Innovation Fund's lost £1.4m still unlikely to be repaid six months later

Wednesday 16 August 2017

£1.4million of loan and interest payments for the Innovation Fund still appear to be at risk of never being repaid half a year after a damning report into the ill-fated fund was published.

The Jersey Innovation Fund (JIF) was set up in 2013 using £5million of public money to fund six local start-up companies in a government bid to help kick-start and diversify the economy following the recession.

In January, however, a damning report from the Comptroller and Auditor General suggested that the Fund was mismanaged and revealed that as much as nearly £1.4million of those payments were overdue, and so potentially wouldn't be recovered, with one company – Logfiller – having gone into liquidation.

The critical report read: "...Seven loans totalling over £2 million have been made to six borrowers. At the end of December 2016 only 26% of payments due had been received and one borrower was the subject of a winding up order. The provision for doubtful debts was £692,000 at 31 December 2015 increasing to £1,383,000 at 31 December 2016."

But an Express request under the Freedom of Information (FOI) law showed that the States may not be clear on exactly how many repayments remain overdue and still in doubt of ever being recovered, as the 'official figure' of £1.4 million identified in the States of Jersey accounts as at 31 December 2016 was still yet to be revisited by the end of June. As a result, the public are still yet to find out - and potentially members of the States themselves - how much of the outstanding money has been paid back, if at all.

A States spokesperson commented: “The provision for doubtful loan and interest repayments is unchanged because it is an official figure, recognised in the States of Jersey’s year end accounts. This official figure will be reviewed and formally adjusted in the coming months in preparation for the publication of the 2017 accounts.  

“In recognition of Recommendation 5 of the Comptroller and Auditor General’s report on the Fund, ongoing routine monitoring of debt recovery has been significantly increased and the adequacy of the provision for doubtful debts is also being reviewed regularly on an informal basis.”

Despite JIF’s failings, one company did celebrate success this summer: St Mary resident Catherine Curtis’ BabyHub, an award-winning cot company.

Pictured: BabyHub's Catherine Curtis, who successfully repaid her £60k loan this summer.

In July, it was revealed that she paid off her £60,000 of States borrowing, which allowed her to finish development and start promoting the product.

Speaking of the company’s success at the time, a BabyHub spokesperson thanked, “…the people of Jersey for helping to fund creative businesses.” 

Richard Corrigan, Chief Officer of the States of Jersey Financial Services, added: “It is great to see this sustainable business going from strength to strength after having received a loan from the Jersey Innovation Fund. Congratulations to Catherine and her team, and we look forward to the continued success of their business.”