Official Report: Minutes of Evidence

The Chairperson (Mr Swann): I welcome Mr Colin Jack, director of strategy, European and employment relations division; Mr John Noble, head of the European social fund (ESF) managing authority; and Mrs Briege Rainey. Briege, for Hansard, can you tell me your title and position, please?

Mrs Briege Rainey (Department for Employment and Learning): I was working on developing the new operating programme.

The Chairperson (Mr Swann): Colin, are you leading? I am conscious of time. It is 11.45 pm, so I ask that the officials' input be brief at a maximum of 10 minutes.

Mr Colin Jack (Department for Employment and Learning): We have briefed the Committee a number of times on the development of the European social fund programme for 2014-2020. Since the last time we briefed you, we have had the open call for applications. That was launched on 28 November, with a closing date of 12.00 noon on 9 January. In the run-up to that, we had 11 roadshows around Northern Ireland in each of the new council areas. We agreed with the Committee that we would do that to make sure that the potential applicants were well briefed on the process. We had 580 people attending those roadshows, so we certainly had a large number of people from a large number of organisations informing themselves about the process. Those were full morning events, so a lot of information was given out.

We received 134 applications by the closing date of 9 January. We have been running through the process as was set out in the guidance notes. Phase 1 was about making sure that applicants submitted all the documentation they were asked for. There was a value-for-money assessment and a financial capability assessment. On 4 February, we sent a number of letters to organisations that had been unsuccessful at phase 1, and further letters were sent out over the week following that. We had a response on behalf of a number of applicants from members of the Committee and other politicians. Of the 134 applicants, around 40 did not submit the management accounts, which they were asked to do as part of the process.

Our view was that the guidance had been clear. Indeed, on the page of the guidance that asked for the management accounts, written in bold type was:

Nonetheless, the Minister was aware of the concerns. We discussed it with him, and we took the view that the scale of the number of applicants who had not submitted management accounts suggested that there had perhaps been some misunderstanding about what was required. The Minister decided that organisations should be given a further week to submit that information. The organisations affected received letters on Monday that gave them until 10·00 am on Monday morning to submit that information. In that letter, which gives a bit more detail on what exactly we are looking for, we have also tried to say that, if organisations have further queries about what they need to send, they can contact us. So, in that sense, we do not have a conclusion to the process. All the applications that have come in are still under consideration.

However, phase 2 of the process has been completed for all the applications that had not been rejected at phase 1, and they have all been scored by selection committees. That means that we have them and that further work can be carried out to make sure that the top-scoring applications are ready to be funded from 1 April.

From the start of this process, we have been very conscious that the current funding for the organisations comes to an end on 31 March. We have been planning it since 2012 to try to make sure that we have funding coming on stream for the new projects under the new programme from 1 April. It has been a challenging and tight time frame, but we allowed ourselves enough margin. We have six weeks to conclude the process, and we will still be working very hard to try to make sure that we have a conclusion to the process before 1 April.

That is our opening statement.

The Chairperson (Mr Swann): Colin, thank you for your introduction. I suppose it is factual, coming from the Department's point of view. I am sure that you are fully aware, as are John and Briege, of the frustration in the voluntary and community sector about how the Department has handled the entire process from the beginning. That was even reflected in a meeting that we had with the Minister at the start of December. We also had an informal meeting with the voluntary and community sector at that stage about your regulations. I would like as straight an answer as possible to this question. Page 19 of the Department's budget talks about the:

There is a thought in the voluntary and community sector that the Department intends that "better and more strategic utilisation" to subvent and support some of its own programmes, rather than programmes in the voluntary and community sector. The process that you have implemented moved from a qualitative to a quantitative assessment, and you were dropping organisations out very quickly for minor infringements or technicalities. You may say that that was said in bold, but the definition of a management account should have been included. How do you respond to the voluntary and community sector on that line of thinking?

Mr Jack: I would reject that suggestion.

The Chairperson (Mr Swann): I appreciate that you would.

Mr Jack: The "better and more strategic" use of the European Social Fund is about the better targeting of the programme to meet specific groups' needs. The 2007-2013 programme had only two pots of funding. One was for employability projects targeting people who were unemployed and facing a range of barriers to employability, but, within that, there was no breakdown of the specific groups that we wanted to target. That was 60% of the funding.

The other 40% of the funding was for the Apprenticeships NI programme. In the new programme, we again have 60% of the funding for projects targeting individuals and groups facing employability issues, and we have 40% for the apprenticeships and youth training programmes. However, we have split the 60% into four strands targeting specific groups. One strand is targeting young people not in education, employment and training (NEET), and the intention is to continue the delivery of the Pathways to Success strategy using that strand.

We have a strand particularly targeting people with disabilities, because we got feedback through the last process that organisations with a long track record of delivery lost out and organisations got in because they had been able to write good applications but did not necessarily have the same track record. We also know that people with disabilities comprise one group where the problems of economic inactivity are most acute. There is a need to continue supporting that work.

We also have the community family support programme (CFSP), which we have taken forward as part of Pathways to Success. It has been one of the signature projects under Delivering Social Change for the Executive, and we wanted to give that a future under the European Social Fund programme.

