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Gorst's Innovation Fund fiasco letters released

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LETTERS sent by the Chief Minister to two senior ministers expressing 'disappointment' at the part they played in the Jersey Innovation Fund fiasco have been made public following a freedom of information request by the JEP.

In the messages, Senator Ian Gorst sets out the errors made by Treasury Minister Alan Maclean and Economic Development Minister Lyndon Farnham.

The fund was set up to provide grants to start-up businesses but is now frozen after the Comptroller and Auditor General concluded that there had been a catalogue of failures with how it was established and run.

It is estimated that more than £1.4 million of taxpayers' money given out from the fund may never be recovered.

In the letters, Senator Gorst says that Senator Farnham added to a 'period of confusion' about political responsibility that Jessica Simor QC, who carried out an independent review into the role of politicians in the fund's failure, had concluded caused problems.

Senator Farnham, the letter says, should have recorded the decision to delegate responsibility for the fund to his assistant minister Senator Philip Ozouf in writing. He also did not report the delegation to the States.

Senator Ozouf stood down as Assistant Chief Minister with responsibility for finance, competition, digital and innovation in the wake of the CAG's report.

THE LETTERS IN FULL:

Dear Senator Alan Maclean,

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Re: Innovation Fund - Review of ministerial responsibility in relation to the Jersey Innovation Fund

I refer to the report of Jessica Simor QC concerning the above and, in particular, paragraphs 150 to 156.

The report does not identify any express breach of the Code of Conduct and Practice for Ministers and Assistant Ministers (R11/20015) in relation to your conduct, or its predecessor the 2006 Code of Conduct for Ministers (the "2006 Code").

However, the report highlights that in 2014 (when the provisions of the 2006 Code applied) the remuneration of the Chair of the Jersey Innovation Fund ("JIF") involved a clear departure from the JIF Operational Terms of Reference and occurred a number of months prior to approval by the States Assembly. The relevant findings are as follows:

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Paragraph 154 - "there is therefore clear evidence that the relevant Minister had agreed to – and even proposed – the remuneration of the Chair despite the absence of a basis for this in the OTRs';

On the other hand, paragraph 152 states that emails concerning the States decision that the Board should not be remunerated and the need for a formal ED Ministerial Decision appear not to have been passed on to you. Further, paragraph 155 of the report indicates that you frankly acknowledged that you took responsibility for not adhering to the details of the proposition, which is indicative of a positive attitude towards ministerial accountability. I also note that you cooperated fully with Ms Simor QC's review.

As I mentioned in the Assembly on 2nd May 2017, Ministers are generally responsible for policy and offices for implementation. In this case implementation has failed to deliver the desired policy outcomes. I accept that you were not personally responsible for any aspects of the implementation of the polices referred to in the report, save to the limited extent set out in this letter.

However, political oversight of implementation of this and other polices needs to be a greater focus for Ministers, and this is a matter which I will canvassing with all Ministers.

Yours sincerely

Senator Ian Gorst

Chief Minister of Jersey

Dear Senator Lyndon Farnham,

Re: Innovation Fund - Review of ministerial responsibility in relation to the Jersey Innovation Fund

I refer to the report of Jessica Simor QC concerning the above and, in particular, paragraphs 8-16 and paragraphs 71 to 116.

Ms Simor QC found that you had legal responsibility for the Jersey Innovation Fund from 12th November 2014 until 31st December 2015. You delegated your statutory powers in relation to JIF in December 2014. You did this before the issues of the Code of Conduct and Practice for Ministers and Assistant Ministers in February 2015 which provides that Ministers and Assistant Ministers should record decisions in compliance with the "Ministerial Decision Guidelines" issued by the Chief Minister and included as Appendix 3 to the Code which, amongst other things, required decisions to be taken in writing. However, prior to this, in 2005 and 2006 (RB0/2005 and supplementary guidance presented to the States on 4th December 2006), guidelines were issued to the effect that Ministerial Decisions needed to be recorded in writing.

Accordingly, it would have been best practice to record your December 2014 decision in writing. Further, the decision to delegate your powers in respect of the Jersey Innovation Fund under the Public Finances Law should have been reported to the States under Article 30 of the States of Jersey Law 2005. Neither of these event took place, However, neither error gave rise to any legal consequence and the delegation of your statutory powers remained valid in law. Although I appreciate that Ministers rely upon advice received from officers in respect of Ministerial Decision, Ministers are personally responsible for ensuring that their actions are subject to sufficient governance and that there is appropriate recording of decisions.

I noted you co-operated fully with Ms Simor QC's review. However, the two events referred to above contributed to a period of confusion as regards the extent of Senator Ozouf's responsibility, as set out in Ms Simor QC's report.

Why I am disappointed to have to write to you in these terms, I remain confident in your ability to continue to serve as a Minister.

Yours sincerely

Senator lan Gorst

Chief Minister of Jersey

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