SECRET FIRM’S PUBLIC MONEY HANDOUT
Quango’s £500,000 in grants to anonymous company
A firm handed £500,000 of taxpayers’ cash have been allowed to hide their identity in a controversial secret deal.
Quango Scottish Enterprise admitted signing the agreement, branded “unacceptable” by MSPs.
Scottish Enterprise have refused to name the firm who received payments totalling £ 475,989 over the past three years after signing a gagging order.
The agency have claimed the deal had to be kept secret so as not to “prejudice the company’s commercial interests”, a Sunday Mai l investigation into the quango can reveal.
Our probe also uncovered huge sums of public cash handed to Ineos – owned by the UK’s richest billionaire Jim Ratcliffe and to bra tycoon Michelle Mone’s husband Michael for his now defunct l ingerie f irm Pendulum Apparel.
Ineos received £14.1million between 2014 and 2017, while Mone received £17,000 before his firm went bust with huge debts.
Other companies to have been awarded multi-million pound grants include online retailer Amazon, Italian arms f irm Leonardo MW, and drinks giants Whyte & Mackay.
Our investigation can also reveal SE’s newly hired chief executive Steve Dunlop was criticised for his part in a £34,000 junket to the French Riviera while director of regeneration at Newcastle City Council in 2005.
He took over earlier this year from Lena Wilson, who would have signed off the deals we highlight today.
She was criticised for taking a £70,000 second job on top of her £ 210,000 SE salary, as well as spending thousands on limos during a US trip.
Opposition politicians have reacted fur iously to our revelation on the secret deal, questioning whether SE have “something to hide” and demanding transparency.
Scot t i sh Conser vat ive enterprise spokesman Dean Lockhart said: “This is utterly unacceptable.
“Scottish Enterprise cannot hide six-figure grants behind a veil of secrecy – it should be transparent about all funding decisions so they are open to public scrutiny.
“Firms should not be getting taxpayers’ money on the condition of a confidentiality agreement.
“If Scottish Enterprise don’t provide transparency, taxpayers will have every right to suspect they have something to hide.”
Scottish Labour’s economy spokeswoman Jackie Baillie said: “This is an extraordinary admission. This is public money and there has to be the highest standard of openness and transparency.
“I would urge Scot t ish Enterprise to come clean and tell us who they have given almost half a million pounds to.”
Scottish Lib Dem leader Willie Rennie also criticised the arrangement.
He said: “Scottish Enterprise need to be utterly transparent as to who is on the receiving end of Government funds.
“The public will be rightly sceptical that there can ever be a good reason for keeping the recipient of almost half a million pounds of taxpayers’ money hidden.”
The secret deal has come to light as a result of a Freedom of Information request submitted by the Sunday Mail.
We asked for a full list of grants and loans given to businesses over the past five years.
But SE told us some of the information we had requested could not be released because “for some companies, we have confidentiality agreements”.
When pressed to reveal details, the agency claimed just one f irm were involved and admitted they had been given £475,989 between 2015 and 2017.
The company were handed public funds of £ 65,000 in 2015, £161,027 in 2016, and £ 249,962 in 2017 – while also demanding their name be kept secret.
A SE spokeswoman said: “There is a confidential ity agreement due to the sensitive and confidential nature of the specif ic projects we are supporting.
“Releasing the company name would breach confidentiality and prejudice the company’s commercial interests.”
Our probe reveals SE handed
out £103,215,039 in total grants in 2014, £ 88,346,804 in 2015, £ 80,219,710 in 2016 and £ 87,747,930 in 2017.
On the loans side, £28,819,040 was dist r ibuted in 2014, £60,631,699 in 2015, £38,872,672 in 2016 and £55,329,945 in 2017.
Recipients of cash included multi- national drinks giant Whyte & Mackay, who received £163,625 in grants between 2014 and 2017.
In 2016, the distillers paid just £172,000 in income tax despite earning pre-tax profits of more than £24million.
The company were bought in 2014 by bil lionaire Filipino businessman Andrew Tan, whose name appeared in the Panama Papers in 2016.
Controversial chemicals giant Ineos, who want to bring fracking to Scotland, received millions of pounds in grants.
The figures released to us show the company have been given more than £14.1million between 2014 and 2017.
Owner Ratcliffe has seen his personal wealth rise by £15.3billion to £ 21.05billion in a single year, according to the Sunday Times rich list.
He runs a huge part of his business through the tax haven Switzerland, and he only returned to the UK personally as a tax resident in 2016 after being “encouraged” by the tax cuts of former chancellor George Osborne.
Online retailer Amazon have been given £1.7million by SE between 2014 and 2017 despite criticism of the firm’s tax affairs and treatment of workers at its Scottish bases.
Craft brewer Brewdog were given £1.8 million and accountancy giants KPMG were handed £1million.
Italian arms multinational Leonardo MW Limited – who boasted sales worth nearly £ 7billion in 2015 – have been given £ 6.3million of taxpayers’ cash.
The company produce missi les, drones, military helicopters and warplanes, and employ nearly 2000 people in Crewe Toll, Edinburgh. On a smaller scale SE gave Pendulum Apparel £ 11,051 in 2015 and £ 6420 in 2017.
The firm were liquidated in late 2017 with losses of £630,000.
SE have been forced to write- off £ 94.9mi l lion they ploughed into failed ventures over the last 10 years.
Some of the biggest losers have been renewable energ y companies who were given big grants and loans.
A total of £15million went to Aquamarine, an Edinburgh wave power firm who ceased trading in 2015.
Another £16million was lost in 2014 to Pelamis, also a tidal energy company, who folded. SE named Steve Dunlop as their new chief executive in April, six months after the departure of Lena Wilson, who headed the quango for almost eight years.
Wi lson, who was paid a £ 210,000 salary, was heavily criticised last year for spending £ 4000 of public cash on limos during a junket to the United States with First Minister Nicola Sturgeon.
She took business class flights across America, spending £10,000 on air travel for herself and a colleague, as well as racking up a £1851 hotel bill, and spent £ 3904 in total on cars. Around £622 went on a single day in San Francisco, and another £1301 for a day in New York.
Wilson was also criticised for taking on a £70,000- a-year second job with Londonbased FTSE 100 firm Intertek.
Ministers have been urged to ensure her successor does not take on paid work outside their main job.
SE executives were criticised for spending thousands of pounds on stays in dozens of five-star hotels across the globe in 2016. The public footed a £90,000 bill for staff to stay in 60 top-class hotels and resorts over just one year.
Locations included Japan, Australia, Dubai and America, with rooms costing up to £346 per night.
The quango insisted the spending splurges were racked up to support an international trade and investment in Scottish goods.
Senior managers stayed in hotels including The Venetian in Las Vegas, Conrad in Dubai, and the revolving restaurant-topped Hesperia Tower in Barcelona.
SE signed of f more than £11,000 worth of expenses for 12 visits to the Imperial Hotel in Tokyo – one of Japan’s top hotels.
Workers stayed at 40 different Hi lton hotels across the world, while only five budget Travelodge hotels appear among the hundreds of destinations.
This is utterly unacceptable, they cannot hide £500,000 grants behind a veil of secrecy. Taxpayers will have every right to suspect they have got something to hide