There is a further strand for groups facing a range of barriers to employability. The budget for those various strands —

The Chairperson (Mr Swann): Colin, I will just stop you. I am aware that you can supply that information and that the Committee can get it.

Mr Jack: All those four strands of the process were open to the voluntary and community sector, just as the application process was open to it the last time round. An issue that we have faced with the current programme is problems with audit of the programme on behalf of the European Commission. Other managing authorities for ESF programmes around Europe have also had that problem. The Commission has a very low tolerance of financial error in the programme, and that is because the Commission itself is audited by the European Court of Auditors. The Commission faces questioning from committees in the European Parliament and criticism from national Governments around the EU. It is under a lot of pressure to get the error rates as low as possible.

We were having issues in our programme with error rates that were above the Commission's accepted level because we could not provide documentation from voluntary and community organisations that satisfied the audit process. In the current programme, we have had issues with processing claims from organisations because we have had to make sure that every piece of expenditure is documented.

The Chairperson (Mr Swann): We are talking about the current process and the current application process.

Mr Jack: Yes, but we have had to —

The Chairperson (Mr Swann): No, I would prefer if you could try to —

Mr Jack: We have had to make sure that we did not face those problems in the new programme, so the financial capability assessment is a key part of the process. That is why we needed the management accounts. The financial capability assessment, rather than the accounts, is important. We need those to conduct the financial capability assessment.

The Chairperson (Mr Swann): In regards —

Mr Jack: So, lots of small voluntary and community organisations that have been through stage 2 of the process have provided us with the information that we requested. They have got themselves into a position where they will probably be offered funding, although, obviously, we cannot say for sure, because we have opened the process up to other organisations now as well. We are very supportive of the work that the voluntary and community sector does. We believe that, with some of our programmes, it is in some cases better placed than statutory organisations to work with, for example, young people who are NEET to signpost and mentor them to appropriate provision. So, there is absolutely no foundation to that.

The Chairperson (Mr Swann): In regard to auditing finance capability management accounts, there is a feeling, which I agree with, that you used that as a blunt tool to exclude organisations rather than to process and work with them. You referred in your opening comments to the specific groups that will be targeted and supported through ESF. That is the European recognition of why that fund exists. The feeling is that your phase 1 was to exclude without reading the quality of the work that those programmes were going to do. You have spent the last five minutes explaining to me the good work that the fund produces, but, if the financial management accounts were not there, you used that as an excluding mechanism to cut organisations out so that you did not have to go through the organisation that could write a good report. Why did you change that process? In previous ESF rounds, you looked at the application for its quality and then moved to the financial stage. Why was that reversed?

Mr John Noble (Department for Employment and Learning): The reason why we introduced the financial capability assessment at the beginning of the process in phase 1 was simply that, obviously, when you get to economic appraisal stage, you are near enough ready for the project to be funded. However, if the financial issues arise at that moment, it is very difficult, because you have built up an expectation with the project that it will get funded, so we decided to move it to the beginning of the phase. It is a standard government and European policy to do a financial capability assessment on projects. Also, in the current programme, we encountered issues with projects getting into financial difficulties. We have had to work very closely with those organisations to make sure that they can continue to run the project.

The Chairperson (Mr Swann): Would any of those financial difficulties be caused by the slow process of ESF funding?

Mr Noble: No, because, when you are doing a financial capability assessment, you take into account any money that organisations owe to the project. We would certainly look at that. If they have creditors or debtors in their account, we would take that into account. If they are owed money from the managing authority or the Department, for example, that would be in their accounts as money being owed to them.

The Chairperson (Mr Swann): Was a cash-based measure used to evaluate the financial capability?

Mr Noble: It was looking at their annual accounts that they had to submit and at the most recent management accounts. Drilling down into that, their cash position in the accounts would have been looked at. It would also have taken account of cash flow and the cash forecast for the project to be delivered. If they had any substantial loans that were owed or any other payment that they owed on a regular basis that would maybe affect their ability to manage their cash flow on a day-to-day basis, we would also take account of that.

The Chairperson (Mr Swann): If that loan was to buy premises that was actually in an asset, was that assets financial value taken into account in that financial capability assessment?

Mr Noble: No, we worked on the basis of a net cash asset. In other words, because —

The Chairperson (Mr Swann): Is that a European standard?

Mr Noble: I would have to clarify that.

The Chairperson (Mr Swann): But did you use it?

Mr Noble: We used it on the basis that the projects would have to have enough cash on a day-to-day basis. If you have a property and you get into financial difficulties, it will obviously take a period of time to sell that to get cash.

The Chairperson (Mr Swann): Is that standard applied at a European level or within —

Mr Jack: The last time around, we were in a position to give organisations a 30% upfront cash advance, but the Commission has made a very significant change at European level so that, this time, we have a 1% advance from the Commission ourselves. We are not a position to offer organisations that kind of buffer, which they had in the previous programme to make sure that they could pay their staff two or three months' salaries. They need access to some resources to get them through that period until we can start paying them for activity that they can demonstrate they have carried out for us. So —

The Chairperson (Mr Swann): What sort of preparation and support did you to give not-for-profit organisations that were asked to have three months' assets sitting in the bank overnight?

