Innovation Fund: £340k outstanding as probe enters second year

Friday 08 February 2019

Over £340,000 of money loaned under the ill-fated Innovation Fund was still owed to the government at the end of last year, it has emerged as the investigation into whether there was criminal activity hits its second year.

The Fund was set up by the States in 2013, with £5million of taxpayers' money, in a bid to help diversify and grow the economy after a deep global recession, with a Board made up of private sector individuals and States officers.

But a damning report by Comptroller and Auditor General Karen McConnell found serious flaws in the governance of the fund, which she said could lead to a potential loss of up to £1.4million of public money made up of overdue loan repayments.

Her concerns sparked a Police investigation in February 2017, with one start-up company – software firm Logfiller – coming under intense scrutiny for banking around £500,000 of taxpayers’ cash before vanishing from Jersey.

Pictured: The Innovation Fund was set up with £5million of public money to help fund start-up companies and grow the local economy.

Two years later, the investigation remains ongoing – the Police probe has concluded, but the Attorney General is investigating whether the matter should be brought to court - and, as of 31 December last year, £342,958.16 was still owed to the public.

It is unclear whether this sum which was revealed in a response to a recent Freedom of Information (FOI) request, is owed by Logfiller or another company.

The latest update on the disappeared software firm came in October last when government officials told Express they had recuperated a “modest sum” from the company under investigation, but refused to disclose how much.

Responding to the figure released in the FOI response, a spokesperson said: “We will not discuss individual loans in order that we can best protect the commercial interests of the States of Jersey and the economic interests of the borrower. Combined, these are accretive to maximising the return of taxpayer resources previously committed through the Jersey Innovation Fund.”

Pictured: A Police investigation into the Innovation Fund has been underway since February 2017.

They later added: “We will continue to report on the Jersey Innovation Fund through the States of Jersey Annual Accounts and if appropriate to do so, when a significant event occurs. An example of this maybe on successful redemption of a loan when, with the borrower’s permission, we may discuss that in more detail.”

A spokesperson for the Law Officer’s Department said they were “unable to comment on ongoing investigations”.

Despite the ongoing investigations into the fund, two of the businesses supported by it continue to thrive.

Rupert Langly-Smith’s Proviz, a reflective clothing company that received a significant loan, celebrated in December winning Micro Business of the Year at the Amazon Growing Business Awards.

Pictured: Two of the Innovation Fund's success stories.

Meanwhile, Catherine Curtis of Stumpydog Innovations, which was the first to be awarded a loan from the fund of £60,000, is going from strength to strength with her product, portable cot BabyHub.

The product has won several awards and accolades and is now being stocked nationally.