Ministers received Innovation Fund report early

Monday 08 May 2017

The three ministers at the heart of the Innovation Fund affair were shown an advance copy of a report into their actions, so they could check it for typos and factual accuracy, it has emerged.

The Chief Minister’s Department has confirmed that Senators Farnham, Maclean and Ozouf received a copy nearly a week before other States members - who have subsequently complained they got their copies so late, there was no time to prepare questions on it.

One of them, Deputy Mike Higgins is now pushing for a special States debate on the report, to allow members to dig further into what went wrong with the Fund and to analyse the conclusions as to who was politically responsible.

The report concluded that the issue of who was actually responsible was deeply confused, with some senior politicians believing it to be Senator Philip Ozouf, despite the fact that he was not actually made legally responsible until April 2016, right at the end of the critical period. 

The Chief Minister has since been criticised for his translation of the report, which seemed to exonerate Senator Ozouf, and reprimand Senators Maclean and Farnham instead.

The report, penned by Jessica Simor QC, also laid some of the blame with the Economic Affairs Scrutiny Panel, who had been inspecting the project’s progress in its early days in 2013, for failing to follow up on how things were going – criticism rejected by the States members involved at the time as “unfair”.

Senator Philip Ozouf (pictured) could return to the Council of Ministers following the report, it has been suggested.

Ms Simor QC wrote: “It is notable that in supporting the proposal at the debate… Deputy [Steve] Luce (Chairman of the Scrutiny Panel at that time) said that “we all accept that it is not perfect” and noted that there were still issues “such as the role of the fund’s executive and the thorny subject of due diligence”. However, in relation to those issues, Chairman Luce stated that the “panel will continue to monitor [them] on an ongoing basis through quarterly hearings”. I asked Senator Maclean about whether such hearing ever took place and he had no recollection that they had or of any continued monitoring. Nor have I found any evidence of such hearings on the Scrutiny Panel web page or anywhere else.”

However, despite the report having been circulated in advance to check for accuracy, transcripts on the Scrutiny website showing that the Scrutiny Panel – at the time including Chairman Deputy Luce, Constable Steve Pallett, and Constable Michael Paddock – had indeed raised further questions in future hearings.

Deputy Steve Luce accepted that the Panel, "...didn't follow up formally" but said that they were also preoccupied with, "...issues such as the Aircraft Registry and Ports Incorporation to review". Constable Pallett added:

“We carried out many large reviews during our time and to be fair it was for the Minister at the time to implement any changes that we recommended within our review that may have improved both the due diligence processes and oversight of any grants.

“I don't accept the criticism made by the QC as I believe we did make various recommendations that may have had a positive outcome on the JIF and did follow up during our Quarterly hearings as Deputy Luce has stated.

“When we finished as members of the EASP in October 2014 the fund was very much in its infancy. Grants approved by that time, that have subsequently failed or not been as successful as we might have wished were either at a very early stage or not yet approved so criticism of the pre-October 14 Panel is unfair to say the least.

“I consider our Panel was thorough and put forward recommendations in our review that required serious consideration and in fact were on the main accepted by the Minister."

Chief Minister, Senator Ian Gorst said that he remained confident in Ms Simor QC's analysis:

“Jessica Simor QC’s report focused on the responsibilities of ministers and it was not in her brief to interview members of Scrutiny Panels.  I understand that since her report was published she has seen the minutes of the quarterly hearings of Scrutiny, which are different from a specific review of the Fund, and intends to deal with this in a letter to me.  Her report was independent, produced on time and was meticulous in its analysis of the legal responsibilities of all those involved in the Innovation Fund. Senators Maclean, Farnham and Ozouf were given the opportunity to check the facts before the report was published and I am satisfied that it accurately reviewed ministerial involvement in the operation of the Fund.”