Bear with us, there’s a LOT to add! We’re also awaiting the outcome of a validated appeal to the Scottish Information Commissioner after Highlands & Islands Enterprise (HIE) withheld key applications and assessments or fully/partially redacted them.
Publishers should be funded on merit, not because public agencies are prepared to mis-score their funding applications or because of the political affiliations of their owners.
We will shortly petition for judicial review to seek reduction (nullification) of HIE’s decision to deliberately mis-score Sandstone’s Pivotal Enterprise Resilience Fund (PERF) application. If our petition is successful, Sandstone will be required to repay £0.12m in total.
Meanwhile, EU Commission has been asked to investigate a suspected breach of State Aid limits. HIE granted Sandstone a £0.175m loan, describing it as growth aid (to a shrinking business) when its purpose was to once again rescue the unviable company from failure.
Emails between HIE & Sandstone
All 2020 emails
Significant redactions. Key documents withheld.
Sandstone applications to HIE
£0.175m loan, Mar 2019
On page 3 of its application (see below), Sandstone did not disclose £111k that it had received from Creative Scotland during the preceding 3 years.
Here is the heavily-redacted assessment of that application.
£70k Pivotal Enterprise Resilience Fund award, May 2020
Includes things that HIE doesn’t want anyone to see, so it’s withheld almost the entire application. But you can see from the extract below that:
- claimed 8 employees when it had only 7 (its website showed 8 people in its team, but 1 was a literary agency’s employee)
- traded from IV2 7PA, c2 miles from Inverness city centre
- accepted line 60: I understand any relief given to me that breaks State Aid rules because of incorrect information I’ve provided…may be recovered in full. Sandstone provided incorrect information. That led to an assessment that was incorrect and so breached State Aid rules even before HIE’s deliberate mis-scoring.
HIE can – and must – recover the £0.12m that it provided that did not comply with State Aid.
HIE doesn’t want you to see much of this either. That’s why, until very recently, it hid this comment alongside the Geographic Location criterion score that it redacted:
‘Whilst a score of 1 is relevant to a business based in Inverness it is not deemed a fair reflection in terms of the business’s pivotal nature within its sector and the region. A score of [redacted, but understood to be 4 (out of a possible 5)] is considered much more reflective of the business’s position and pivotal nature within the region and is the score that a similar exercise this time last year would have brought.’
The attempt to justify that mis-scoring is astonishing:
‘As part of the assessment template, a section was included to assess the geographic location. The criteria noted that this was an assessment based on the location of the business activity and as such was not intended to be solely based on any physical location of a business’s premises.’Letter from HIE, 25 March 2021
The truth is: HIE decided IN ADVANCE of its assessment that Sandstone would be funded. It then substituted in its own criteria when it became clear that the published criteria would prevent the company being funded.
£50k PERF legacy project award, 9 Sep 2020
First thing to note is that we can’t bring you the application or assessment in respect of this further £50,000 award on the back of the May 2020 £70k PERF award that HIE mis-scored. (No mis-scoring = no £70k = no £50k.) Despite an FOI request, then an FOI request for a review, HIE withheld both documents entirely…giving as good an idea as any as to the content. Our appeal to the Scottish Information Commissioner seeks release of both documents.
Second, had you looked for this award on HIE’s website before Mar 2021, you won’t have found it. HIE hid it from scrutiny until we found the details at the EU Commission then asked HIE why it wasn’t on its website.
Meanwhile, here’s the email to which the withheld documents were attached.
Sandstone applications to Creative Scotland
Application approved April 2019
Can you spot those parts that are untrue? Claims that senior FDs employed by public bodies managed its accounts, for example?