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New Deal’s £4m bill questioned
GOVERNMENT regeneration body EC1 New Deal for Communities – set up to help the poor in the south of the borough – has spent almost £4 million on “red tape” and consultancy fees it is revealed this week.
The figures were released to the Tribune under the Freedom of Information Act.
They show that cash paid to Renaisi consultancy has almost trebled since they were first contracted by NDC in 2002 to provide staff and services. EC1 New Deal was set up in 2001 after being identified as one of the most deprived areas of the country.
The government gave the body £52.9 million to spend on regenerating parts of Finsbury and helping the area’s poor.
But Renaisi, which is based in Shoreditch, has billed EC1 New Deal £3,793,980 for running everything from personnel to communications.
Opposition Labour councillor, Paul Convery, who has been commissioned to study New Deal programmes, said: “Renaisi are taking a very sizeable slug of the NDC’s funding.
“Originally, Renaisi were brought in to help EC1 get a grip, but I think (their fees) are pretty high and it could be done more cheaply.”
In 2002/3, New Deal only paid Renaisi £422,583, but by this year (2006/7) the firm’s annual bill had rocketed to £1,072,358.
At the present rate, it is estimated the body could spend up to £10 million on red tape by the end of the NDC’s lifespan in 2011.
Renaisi insists they only charge an £89,000 annual management fee and the rest is for services and staff salaries.
The Freedom of Information Act figures were obtained from Islington Council, the accountable body that agrees how much New Deal can spend.
Councillor Convery said: “All of the running costs for this NDC are flowing through Renaisi, which is good for their cashflow.
“I think it would be better run if people who worked for the council and who know how things work in the borough did the job.”
Sharon Hayward, a campaigner and former New Deal board member, said: “They don’t need that amount. But it’s not just about what Renaisi charge, it is all the additional things like employing a separate company to ask the community if the NDC has got things right.”
Andy Murphy, chief executive of EC1 New Deal, said: “It is between Renaisi and the local authority.”
Despite the £3,793,980 fee, the council can claim back £518,637 of VAT paid to Renaisi.
All of the payments to Renaisi incur VAT and the council has to invoice the government for a rebate.
Renaisi’s Donna Lightbown said: “There are lots of cost savings because it is a very specialist area of regeneration.
“From our perspective we provide really hard-working staff who offer value for money.”
Councillor Ruth Polling, who oversees the New Deal programme for the council, said: “EC1 New Deal is delivering benefit for the local community, which is endorsed by the council and by central government, and we are proud of the progress it’s made.
“Based on a recent government assessment of the performance of NDCs across the country, EC1 New Deal is officially ‘good’ and is improving well.” |
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