Enterprise Development Scheme (EDS) - remaining funds

Summary

The requester asked for detailed payment lists, company status, and bonus information regarding the Enterprise Development Scheme (EDS). The Department for Enterprise disclosed the total number of payments and companies but withheld specific amounts and dates under a public interest test citing economic prejudice.

Key Facts

• 19 separate payments have been made from the EDS totaling £3.3 million.
• The payments consisted of 12 equity investments and 7 loans.
• 10 companies have received assistance from the Scheme.
• Specific payment amounts and dates were withheld to protect the economic interests of the island.
• The Department determined that the public interest in protecting commercial negotiations outweighed the interest in disclosure.

Data Disclosed

• £3.3 million
• 19 separate payments
• 12 equity investments
• 7 loans
• 10 companies
• 2018-09-26
• 2018-10-23
• 2018-10-17
• section 30
• Enterprise Development Scheme 2015

Exemptions Cited

• Section 30 of the Act (prejudice to economic interests)

Original Request

Please provide a list of the outlays/payments from the EDS. I accept that you can't release the names of beneficiaries but you can detail the types of payments made, the amounts and the dates paid, so please do so. Please state how many companies received aid from the EDS and please confirm how many of those companies are still trading, and whether any of the companies have run into financial difficulties since being awarded money from the EDS. Please confirm if any bonuses/golden hellos/golden goodbyes have been paid or will be paid to SPARK and please confirm how much in total they have received and will receive from the EDS and from the Department for Enterprise. Please state the balance of the EDS as at today's date (Wednesday 26.09.18) and please state what the anticipated value of the EDS will be at the end of SPARK's contract.

Data Tables (1)

Full Response Text

Freedom of Information Co-ordinator 1st Floor, St Georges Court Upper Church Street, Douglas Isle of Man IM1 1EX

Telephone: (01624 685375) Website: www.gov.im/ded Email: steven.tallach@gov.im

Our ref: 617366 17 October 2018

Dear ###

We write further to your request which was received on 26 September 2018 and is on the subject of the Enterprise Development Scheme 2015:

Our response to your request is as follows:

“Please provide a list of the outlays/payments from the EDS. I accept that you can't release the names of beneficiaries but you can detail the types of payments made, the amounts and the dates paid, so please do so.” 19 separate payments have been made, totalling £3.3 million. 12 of the payments have been equity investments and 7 were loans. It should be noted that the names of most of the businesses that have received support under the Enterprise Development Scheme are already in the public domain. The names along with the total amount of funding for the period are reported in the Enterprise Act Annual Reports. See page 10 of the 2017-18 Annual Report here: http://www.tynwald.org.im/business/opqp/sittings/20182021/2018-GD-0064.pdf The names and total amount can also be found in the 2016-17 Annual Report here: http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2017-GD- 0071.pdf However, as the names of businesses are already in the public domain in the case of information on the amounts and dates on which it was paid, in this instance the information is exempt from disclosure under section 30 of the Act as disclosure would be likely to prejudice the economic interests of the island. The Department is responsible for providing financial support to business, for the wider purpose of encouraging the growth of the Isle of Man's economy. If the Department were to release the actual amounts provided to businesses and the dates paid, it would be possible to put this information alongside the names of the businesses which have received support. This would be likely to: a) put off businesses applying for financial support from the Island, as they may not wish the exact amount of support provided to them to be in the public domain. It

would therefore be harmful to the economic interests of the Island; b) be harmful to the ability of the Department to agree loans and equity deals with businesses. The Scheme Manager has previously informed us that even general information put in the public domain about the Scheme has weakened their ability to negotiate good value deals. As section 30 is a qualified exemption, it is subject to a public interest test. The public interest must be something that is of serious concern and benefit to the public at large.

Factors in favour of disclosure Release of the information will promote public understanding and informed debate; and Accountability for the spending of public funds and ensuring that public money is being used effectively and Departments are getting value for money when purchasing goods and services.

