.

    Spot on; We need rid of many of these bodies as (unless there is something I am unaware off) they provide little benefit and some have a negative effect as they waste people’s time. Naive folk who think they are there to help them and their business.

    What would you think of a body that grant aided a developer to build an office block which it them rented from the developer?