Mr Noble: It was 10% of the value of the annual application amount. For example, if they were applying for £100,000 a year, we were looking to see that they had a minimum of 10% of that.

The Chairperson (Mr Swann): Who set that 10%?

Mr Noble: That was set by us in our guidance notes.

The Chairperson (Mr Swann): Where did that 10% figure come from?

Mr Noble: It was a figure that we felt was reasonable, in the sense that, if you are going to be managing a project for two or three months at £100,000, you are going to be spending roughly £10,000 or £20,000 over that period. You would have to have that cash, because the Commission is very adamant that you must pay out the money before you can claim it, so, obviously, you would have to spend the cash, then make the claim to the managing authority and then pay it out. You need access to cash to be able to do that.

The Chairperson (Mr Swann): That is what I am trying to get at. That arbitrary figure of 10% came from —

Mr Noble: It is a figure that we thought was reasonable, in the sense that, if you a take a £100,000 project, it is £10,000, so they would have to have £10,000.

The Chairperson (Mr Swann): Can you clarify for me who the "we" is that decided that?

Mr Noble: The managing authority.

The Chairperson (Mr Swann): Which is?

Mr Noble: Which is the Department.

The Chairperson (Mr Swann): But who?

Mr Jack: The guidance was signed off by the Minister.

The Chairperson (Mr Swann): So, it is the Minister who decided. I want to know just so that I can be clear. It is the Minister who decided the 10% figure.

Mr Noble: If I could add a point to that, before we made that decision, we analysed our existing projects, and, in fact, our evidence shows that the majority of our projects would have passed that test. In a sense, we were confident that the majority of our applicants —

The Chairperson (Mr Swann): Barnardo’s failed on financial capability, I believe.

Mr Noble: Not that I am aware of.

The Chairperson (Mr Swann): Value for money, possibly.

Mr Noble: Yes. That is different.

Mr Jack: Value for money is a different test. On the value-for-money issue, organisations were told what the average cost was that we needed to achieve across each strand of funding. If they were submitting a proposal for a project that was above that average cost per participant, they needed to give a justification for it. Of the organisations that have been ruled out on value-for-money grounds, a number were ruled out on the basis that they did not answer that question in the application form. They did not demonstrate how their higher costs were justified. I do not know the specific case, but I know that a number of applicants —

The Chairperson (Mr Swann): What was the value-for-money limit that was set?

Mr Jack: We set out the average cost for each participant that we needed —

The Chairperson (Mr Swann): What was that?

Mr Jack: It was different across each of the strands of funding, but we set out the average cost that we needed to achieve in each strand of funding. If they were at or below that average cost, that was fine, but, if they were above that average cost, they needed to give notification of that.

We certainly did not say, "If you are above that average cost, we won't fund the project".

The Chairperson (Mr Swann): So, was an organisation that was ruled out on value for money ruled out because you did not believe their justification?

Mr Jack: It may be that they did not —

Mr Noble: Obviously, I cannot comment on any specific application.

The Chairperson (Mr Swann): I am not asking you to.

Mr Noble: In general terms, if they provided us with a rationale based on the guidance notes — a number of projects provided us with a very detailed rationale of the extra cost — that would have been accepted.

The Chairperson (Mr Swann): So, if they provided a reason —

Mr Noble: Yes. The question at that section of the application form, through the guidance, was clear. They had to do a calculation of their costs. If they were higher than what we were suggesting as being the average in the guidance notes, they had to give a rationale for that. We had a number of projects that did that and, obviously, we had a number of projects that provided the costing but did not tell us why there was an extra cost.

The Chairperson (Mr Swann): Did you go back for any clarification on that?

Mr Noble: No.

The Chairperson (Mr Swann): Across all organisations.

Mr Noble: Of the ones that failed, no, we did not go back for clarification.

The Chairperson (Mr Swann): You are not under oath at this stage, but we are being reported by Hansard. You are confirming to me that you did not go back to any organisation.

Mr Noble: No.

The Chairperson (Mr Swann): You are not confirming or you are confirming?

Mr Noble: Do you mean in relation to value for money?

The Chairperson (Mr Swann): In relation to value for money —

Mr Noble: No, we did not —

The Chairperson (Mr Swann): — and management accounts.

Mr Noble: Sorry, I will come back to the management accounts and the financial capability assessment in a second. We did not contact any organisation in relation to value for money. If they did not provide the rationale, they would have been ruled out from the process.

The Chairperson (Mr Swann): Straight away; culled.

Mr Noble: Yes.

Mr Jack: On the financial capability assessment, we said in the guidance notes that we would or may contact applicants for further information. We contacted, I think, 27 organisations for further information in order to carry out the financial capability assessment. Those were organisations that had submitted their management accounts.

The Chairperson (Mr Swann): Was that across a level playing field? The opportunity was given to everybody.

Mr Jack: Yes.

Mr Noble: It was actually detailed in the guidance notes on financial capability assessment —

The Chairperson (Mr Swann): If I asked any of the 40 organisations that were turned down to respond to the Committee with a copy of the correspondence or contact they received from the Department at any of these stages, they would be able to provide it to me.

Mr Noble: Yes, I would say they would. They would be able to provide any of the letters they got, yes.

