Derry’s missing millions

Ebrington Square.
Ebrington Square.

The Office Of the First and Deputy First Minister accused Ilex of failing to spend millions of pounds allocated to develop Ebrington over the past five years.

The ‘Journal’ has obtained copies of documents and messages from the offices of First Minister, Peter Robinson, and Deputy First Minister, Martin McGuinness, relating to the performance of Ilex and the Ebrington Site from September, 2014 to October, 2015, through the Freedom Of Information Act.

The Deputy First Minister, Martin McGuinness pictured with Philip Flynn, Chair of Ilex and Mel Higgins, former Chief Executive pictured at the completion of a �5.5million capital project at Ebrington in November 2014.'(Photo Lorcan Doherty Photography)

The Deputy First Minister, Martin McGuinness pictured with Philip Flynn, Chair of Ilex and Mel Higgins, former Chief Executive pictured at the completion of a �5.5million capital project at Ebrington in November 2014.'(Photo Lorcan Doherty Photography)

One letter dated May 15 2015 from Mark Browne, Accounting Officer with Ilex’s parent department, claimed that last year alone Ilex under spent its budget to the tune of £666,000 and ‘surrendered’ another £1.7m.

In the letter addressed to the Chairman of Ilex’s Board, Philip Flynn within Ilex, Mr Browne, states: “In total Ilex had already surrendered £1.7m capital through monitoring from the opening budget of £4.833m.

Taking account of surrenders and projected underspend this equates to 48% underspend compared to Ilex’s opening budget.

“In addition it is now clear that Ilex will have spent £16.5m out of the £23m made available in the Comprehensive Spending Review for the development of the Ebrington site.

“As you are aware, investment in Ebrington is much needed in order to provide jobs and opportunities within Derry-Londonderry. Ilex’s failure to utilise all of the budget made available is a serious loss for the city.”

Mr. Browne goes on to state that the level of alleged underspend during the 2014/15 financial year “raises grave concerns” over the ability of Ilex to develop Ebrington on behalf of OFMDFM.

“This would be serious at any point but especially so in the current financial climate,” he adds.

In another letter from Mr. Browne to then Ilex Chief Executive, Mel Higgins and dated the same day, similar concerns are raised, as well as concerns that business cases submitted for various projects by Ilex had had to be worked on.

Mr. Browne states in this second letter: “Given the significant slippage in your spend last year and the fact that only one business case for the forthcoming year has been submitted (one that regrettably will result in no spend in 2015/16, even if approved), I am understandably concerned about Ilex’s ability to utilise this budget.”

He goes on to set a two week deadline for a “realistic plan” to utilise “the entire £2.8m available to Ilex” for 2015/16 from the date of the letter.

Responding to Mr. Browne in a letter dated May 29th 2015, Mr. Higgins said that Ilex’s financial procedures were operating effectively, as supported by independent audit assurance.

Mr Higgins said: “The issues that arose at the end of 2014/15 financial year were unforeseen events.

“In relation to the opening capital budget for 2014/15, I wish to outline the agreed position on the matter. The Car Park Project required additional budget cover of £1.7m in 2013/14 and this was secured from OFMDFM with the £1.7m to be recovered from the Ilex 2014/15 capital budget.”

Mr Higgins attached a copy of a letter to his predecessor Aideen McGinley dated October 5, 2012 confirming this position.

“We followed this instruction and advised you of this at our Board meeting on March 27th, however, there does not appear to be any reflection of this agreement in your letter,” Mr Higgins added.

He went on to claim that over the two years, from April 2013 to March 2015, £8.763m of capital was spent out of an opening allocation of £9.2m, an underspend of just 4.75%.

Mr Higgins also said: “In 2012 over £5.5m was returned in capital due to the clock tower and Maritime Museum not progressing, both documented and advised to OFMDFM at the time.”

Mr. Higgins expressed concerns that Departmental discussions advise that no capital projects are allowed to start in the current 2015-16 year that cannot be finished within that year.

“The very nature of regeneration projects, as with many capital projects is that they straddle more than one financial year,” Mr Higgins said.

Mr Higgins said that six business cases for projects were to be submitted within weeks and requested the “full commitment” of Mr. Browne and his team “to endeavour to turn these projects around in realistic time frames” and work to ensure the projects spend their full allocations in 2015/16.

Mr. Higgins also said he had developed a pipeline of projects, over-committed the budget and intended to provide a monthly assessment of deliverability of the projects.

He also said that he could “categorically state that with the introduction of the casework committee, the quality of cases has improved within Ilex.”

He goes on to state that OFMDFM had moved to retain commercial income, stating this was “most concerning”.

“Withdrawing the commercial income from the site undermines its long term sustainability and goes against the fundamental principle of regeneration,” Mr Higgins states.