NIEC failure “one of the biggest scandals” since devolution

The failure of a Government funded events company that collapsed in 2007 with debts totalling £1.6 million represents "one of the biggest scandals" ever investigated by the North's Public Accounts Committee, its chairperson declared today.

Sinn Fein's Michaela Boyle said the level of scandal involved in the collapse of the now defunct Northern Ireland Events Company (NIEC) was "completely shocking" and had ultimately resulted in taxpayers in the North footing a £1.6 million bill.

The NIEC was established in 1997 as a limited company to stage high profile, feel good events in the North. It organised a series of open-air concerts at Stormont featuring headline stars from Pavarotti to Elton John and also numerous sporting events.

It was designed to showcase a new side of Northern Ireland in light of the peace process but instead according to the North’s PAC it failed to “ensure that public funds were properly managed and safeguarded”.

According to the PAC the NIEC’s main source of funding was an annual budget provided by central government. Between 1997 and 2008 it received around £18 million of public funding.

The company was controlled by a board of publicly appointed non-executive directors and led by its chief executive Janice McAleese who subsequently resigned in May 2007. In September 2007 the then acting chief executive Jasper Perry notified the Department of Culture and Arts and Leisure (DCAL) – the NIEC’s chief sponsor department – that NIEC had run up a potential deficit of £1.2 million.

The PAC today published its highly critical report into how the NIEC had been run – highlighting “appalling mismanagement and impropriety”.

The report detailed how in evidence to the Committee, “DCAL officials admitted that the demise of NIEC was a comprehensive failure on the part of the DCAL to fully discharge its responsibilities in terms of sponsorship; it was a failure on the part of the NIEC Board to provide effective leadership, direction, support and guidance to the organisation; and it was a failure on the part of Janice McAleese, the chief executive of the company, to ensure that public funds were properly managed and safeguarded”.

The PAC’s chairperson said they agreed on the department’s analysis of what went wrong.

Ms Boyle added: “The Committee’s report should be compulsory reading for all public sector management boards, chief executives and accounting officers. The report demonstrates just what can go wrong if there is poor oversight, poor management and a culture of poor governance. Not only was public money squandered, confidence in the ability of arm’s length bodies will have been diminished.

“This situation must never happen again and public sector officials and board members must be constantly alert to the important lessons that can be learned from the failure of the NIEC.”