Mr Ramsey: Speaking as someone who has been on the Committee for a few years, I have never seen an issue cause so much anger, frustration and resentment. It appears that there has been a change of heart by the Department, which I can only believe was a result of the Committee's intervention, particularly the Chair's involvement in ensuring that it was prioritised. You have now invited the 40 applicants who were turned down to resubmit financial accounts. We could have had the decimation of upwards of 90% of women's services across Northern Ireland. Where does the women's sector fit? Are there any sole programmes from that? Following on from the Chair, I will be quite specific. The close of applications was 4 February —

Mr Jack: It was 9 January.

Mr Ramsey: The close of applications was 9 January. Who was involved in the processing of those applications in the Department?

Mr Jack: The staff in the ESF managing authority in the Department.

Mr Ramsey: So, was anybody sitting at this table involved in the processing of those applications?

Mr Noble: I was involved in the process of those applications.

Mr Ramsey: You are heading it up, but you are still involved in it. Do you think that that is the right procedure to be following? Do you think it is right to be heading up that funding and to be involved in the procedure and processing?

Mr Noble: We did the initial phase. In the guidance notes, we said that the managing authority would undertake the initial phase, because the initial phase was, first of all, the checking of documentation. Our accountant in the office then checked the financial capability assessment, and then we were involved in looking to make sure that the objectives were SMART and that they linked to the programme. Those are general checks that were done by the managing authority. There was no detailed analysis of the application form. The quality of it was going to be phase 2 of the assessment.

Mr Ramsey: Would you say your involvement was more of a supervisory role or a leadership role? What role did you have?

Mr Noble: My role was supervisory, because the team in the office was looking at each individual area. The only one that I, personally, was looking at was the area of demonstrating no duplication of provision of other programmes.

Mr Ramsey: You said that the applications closed on a date in January. You also said that you had more of a supervisory role. Did you have any contact with applications leading up to the closing date in January?

Mr Noble: Not that I am aware, no.

Mr Ramsey: Not that you are aware of.

Mr Noble: We had an email address, which, prior to the submission of applications, applicants could submit queries through. However, we got general queries through phone calls into the office, but we tried to encourage people to use the email address.

Mr Ramsey: I will ask the question again: did you yourself, personally, make any contact with any of the groups, leading up to the decision being made on applications?

Mr Noble: I personally would not have phoned anybody, no.

Mr Ramsey: I did not say "phoned anybody"; I asked if you made any direct contact.

Mr Noble: I cannot say no, because, obviously, if somebody sent me an email with a general query, I may have answered it.

Mr Ramsey: I have two letters here, which are redacted. They are from you; they are not in response to any query. One of them states that it is from you, John.Noble@delni.gov.uk, and the names are redacted. This is your letter to them:

That is one email. It is dated 30 January. So, you have asked for that information, and you have denied that you made any contact with —

Mr Noble: Sorry, I obviously do not know the full details, but that may have been in relation to the financial capability assessment.

Mr Ramsey: But I asked you if you made contact, and you said no.

Mr Jack: My understanding of the question was whether he made contact before 9 January, the closing date for applications.

Mr Noble: Yes, I thought that that was the question, but maybe I misinterpreted it.

Mr Ramsey: Why would you select one group, from the 40 groups that were turned down, asking for financial assessment? Why would you not contact the other 40?

Mr Noble: The 43 were rejected because they did not submit management accounts; that is why. It was clear in our guidance, which we were following. It said that if they did not submit the management accounts, their application would be rejected. The issue that you have raised about 30 January is likely because we were having some clarification on the financial capability assessment of a project that had submitted its management accounts. Again, that was in keeping with our guidance that we would be able to contact those organisations to get clarification.

Mr Ramsey: But you told me you had only a supervisory role. Now I have this information. You have a directing role. I am going to quote another letter from your email address:

You said that you made no phone calls. Those are now on record. First, you said that you made no calls, but now this is telling me that you made a number of calls. I am suggesting to you now that you have corrupted the process of applications as a result of your personal involvement in applications, which is wrong.

Mr Noble: In your first question, I thought you were asking if I had made any phone calls or made contact with anybody prior to the closing date of 9 January. My answer was on the basis that, if it was in relation to financial capability, I was contacting them, based on the guidance.

Mr Ramsey: You told us you had a supervisory role. Why would you, personally, become involved in the projects?

Mr Noble: I think the case you are referring to has come to mind; it is, perhaps, that they contacted me and asked me —

Mr Ramsey: I will share these. It did not say, "In response to your email"; it did not say, "Thank you for your email". It said that the recipient would need to provide information. It is not acknowledging an email or suggesting a thank you for an email. I suggest, Colin Jack, that the reason why people are so concerned about the process — I think the Chair made the point earlier — is that they believe that barriers and obstacles were brought forward to take people out, and preferential treatment was given to applicants. That is clear from the evidence that has been presented today, which was handed to me yesterday — the two redacted letters. You initially denied them. Colin, you can shake your head. He said, clearly, here, that he made no phone calls.

I can tell you now that this tells me that he is saying that he made phone calls.

Mr Jack: My recollection of the question initially was that it was about contact before 9 January, and John's answer to that was clearly "No".

