‘We didn’t know NI review firm had troubled finances’ by Adrian Darbyshire A review of the island’s National Insurance Fund and benefits system has come up with a ‘treasure trove’ of information, according to the Treasury Minister. But questions continue to be asked over the awarding of the £775,000 contract. Chairman of the Public Accounts Committee, Alfred Cannan, said he found it ‘incredible’ that phase one of the contract had been awarded to a debt-laden company that was subsequently placed into administration by its bankers. Lloyds TSB was owed £79.5m by RSM Tenon at the time the firm entered into administration. When rival accountancy firm Baker Tilly acquired the operating companies in the group in August last year, it paid £22m to settle the secured bank debt. Unsecured creditors in RSM Tenon Group and its Premier Strategies tax division are owed £2.2m, which is likely to go unpaid. RSM Tenon’s last accounts showed it owed £636,000 in employer contributions to its group pension scheme, the sum outstanding having widened from £368,000 in 2011 and £225,000 in 2010 - although that shortfall was apparently cleared in the 2012-13 financial year. Mr Cannan said he found it incredible that a company advising the Manx Government on its financial affairs effectively went bust because it could not manage its own affairs. He said: ‘I was of course aware that RSM Tenon had entered administration last year with debts exceeding £80m. ‘What is most surprising, however, is that within weeks of this public announcement, a spin off firm from RSM Tenon (Ci65) are appointed to a undertake a major contract advising government on the National Insurance Fund apparently without adherence to financial regulations and without a proper contract. ‘I am concerned about the whole affair but Tynwald will have the opportunity to make its own mind up when I formally present the Public Accounts Committee report for debate in November.’ That PAC report accuses government of ‘playing fast and loose’ with financial regulations after awarding the £675,025 second phase of the NI review to Ci65 without going out to tender. Ci65 was a new company set up by ex RSM Tenon staff who had worked on phase one. RSM Tenon had been awarded the £100,687 contract for phase one in late 2012/early 2013. The same firm had previously been brought in to turn around the financial fortunes of the Meat Plant. Minister for Policy and Reform Chris Robertshaw (pictured) told the Manx Independent he had not known RSM Tenon’s financial problems when the contract was awarded. He declined to comment further before the Council of Ministers gives its response to the PAC report in October. Treasury Minister Eddie Teare said: ‘We did all the standard checks and nothing came up.’ He said Ci65’s report was due in next couple of weeks and the final draft will be made public. The first draft was a weighty document, he said. ‘I’ve see the draft and it’s a treasure trove of information. Ci65 have done more work than they’ve been contracted for. ‘I know three quarters of a million pounds is a lot of money but they’ve identified spending patterns which have diverged from the UK very dramatically in the last 10 years. If our expenditure had been the same we would have paid £14m less. That puts this in context.’ He said as part of the review of the benefits system, Ci65 had gone into Markwell House anonymously on the claimants’ side to watch what happened and then had sat officially on the staff side. The NI Fund pays for state retirement pensions, the Manx pension supplement and part-funds other welfare benefits. CoMin says all options need to be considered to prevent it collapsing by 2050. IOMTODAY.CO.IM Report : iomtoday.co.im/news/isle-of-man-news/we-didn-t-know-ni-review-firm-had-troubled-finances-1-6772899
Posted on: Fri, 08 Aug 2014 11:12:28 +0000
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