The PAC is aware that the situation regarding the Jersey Innovation Fund (JIF) has 'moved on' since the Comptroller and Auditor General's Report in January 2017, but considered it necessary to present the information gathered to date and make findings and recommendations which could be applied to future schemes. The PAC recognises that there has been some progress with the Innovation Fund in 2017, including the full repayment of one loan and another borrower continuing to meet their capital and interest repayment obligations. However, the PAC is concerned that there are ongoing costs in recovering debt and that vital lessons have not be learned around responsibility and maintenance of such a Fund.
The Chairman of the PAC, Connétable of St John, Christopher Taylor, said:
"Importantly, the PAC cannot concur with comments made in the States Assembly as recently as March 2018, that the Jersey innovation Fund was considered a "success" just because one loan recipient (who paid back their loan in full) has gone on to garner awards for their company's invention. The States failed to capitalise fully on that success because no equity was taken in that investment, nor a Royalty agreement established, so the States cannot enjoy any ongoing profit or maximise its investment. The PAC was told that the relevant skill set (to do this) "does not exist sufficiently within (the States), and with no critical mass of investment options to consider, remains an impractical outcome."
The PAC is concerned that the skill set was not considered at an earlier stage, along with proper cost estimates for the establishment and maintenance of the Fund, appropriate due diligence and risk minimising mechanisms put in place at the outset and a robust framework established for monitoring commitments made to the States Assembly."
The PAC urges the Chief Executive Officer to implement the recommendations of this report.
You can read the report by clicking here.