The Chairperson (Mr Swann): Sorry, Colin. As I said, the meeting is being covered by Hansard, so we will be more than able to see what was said. The concern that I raised earlier, whether it was in regard to management accounts or financial capability, was about the involvement of a member of staff from in the ESF managing authority to some organisations and not all. That presented an uneven playing field for the organisations.

We have asked what John's role has been. What has your role been, Colin?

Mr Jack: I am the director of strategy, European and employment relations division, so the ESF is one of a number of functions that falls within my division.

The Chairperson (Mr Swann): So, what has your specific role been in this application process? Were you sitting on any of the boards?

Mr Jack: No, I did not sit on any of the individual panels.

The Chairperson (Mr Swann): Why? If John has been able to sit on them, and John has sat on them —

Mr Jack: John has not sat on any of the selection panels. The selection panels are at stage two of the process, and they comprise staff from DEL and they also have representatives from councils —

The Chairperson (Mr Swann): John, you have not sat on those panels or sat in on those panel meetings.

Mr Noble: I —

The Chairperson (Mr Swann): Or sat in on those panel meetings. I will be clear.

Mr Jack: John has sat in on them.

The Chairperson (Mr Swann): He has sat in on them.

Mr Noble: Just to provide advice or guidance to the panel.

The Chairperson (Mr Swann): Is that within the normal practice or procedure?

Mr Noble: Yes.

Mr Jack: Yes, it would be within normal practice for this type of programme.

The Chairperson (Mr Swann): For "this type of programme".

Mr Jack: Yes, in any sort of funding programme, in my experience, the grade 7 officer who is responsible for the process is in attendance at the selection panel meetings to provide support to the panel members.

Mr Noble: I did not sit in on all of them simply because of other work pressures.

The Chairperson (Mr Swann): So, you have sat in on some.

Mr Noble: Yes, some; not all of them.

The Chairperson (Mr Swann): Not all of them. So, there has been an inconsistency there.

Mr Jack: Well —

The Chairperson (Mr Swann): Sorry, no. You were sitting in on some panels to provide advice and guidance. Why were those other panels not worthy of your attendance to provide advice and guidance?

Mr Noble: Another member of staff from the managing authority would have sat in.

The Chairperson (Mr Swann): So, there is an inconsistency here.

Mr Jack: John is a very busy person, and he has had a very busy time during this application process. He and his staff are still having to administer the current programme in parallel with the application process for the new programme. So, he could not possibly be at all the meetings; I think some of them may have met simultaneously. We have been doing this programme in a very constrained timescale, but someone from the managing authority — John or one of his staff — would have been at the meetings to provide support. The panels are responsible for their decisions: they score the applications, and they are independent of the managing authority.

The Chairperson (Mr Swann): So, you have known for two years, but you could not plan a schedule.

Mr Jack: We have known for two years, but it has been a complex process. We launched this application process in advance of the Commission giving its final approval to our operational programme, because we knew we would have to do it in November if we were going to get money flowing from 1 April. The English ESF programme has not been approved by the Commission yet, and it has not launched its application process. We know of other EU programmes in Northern Ireland where the funding comes to an end at the end of April, and they have not launched their process. We have been planning to try to make sure that we meet this deadline, because we know the groups are doing good work and we want that work to continue. Some of them will not get funding; some of them will not be successful in the application process. The value of the applications we got was 1·8 times the amount of money we have to distribute, so there will be organisations disappointed in this process. It is very important to us that it is a fair and level playing field for all those organisations.

The Chairperson (Mr Swann): That is the crux of this meeting: this process has not been fair, nor has it been perceived to be fair, Colin.

Mr Ramsey: I will try to be very quick. I am not convinced that there was a level playing field. John, I believe that you showed unfair treatment. I have put in a freedom of information request to get every email and telephone call made by the Department on this funding process. I want to be clear in my mind that the process is not flawed.

You referenced the guidance notes. Could we have a copy of the guidance notes that were submitted to applicants in the lead-up to the application process? Some people are telling me that the guidance notes were changed subsequently by yourselves. You made a decision to edit people out.

Given that you are now undertaking to review the 43 applications that were originally turned down, why are you proceeding with phase 2 before that is concluded?

Mr Jack: I will answer the second part of that question first. Phase 2 had already been completed last week. The organisations that got through provided all the information they were asked for in the guidance. They got through the financial capability and value-for-money assessments, so they were considered by the panellists and given a score.

If further applications now get through the phase 1 process of the financial capability and value-for-money assessments and so on, we will reconvene the panel meetings with the same members and scoring on the same basis to make sure that those applications are considered on the same basis as the ones that have already been considered. If they score higher than the ones that have already been considered, that will have to be taken into account in the final allocation of funding.

We are not in a position to notify anybody that they have been successful at phase 2 of the process because we do not know. In a sense, there is a scoring; we have a limited budget for each pot; we need to see the value of the applications for each of the priorities before we can notify anybody that they have been successful.

We need to do work on a contingency basis on the economic appraisal stage, where we have projects that we are confident will be funded because they were the top-scoring projects, to make sure that we have that process finished before 1 April. That is an internal process that we can take forward.

The Chairperson (Mr Swann): Colin, how many projects are in phase 2?

