Press release

Serious breaches found in spending by Social Enterprise North West

Department for Communities and Local Government issues demand notice to claw back £1.4 million of taxpayers’ money.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

A demand notice has been issued on Social Enterprise North West (SENW) to recover £1.4 million of public money after serious irregularities in its accounts were uncovered.

The money forms part of a grant given to SENW to run a business advisory service in Liverpool called the Big Enterprise in Communities project (BEiC).

Launched in January 2012, the project, run by SENW together with 17 supporting organisations, received a total of £3.79 million from the European Regional Development Fund, administered by the Department for Communities and Local Government (DCLG) on behalf of the British taxpayer.

However in July 2014, an audit carried out by the Audit Authority in accordance with European Commission rules identified serious breaches in the project’s accounts.

Under the terms of European grant funding, SENW is required to show how all public money it has received for the BEiC project has been spent.

Failure by the SENW to do so has forced the DCLG to take action to recover the money, by issuing a demand notice.

Communities Minister Lord Ahmad said:

I accept that European Commission rules can be very bureaucratic but in this case they are perfectly clear – failure to provide evidence of how money is spent puts the funding at risk.

The DCLG has a clear obligation to make sure every pound of taxpayers’ money is properly accounted for. It is totally unacceptable that SENW cannot provide proper accounts for £1.4 million worth of public money.

The DCLG’s demand notice will not seek to reclaim any of the money from BEiC’s 17 supporting organisations, who operated in good faith throughout.

With just 6 months of the grant funding to go, the BEiC project has already exceeded initial expectations – providing 3,128 businesses with start up support in Liverpool and the surrounding area.

Anyone thinking of starting up a business in the area should contact the new Advice Finder Service, run by Liverpool City Region Local Enterprise Partnership. It can provide details of 75 other business advisory agencies in the area delivering more than 300 services.

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Published 26 November 2014