The legal battle surrounding one of Invest NI’s flagship programmes has been settled, it emerged today.
An investigation by The Detail in February found that the Business Start up Scheme – a programme set up to deliver a lifeline to Northern Ireland’s struggling entrepreneurs – had been inactive for almost six months after becoming embroiled in a legal dispute over who should run it.
Court hearings began in early March. However with legal costs growing by the day, it has been confirmed that the legal challenge is now over and the disputed contract decision has been reversed.
Enterprise Northern Ireland (ENI), the group who formerly run the programme and were challenging Invest NI over the legitimacy of the tendering process, and Invest NI released a joint statement this morning to confirm that the legal processes have ended.
The statement says: "Enterprise Northern Ireland can confirm that the legal action with Invest NI has been concluded.
“The legal challenge and current trial are taking much longer than all parties anticipated. Both ENI and INI are concerned that the delay continues to impact adversely on the provision of a full business start support programme for those members of the public who may be interested in starting a business.
“As the proposed contract under scrutiny would only run until September 2013, any further delays would have a detrimental impact on the logistics of organising and introducing a new service of this type.
“On this basis, the parties, whilst continuing to differ in their views in relation to the issues raised in the litigation, have agreed that INI will terminate the current procurement process, and that the legal action will end, on the basis that INI will be going back out to the market with a revised proposal for the provision of a business start service."
The outcome of the action is that the decision to award the Business Start-up Programme contract to the Scottish based GO Group and the Belfast offices of KPMG will now be reversed.
The Start a Business Programme had been previously run by consultancy company Enterprise NI (ENI), who had run similar programmes for Invest NI for over 20 years.
ENI is the organisation representing the network of Local Enterprise Agencies in Northern Ireland.
Under the banner of the new Business Start-up Programme they were awarded the contract by Invest NI in April 2009 to run The Enterprise Development programme. It consisted of two main elements:
• The Go For It Programme, targeting individuals who are considering starting a business.
• And the Growth Programme, aimed at established companies with the ability to expand through exports.
In September 2011 it emerged that the £5m contract had been awarded to accountancy firm KPMG in partnership with Scottish-based company The Go Group. KPMG had previously been commissioned by Invest NI to carry out an audit of their work from 2006 to 2011.
Following the decision surrounding the contract Enterprise NI issued a statement of claim against Invest NI and the Department of Finance and Personnel in relation to “the award of the contract for the management and delivery of the ‘start a business programme’ whereby it awarded the contact to the Go Group.”
A declaration was made by Enterprise NI citing that the decision was unlawful and reached in a manner that was in breach of the requirements of the Public Contracts Regulations and EU law, as well as the tendering contract between them and Invest NI.
As a result the scheme was left inactive, but at the time Invest NI made it clear that it had no intention to exclude the Go Group from delivering the Start Up Programme.
During the legal proceedings in March, David Schofield QC, representing Enterprise Northern Ireland (ENI) told the high court “the guillotine fell” on the programme when legal action was initiated and added that what was being delivered by Invest NI was not the scheme that was intended and described it as “not ideal.”
Invest NI previously told The Detail that in the absence of The Go For it programme there was still an interim service run by existing Invest NI staff that provided “one to one advice, business clinics and business plan support and is delivered through Invest NI’s Regional Office network.”
We found that from September 2011 to February 2012 Invest NI continued to advertise the Go For It brand at a cost of a quarter of a million pounds, with a combination of media placement (£227,972) and media production (£21,902).
With the legal proceedings now settled Invest NI will begin a new a tendering process for the multi million pound contract.