States spending watchdog to report on £400k loan

Tuesday 20 September 2016

A top level investigation into the Jersey Innovation Fund’s decision to hand over £400,000 worth of taxpayers’ money to a computer software firm will be revealed by the end of this month.

The Comptroller and Auditor General will assess “all aspects” of the decision to make the loan 21 months ago to Logfiller Ltd, a company which claimed it would provide “a sophisticated computer software solution that measures user experience of application and system use.”

When Logfiller received the loan they suggested the product would create a “significant number of full time jobs in the Island.”

However, there has been confusion over whether the company is actually trading in the Island, and it appears that no local jobs have so far been created.

Documents filed show that Logfiller Limited was founded on 26 June 2014 and its registered office was at Rue du Hocq in St Clement.

Public Accounts Committee Chairman Deputy Andrew Lewis said the loan to Logfiller triggered an immediate review of all grants and loans from the States, with particular reference to the Jersey Innovation Fund. 

That review, by the Comptroller and Auditor General Karen McConnell, will be published by the end of this month. 

Deputy Lewis said: “The review will assess all aspects of the Jersey Innovation Fund and the governance of it. It will look into the decision making process in all areas, from the initial funding, all the way through to the checks and balances that are done on companies who receive funds. It is a root and branch review of the JIF by an independent assessor to make sure those decisions that have been made in the past are properly assessed, so as to minimise any mistakes in the future.

“It was brought about by the latest Jersey Innovation Fund loan to Logfiller as there was clearly a cause for concern.”

Deputy Lewis said no breach of the loan had yet been made by Logfiller, as the loan is payable over five years.

“But we are looking into all aspects of the Logfiller loan in the hope that there will be a happy ending,” he said. “It has not been paid back yet, but it is a five-year programme. 

“It needs in-depth attention and is very clearly in the public interest.”

Deputy Lewis says he backs the principles behind the JIF and accepts that some businesses will succeed and some will fail. 

“I fully accept that, but at the same time we have to be absolutely sure that everything is risk averse. Some will fail, but as long as it is a measured risk. It is also vitally important that we minimise that risk with proper governance.”

The fund was conceived in 2010 in an attempt to help companies start up, or expand, on the tail end of the global economic downturn.