North London Ltd. and a shortfall of £101,822

Some significant new evidence has just emerged about North London Ltd. (NLL).

In general terms, NLL continues to intrigue. For here is a private company that was paid hundreds of thousand of pounds by public authorities (including LBWF, some directly, and some routed through the Waltham Forest Business Board’s Waltham Forest Business CIC); handed its directors generous remuneration and other benefits (a whacking £314,897 in the three year period 2004-07 alone); but left an unexpectedly faint footprint in terms of recorded outputs and accomplishments. Indeed, up to now, in truth, it has been difficult to fathom exactly why NLL existed at all.

The new evidence cuts through some of the murkiness. We have established previously that NLL operated an EU-financed programme called ‘Exporting Success’, which (a) was supervised and administered by the London Development Agency (LDA) and then the Greater London Authority (GLA); (b) ran from 2009 to 2012; (c) was worth £687,101; and (d) aimed to offer ‘advice, guidance and hands-on support to business owners considering exporting or looking to explore new markets abroad’. What has now been divulged under the Freedom of Information Act is the output data from the programme, and this can be summarised as follows:

Put bluntly, NLL missed all of its targets, most of them spectacularly. In fact, in terms of business and job outputs, NLL produced only two-fifths of the total it was contracted to provide, in terms of ‘value of increase in economic performance’, a mere 15 per cent.

How could such a lamentable outcome have occurred? The official story, as far as I can gather, is as follows. Between September 2009 and June 2012, ‘Exporting Success’ ran uncontroversially, and the LDA and GLA settled NLL’s claims at regular intervals, in all forwarding 12 sums totaling £591,500. It appears that such payments occurred regardless of output figures, in the belief that any shortfalls would be made good as the programme moved to conclusion.

However, unforeseen events then intervened. For after examining NLL’s final claim, the GLA became concerned about ‘the evidence that had been provided in support of outputs and results’, and so determined to investigate further. But while this was happening, in August 2012, the GLA was informed ‘by a consultant engaged by NLL’ that the company was folding, a fact that was confirmed in March of the following year by the appointed liquidator, Leonard Curtis. Subsequently, the GLA convened a committee to examine what could be done, and this agreed to seek the return of £101,822 as a penalty recompense for the ‘significant’ underachievement. As of today, the situation is at deadlock, with Leonard Curtis arguing that the £101,822 is not a ‘true debt’, and talks ongoing between the GLA and the Department of Communities and Local Government as to how to respond. I am advised that the likely outcome is a write off.

Quite clearly, this chain of events does not reflect well on anyone involved. When questioned, the GLA tells me in mitigation that it is one of the few authorities in the country that operates a claw back policy. However, such an observation largely misses the point. The fact is that the GLA apparently handed over large sums of money – one payment to NLL was in six figures – without requiring watertight evidence of outputs. Moreover, the sum that the GLA is now attempting to reclaim seems based upon an arbitrary formula, and is probably much less that the value of the overall underachievement, as indicated by the numbers already presented.

As for NLL, in my view it too deserves censure. The NLL directors’ duty was to ensure that agreed targets were hit. If they could not deliver, they should have openly admitted as much and then returned the sums that the GLA had already paid over. The fact that the public purse will probably end up short of at least £101,822 does them little credit.

My inquiries into this fiasco continue, so further updates will appear in due course.

POSTSCRIPT

As of today (26 November 2015), Companies House continues to list NLL as ‘active’, though noting that both its 2012-13 accounts, due on 31 December 2013, and its 2014 Annual Return, due 11 February 2014, still have not been delivered. The plot thickens.