Mr Jack: How many projects have gone through phase 2? A total of 66 applications have already been assessed at phase 2.

The Chairperson (Mr Swann): They have been assessed by panels.

Mr Jack: They have been assessed by panels, but that is all that has been done with that at this stage.

The Chairperson (Mr Swann): When were those?

Mr Jack: The week before last — two weeks ago.

The Chairperson (Mr Swann): Two weeks ago.

Mr Jack: Yes.

The Chairperson (Mr Swann): Was the Minister aware of that? When I was speaking to him last week, he told me that nothing had moved to phase 2.

Mr Jack: Nothing has been —

The Chairperson (Mr Swann): He told me that nothing had moved to phase 2.

Mr Jack: No organisation has been informed of the outcome of the process —

The Chairperson (Mr Swann): Sorry, Colin, just to clarify. I know the way you can describe it. What I am saying is the Minister told me last week that nothing had moved to phase 2. Now you are telling me that, two weeks ago, 66 organisations had been scored for phase 2.

Mr Jack: Yes, they have been scored, but that is all that has been done with them. We are not in a position to inform them that they have been successful because we do not have the final picture until we have put all the applications through.

We would never have been in that position at this point anyway because there was an appeals process following stage 1, and there will be an appeals process following stage 2. We need to allow time for that appeals process to work, but we can have meetings of the phase 2 selection panels in advance of phase 1 being concluded. We need to move the process forward so that we are ready to fund the applications that ultimately are successful —

The Chairperson (Mr Swann): Yes, I get that.

Mr Jack: — but we can always reconvene the panels.

The Chairperson (Mr Swann): Who is your phase 2 panel?

Mr Jack: There are a number of panels for each strand of the funding. We can provide you with the names of the panel members.

Mr Noble: We can give you the names of the panel members.

The Chairperson (Mr Swann): OK, I appreciate that.

Ms Sugden: I am deeply disappointed at how this has happened. It is arrogant of you to suggest that there has been a misunderstanding. If up to even 10 applicants had not submitted the correct documents, I would understand that somewhat, but we have nearly a third. I suggest that that was a fault on your part. I think that people were ill informed by the application form, communication was poor, and there was severe inconsistency, to the extent that it undermines the whole process for not only those who were excluded and have been given a further week to submit but those who are now potentially looking at phase 2.

I have just received a message saying that this could jeopardise jobs as well. That is not the fault of this Committee scrutinising the work that you do; that is the fault of how phase 1 was carried out. I think the whole process is flawed and serious questions must be asked of it, particularly in respect of inconsistency. I also think that phase 2 has been undermined because of that. How can you now go back? You said earlier that the applications that have got past phase 1 will be ordered in preference. How can you do that when there could be more applications from phase 1 because of this mistake?

Mr Jack: The applications will be scored on a consistent basis by the same panel that scored the applications that have already been considered. There is no reason why there should be any prejudice to the way in which those phase 2 panels consider these applications. It is widely known, and the panels will certainly be aware of the reason why they are re-marking these applications. Individual panel members will have their own views about whether the guidance was clear or whatever. They are independent of the ESF managing authority. Some of them are officials from the Department; some are officials from other public organisations. It is important that anybody taking part in this type of process does so with integrity. Panel members are doing that, and will do that.

Ms Sugden: May I put it to you that, with the way in which this first phase has been carried out, integrity has gone? To suggest that these applications can be processed without prejudice is false. I think that you should suggest that to the people who now have a week to resubmit.

Mr Jack: If this were a public procurement process, I would be seriously concerned about opening —

The Chairperson (Mr Swann): But it is not.

Mr Jack: There have been a number of challenges to procurement processes in recent years, where decisions that Departments have taken have been challenged, usually on the basis of them not following their process to the letter. Taking account of that, we set out to follow our processes as closely as we could. However, this is a grant programme for the voluntary and community sector, and there are others, statutory organisations, that are entitled to apply as well. It is a slightly different process, and we took account of the fact that such a high proportion of organisations had not submitted the documentation that they were requested to provide. That the proportion was so high does give cause for concern.

Ms Sugden: On whose part is it a cause for concern? That of the applicants?

Mr Jack: It is clear on the part of the members of the Committee that they are concerned, the applicants are concerned —

Ms Sugden: Is the Department concerned?

Mr Jack: — and it is a concern for us as well, because we want to have the best possible field of applicants to consider. We want all the organisations to participate. We work with many of these organisations on an ongoing basis. They deliver programmes on our behalf. Most of the time, we want to work in partnership with them. When it comes to an application process, obviously, we are in a position of making decisions about their future, but we want to work in partnership with them, and we want all the organisations to feel that they have had a fair go. We are opening up the process to organisations to send in information that they did not initially submit for whatever reason that may be, whether the guidance was not clear or they did not understand it. They could have asked us for clarification of what we were looking for; they did not. However, it is clear that there is unhappiness about that aspect of the process, and so we have opened it up again. We will process the applications, and we want to make sure that we have an outcome for 1 April. We have been working very hard and put in long hours on this.

The Chairperson (Mr Swann): Colin, you have covered that point.

