Almost £8 million of taxpayers’ cash handed out by north enterprise bosses in grants and loans to businesses has been written off over the past five years.
Highlands and Islands Enterprise (HIE) officials are to be quizzed over the cash, most of which has been lost as a result of companies failing, when they appear before the Scottish Parliament’s Economy Committee tomorrow.
MSPs last night demanded an explanation after the figures came to light in a document prepared by HIE for Holyrood.
The paper was submitted to the Economy Committee ahead of tomorrow’s session at which MSPs will question HIE interim chief executive, finance director Nick Kenton and business improvement director Sandra Dunbar.
According to the document, HIE committed £123.6m in grants and loans to 810 organisations from 2014 to 2019. Of that total, £89.3m has so far been transferred to the organisations who applied for help.
Of the funds allocated in that period, £7,500 has been written off so far and £54,400 was clawed back from organisations. However, the document also revealed that a further £7.7m has been written off between 2014-2019, which related to financial assistance approved before 2014.
The document added: “Write-offs are due to a variety of reasons with the majority relating to the liquidation, dissolution or sale of a company.”
Last night Highlands and Islands MSP Jamie Halcro Johnston, a member of the economy committee, said HIE had an important role in helping the economy but cash had to be used “sensibly”.
The Tory MSP said: “I believe HIE will have to be clearer about the reasons that this money has been written off and I will be putting these questions to its senior management team when they come before the Scottish Parliament’s economy committee.
“I recognise there will always be an element of risk with investing in the private sector. But when public money is written-off, taxpayers have a right to know why.”
A HIE spokesman said: “When a company we have invested in goes into administration or liquidation, we explore all avenues to recover our investment. It is only when we have exhausted this process, and there is evidently no likelihood of us being able to recover the funds, that we consider whether to write off an investment.
“The investments covered in this report date back to 2007 and include a number of substantial, high-risk projects. Even though it isn’t always possible to recover our contribution, these investments frequently create lasting benefits, such as property, infrastructure, skills and experience that can go on to play a part in future regional development.”