Factors in favour of withholding The need to protect the commercial interests of the private sector, which plays an important role in the general health of the economy; The release of individual amounts of loan and equity support may put off businesses from seeking support from the Department; The release of individual amounts of loan and equity support will provide applicant businesses with information which allows them to negotiate higher levels of support than otherwise, and may undermine the process; Paragraph 14(2) of the Enterprise Development Scheme 2015 requires that the Department must report to Tynwald information concerning the economic benefits of financial assistance given and the value of financial assistance - specifically the total amount of funding provided to the businesses that financial year. It is therefore the case that the Department already reports information on financial assistance under the Scheme.

In taking these factors into account the the Department for Enterprise determined that the factors in favour of maintaining the exemption outweigh the factors in favour of disclosing the information.

“Please state how many companies received aid from the EDS and please confirm how many of those companies are still trading, and whether any of the companies have run into financial difficulties since being awarded money from the EDS.” 10 companies have received assistance from the Scheme. In terms of your questions as to whether all are still trading and whether they have run into financial difficulties, no companies are subject to insolvency proceedings, though several remain early in their lifecycle and reflect the nature of equity risk investing. “Please confirm if any bonuses/golden hellos/golden goodbyes have been paid or will be paid to SPARK and please confirm how much in total they have received and will receive from the EDS and from the Department for Enterprise.” The Department does not hold or cannot, after taking reasonable steps to do so, find the information that you have requested. This is because negotiations between the Department and Spark Impact are still ongoing. For the sake of clarity however, no additional payments outside the contract structure have been paid nor are proposed to be paid. The contract has been terminated with the consent of both parties within the normal contractual arrangements.

For information, you can also find a redacted copy of the contract between the Department and Spark Impact, which was released in response to a previous FOI request, on the FOI responses page here: https://services.gov.im/freedom-of-information/search You can also find information on Spark Impact’s fees in the Detailed Government Accounts 2016-17 and 2017/18: https://www.gov.im/media/1358013/detailed-government-accounts-year-ended-31- march-2017.pdf - see “Investment Management Fees” on page 84. https://www.gov.im/media/1362864/detailed-government-accounts-year-ended-31- march-2018.pdf - see “Investment Management Fees” on page 93. “Please state the balance of the EDS as at today's date (Wednesday 26.09.18) and please state what the anticipated value of the EDS will be at the end of SPARK's contract." As has been stated above £3.3 million payments have been made from the Scheme. Spark Impact’s fees have also been paid from the fund. The balance of the Scheme as at 31st March 2018 can be found on page 93 of the Detailed Government Accounts 2017-18: https://www.gov.im/media/1362864/detailed-government-accounts-year-ended-31- march-2018.pdf In terms of the “anticipated value” of the Scheme at the end of Spark’s contract, the Department does not hold the information that you have requested, due to the fact that there are still a number of deals that are being pursued which may or may not be completed by the time the contract ends. However you can find information on the “market value” of the investments under the Scheme as of 31st March 2018 on page 94 of the Detailed Government Accounts 2017- 18: https://www.gov.im/media/1362864/detailed-government-accounts-year-ended-31- march-2018.pdf Please quote the reference number 617366 in any future communications.

Your right to request a review

If you are unhappy with this response to your freedom of information request, you may ask us to carry out an internal review of the response, by completing a complaint form and submitting it electronically or by delivery/post.

An electronic version of our complaint form can be found by going to our website at https://services.gov.im/freedom-of-information/Review . If you would like a paper version of our complaint form to be sent to you by post, please contact me and I will be happy to arrange for this. Your review request should explain why you are dissatisfied with this response, and should be made as soon as practicable. We will respond as soon as the review has been concluded.

If you are not satisfied with the result of the review, you then have the right to appeal to the Information Commissioner for a decision on;

1. Whether we have responded to your request for information in accordance with Part 2 of the Freedom of Information Act 2015; or
2. Whether we are justified in refusing to give you the information requested.
   In response to an application for review, the Information Commissioner may, at any time, attempt to resolve a matter by negotiation, conciliation, mediation or another form of alternative dispute resolution and will have regard to any outcome of this in making any subsequent decision. More detailed information on your right to a review can be found on the Information Commissioner’s website at www.inforights.im. Should you have any queries concerning this letter, please do not hesitate to contact me. Further information about freedom of information requests can be found at www.gov.im/foi.

I will now close your request as of this date.

Yours sincerely