No clear paper trail for millions awarded by Stormont ‘slush fund’

Former First Minister Peter Robinson is pictured in 2009 with the former Deputy First Minister Martin McGuinness at Stormont castle. Picture credit: Charles McQuillan/Pacemaker.
Former First Minister Peter Robinson is pictured in 2009 with the former Deputy First Minister Martin McGuinness at Stormont castle. Picture credit: Charles McQuillan/Pacemaker.

A Stormont fund set up to tackle deprivation has come in for serious criticism from auditors over the way tens of millions in public money was dished out to various community projects.

A report published today by the Auditor General Kieran Donnelly found that there is no clear paper trail, referred to as an “audit trail”, for the way the huge sums of cash were awarded by the Social Investment Fund.

Former Ulster Unionist leader Mike Nesbitt has now branded the fund “another RHI”, while the Alliance Party are calling for an independent inquiry.

The report from the Northern Ireland Audit Office criticises the way conflicts of interest were handled during the initial stages of the £93 million funding programme, and said that the way the scheme itself was designed meant conflicts of interest were “inevitable”.

The Social Investment Fund, set up by the former First and Deputy First Ministers Peter Robinson and Martin McGuinness back in 2011, decided which projects to award money to through ‘steering groups’.

These groups were made up of volunteers from the business, political, statutory and community sectors. The final appointments were made by the First and deputy First Ministers in September 2012.

The Northern Ireland Audit Office report identified three examples where there was a conflict of interest that wasn’t declared.

It also found “18 voluntary and community groups which received capital funding from a steering group and which also had a director, trustee or employee who was a member of that group.” These 18 groups received capital funding worth more than £12 million in total.

Auditor General Kieran Donnelly said: “The guidance produced by the Department was inadequate, there was little evidence that procedures were followed, and a number of conflicts weren’t declared. This is very concerning.”

The report makes seven recommendations.

It highlights a number of projects as concerning.

One such example was the redevelopment of a derelict site on Bryson Street in east Belfast, wherein £1 million was awarded to build a new health centre.

The owners, a charity, put in a fifth of that — £200,000 — but the site is now being rented to public health authorities at a cost to the public purse of £90,000 per year.

“In our view, this does not represent value for money,” the auditors write in their report.

In another project, £3.3 million was awarded for a a training and employment project in west Belfast known as ‘West Belfast Works’.

The auditors highligted concerns about the “eligibility criteria” for the project.

“It is concerning that eligibility criteria were not fully understood at the outset,” the authors of the report state.

It is not the first time the Social Investmentfund has come in for criticism. Even before it was set up, the UUP had warned there was a danger it would be viewed as a “slush fund”, while the Alliance Party had called for a “root and branch reform” during an Assembly debate in 2016. That proposal was voted down by Sinn Fein and the DUP.

The Assembly debate followed a row over the role of convicted armed robber Dee Stitt, who denies being a UDA chief (though admits having been a UDA member prior to the group being proscribed), as chief executive of a charity (Charter NI) awarded a contract to manage £1.7 million from the fund.

A spokesperson for The Executive Office said: “The Executive Office accepts all the recommendations in the Northern Ireland Audit Office report on the Social Investment Fund, in particular those relating to documentation and management of conflicts of interest and a detailed response will be published in due course.

“The Executive Office recognises that there were shortcomings in the early stages of SIF and welcomes the acknowledgement by NIAO that once projects became established, governance improved. The report also identifies completed projects where outcomes to date are promising and value for money is likely to be achieved.”

TUV leader Jim Allister, meanwhile, said: “I consistently warned the SIF did not represent value for money rather it was all too often a slush money used to fund groups favoured by the DUP and Sinn Fein.”

He added: ““If RHI is a DUP scandal this one is very much a joint effort with their then partners in Sinn Fein.

UUP MLA Mike Nesbitt said the concerns raised by the Auditor General show the “systemic issue with the DUP and Sinn Fein” as he likened the Social Investment Fund to the botched Renewable Heat Incentive scheme.

“It’s a very damning report which vindicates the concerns we had raised,” he told the News Letter.

“Before the Social Investment Fund even came online, we pointed out that there were serious flaws. We particularly highlighted our contention that the First and Deputy First Ministers should not have the power to appoint panel members to the advisory panel, the steering groups.

“We said if you do that you create the perception that SIF is a slush fund. We used those exact words.”

He continued: “What this proves is that RHI wasn’t a one-off. This is a systemic issue with the DUP and Sinn Fein at Stormont Castle running the devolved government.

“It’s the lack of openness, the lack of transparency, the willingness to ignore best practice in terms of government and to instead simply operate in the best interests of the two parties.”

Mr Nesbitt added: “It’s another RHI, it’s the same issues.”

AllianceMLA Chris Lyttle, who said he had referred the Social Investment Fund to the Audit Office, is now calling for an independent inquiry.

“Whilst some organisations may be delivering good outcomes on several projects, SIF has been characterised by a lack of transparency and delivery since its inception,” he added.