Ms Sugden: Let me bring this back to my original point. Who does the responsibility lie with, in respect of the 43 applicants that were refused because of their failure to submit that documentation? Do you think that it is their fault, or is it the fault of the processing body — you?

Mr Jack: The organisations did not submit the information requested. There have been suggestions, in correspondence that we have got, that the guidance was not clear enough, and some organisations have said that, "An organisation like mine does not prepare management accounts".

In fact, when you look at what management accounts are, all organisations need to prepare them in some shape or form. The important thing is that the process, by the time that it is all worked out, has been done on a fair basis. The change is about making sure that all the organisations have a fair chance to have their opportunity. We have received one or two pieces of correspondence from organisations that stated that they felt that they had submitted everything that they had been asked for and had got through and that they may now be disadvantaged by this. We are always going to get some organisations that are disappointed in a process in which we are almost two times oversubscribed for funding. The Minister has listened to the concerns that have been expressed by the Committee and others and has responded to those concerns. It is our job now to carry this out and carry the process forward.

Ms Sugden: As a member of the Committee, I have a role to hold the Department to account on how it carries out the processes. You are trying to ensure that there is equality across the board, but I am trying to ensure that what you did was right to ensure that equality. It is definitely the case, on the basis of the representations made to me by my constituents and others, that this was not done fairly. Someone has to take responsibility for that. You were quite quick to point out that you have had one or two pieces of correspondence from people who said that they had fulfilled all the things asked of them. However, 43 did not get in for that reason.

Mr Jack: We made the change because the number was big enough to cause us concern.

Ms Sugden: Are you saying that the change acknowledges the fact that phase 1 was flawed?

Mr Jack: It recognises that there was a problem with those organisations submitting management accounts in the way that they were asked for in the guidance notes.

Ms Sugden: May I —

Mr Jack: We will obviously seek to learn lessons from this process. The guidance notes state:

We could have put the management accounts under a separate bullet point. That would have been a bit clearer. There are various things that we could have done —

Ms Sugden: To be honest, I think that it goes further than being pedantic about bullet points. I would have more respect for you if you were to accept the fact that the first phase was administered ineffectively and has now undermined the whole process.

Mr Jack: We have a large number of organisations. Some 90 organisations submitted all the information that they were requested to submit —

Ms Sugden: Forty-three of which —

Mr Jack: — and we have to treat those applicants fairly, but the number that did not submit the information is big enough to give cause for concern about that aspect of the process —

The Chairperson (Mr Swann): Colin, if even one of those 90 applicants that did get through received additional contact or requests from within the management authority at any level, it leaves the 43 at severe disadvantage and detriment — and discrimination.

Mr Jack: We have seen correspondence from a large number of Assembly Members, other politicians and others on behalf of those organisations, and some made allegations about contact being made by members of staff with organisations. We have made enquiries into that, and the only contact that I am aware of that was made by members of my staff to those organisations was as part of the financial capability assessment as set out in the guidance notes. It was following up, as had been made clear would be done, if the information that was provided was not —

The Chairperson (Mr Swann): And we are following up on that, Colin, you can be sure.

Ms McGahan: After listening to that, I think that the Minister should take a hands-on approach to sort out the mess and not leave it to the officials. I have absolutely no confidence in them.

Were the processes subject to a full equality impact assessment (EQIA)?

Mr Jack: It would not be normal to carry out an equality impact assessment of an application process per se. The underlying policy is screened, and, when it is necessary to carry out an equality impact assessment, that is done.

Ms McGahan: Was a full EQIA carried out on the policy changes?

Mr Jack: Briege, you were involved in that.

Mrs Rainey: Do you mean for the operating programme document?

Ms McGahan: Was there a full EQIA done on the policy changes?

Mrs Rainey: There was no full EQIA of the operating programme document. There was a screening.

Ms McGahan: What was the rationale for not carrying out a full EQIA?

Mrs Rainey: The policies and strategies that the activities were based on had already been subject to an EQIA. I am talking about the policies in the operating programme. This is policy side of it. They had already been subject to an EQIA. As well as that, the whole thrust of the ESF in Northern Ireland is to provide support for disadvantaged groups. By its very nature, it is addressing inequalities.

Ms McGahan: Regarding the screening process, if a full EQIA was not carried out, has the Department sidestepped its equality obligations?

Mrs Rainey: I would not think so. A programme monitoring committee will be set up to monitor the new programme, and one of the groups there will be an equality group that will look at just those things and take the Department to task over anything that it feels has been overlooked.

Ms McGahan: I think that your rationale is weak.

The Chairperson (Mr Swann): Briege, that group will be set up after awards have been made and moneys given out.

Mrs Rainey: Yes, I am talking about the policy side of it. I was involved in the development of the policy.

Mr Jack: A group that has been meeting during the development of the programme has also had similar representation to the programme monitoring committee. As far as I can recall, it had equality representation on it as well. We carried out a screening exercise on the programme, and that identified that we did not need to carry out a full equality impact assessment. This is a programme about tackling inequality.

The Chairperson (Mr Swann): Bronwyn, do you want to pick up on that? That is the thrust of your questions.

Ms McGahan: Chair, I do not feel that I am getting anywhere with the arguments.

