Northern Ireland news

£10m Covid funds wrongly paid out still not recovered

Less than £2m of the £13.5m paid out under Stormont's Covid support scheme for small businesses has so far been recovered.

More than £10 million wrongly paid out under a Stormont scheme to help small businesses affected by Covid has yet to be clawed back.

An audit office probe of the executive’s Small Business Support Grant Scheme has identified major shortcomings with last year’s delivery of up to £245m of emergency funding. An estimated £13.5m was paid to ineligible recipients, the report published today finds.

Among those who shouldn't have received the emergency funds were wind turbine owners, landlords renting premises to eligible firms, and many companies that were paid twice.

Less than £2m of the ineligible payments have so far been recovered and it remains unclear how much money will ultimately be recouped.

The shortcomings in the Stormont executive's Small Business Support Grant Scheme are exposed in a report published today by Comptroller & Auditor General Kieran Donnelly.

The scheme was launched in March last year in response to the first period of coronavirus lockdown.

In October last year, former Sinn Féin MP Elisha McCallion was forced to quit as a member Seanad after it emerged that she had received a payment of £10,000 under the scheme. Unnamed party officials in Co Armagh and Co Tyrone were also reported to have resigned after the amounts were wrongly paid to constituency offices.

Designed and delivered jointly by the Department for the Economy (DfE) and Land & Property Services (LPS), it provided one-off emergency grants of £10,000 to small businesses to help ease the threat of closures at the start of the pandemic.

However, the spending watchdog reveals that the scheme was hastily designed and while it's conceded that under the circumstances "it was inevitable that issues would arise", the requirement that "lessons were learnt" is also stressed. There were just eight days between the scheme being announced and the first payments being made.

The report says staff developing the scheme "lacked key resources needed to properly facilitate remote working". It notes that "serious concerns" about value for money and fraud risks were raised by DfE’s permanent secretary, who requested a ministerial direction be agreed by the then first minister Arlene Foster and Deputy First Ministers Michelle O'Neill, enabling civil servants to proceed with the spending proposal. The report notes that many of the concerns raised by the DfE permanent secretary came to pass.

According to the auditor, most but not all of the ineligible payments arose of a result of reliance on out of date or inaccurate data. To date, officials have recovered £1.76 million that should not have been paid.

Mr Donnelly said it is important to recognise that the scheme was designed and launched under "exceptionally challenging circumstances and at an extreme pace".

“Nonetheless, it is important that the lessons identified in my report are learnt and taken on board," he said.

"In particular, I want to highlight the importance of a collaborative approach in developing similar schemes in the future. Better early engagement across departmental boundaries and with business representatives would have helped the department target support to those most in need."

The comptroller & auditor general said a "small amount of additional time" at the design stage may have provided more protection to public funds and helped reduce the need for changes to the eligibility criteria after the scheme had launched.

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