Finally, in my constituency, the First Steps Women's Centre potentially faces closure in June. That is an absolute disgrace. The fault lies not with it but with you and the way in which the processes have been conducted. Shame on you.

Mr Jack: We have not concluded the process yet. We have a significant amount of money to distribute. It will be distributed to a wide range of organisations across the region and will support organisations in some cases to carry on good work.

The Chairperson (Mr Swann): Colin, the first step in your actions has excluded. That is the concern.

Mr Jack: We have reviewed what we have done, and the Minister has considered the situation that we are in. We have now given the organisations the opportunity to submit their management accounts now. That means that quite a small number of organisations will fall out of the process at phase 1.

The Chairperson (Mr Swann): Small?

Mr Jack: We will consider the 43 that now have the opportunity to submit their management accounts and will take forward the financial capability assessment. If they get through that and the other parts of the process, they will be considered at phase 2 on the same basis as all the other applications that have gone through the process.

Mr Buchanan: It is no fault of any of you sitting at the end of the table today, but this process is a shambles, flawed and not fit for propose, and it is time that the Minister took things in hand and looked at it. A number of people have questioned you today, and I have to be clear that, as Deputy Chair of the Committee, I have not heard a clear and decisive response to any of the questions that have been put to you. We have heard jargon. That is not what we want. We need to get to the crux of the matter and find out what really happened. We are not getting that. We are going around and around in circles.

Colin, you have said on numerous occasions that we have 1·8 times more applications than we can fund. That is not a good reason for discarding 43 applications. It appears from what you are saying is that you discarded 43 applications in the first round to cut out a number of organisations for the purposes of the funding stream. I feel that there is a need for a root-and-branch inquiry to investigate the manner in which the first round of the assessment was conducted. That is how we see it.

Was phase one carried out by more than one team of officials in the managing authority or by one team only? Did one team in the managing authority look at every application that came in for the ESF or was it done by two teams?

The Chairperson (Mr Swann): Colin, can you answer that for us?

Mr Jack: John is directly responsible for the detail of how that was carried out, but a number of staff in the managing authority were involved in phase one of the process.

The Chairperson (Mr Swann): Tom's question was whether it was one team or two teams involved. If you do not know —

Mr Jack: It was not one team or two teams but a number of individuals in the managing authority.

Mr Buchanan: To clarify, seeing as you cannot pick up on what I am saying, did the same people look at every application? Out of all the applications that came in for the ESF, did the same group of people look at every application?

Mr Noble: Five or six of our project officers reviewed the first phase and looked at the documentation. They produced a report that was passed to a more senior member of the team, who carried out a quality assurance assessment.

Mr Buchanan: Therefore, it was the same group of people who examined every application that came through.

Mr Noble: Yes. It was the same staff in the managing authority.

The Chairperson (Mr Swann): Who was the senior member of the team who had the final say?

Mr Noble: I was the senior person. I had the final —

The Chairperson (Mr Swann): Could you not have told us that rather than hiding it?

Mr Noble: Sorry?

The Chairperson (Mr Swann): When you said that that was passed to a senior member of the team, could you not have just told Tom that that was you?

Mr Noble: Apologies. There are two other senior members. I have two deputies, and they were involved in the quality assurance element. As I said, the only section that I looked at specifically in the first phase was the duplication of provision with other government programmes, but I did supervise the whole process.

Mr Buchanan: We are dealing with groups with 20-plus years' experience of delivering excellent work on the ground, 20-plus years' experience of making applications, and so on. On 9 February — it is recorded in Hansard — the Minister said that the guidance notes were:

If the guidance notes were so clear, how did groups that have been in the business for years get it so wrong?

Mr Jack: We did not expect that to happen. We did not expect them not to send in the documentation that we asked for, yet they did not. That gave rise to concern about the process. That put us in a situation that we did not want to be in, and the Minister has taken the process in hand. We discussed that with him, and, ultimately, it was his decision to reopen the process to the organisations that did not submit their management accounts. That is where we are.

We do not have an explanation for that. There could be all kinds of explanations. We will seek to learn the lessons from the process so that we can do it better next time.

The Chairperson (Mr Swann): Colin. The next time is six years away.

Mr Jack: It might be part of the problem that the process does not happen very often. What it does mean, however, is that, when we are in a position to offer organisations funding, we offer them three years' funding. Most public authorities offer only one year of funding. Some of the match funders that we work with do not tell the organisations until July of the financial year what their match funding will be for that year. We are trying to support the organisations and give them a sustainable way forward. There are lots of other funding processes that, for one reason or another, do not do that as well as we are trying to do it.

We are sorry that the process has hit a snag, but we are on track. The sooner that organisations send the information to us, the better. We have given them until Monday, but, if they send it in today or tomorrow, we can start to work on it straight away and move the process on. The sooner that we have that information, the more chance that we will have to let all the organisations that have been successful —

Mr Buchanan: Forty-three organisations have got the opportunity to submit further information. You have said that "we" will look at it. Who is "we"? Will it be the same people who looked at the applications in the first place?

Mr Jack: I used "we" to mean the Department. It will be the same people who will look at the management accounts that are submitted. We may need to get some extra help from within the Department, and we have had offers of extra help from other business areas in the Department so that we can do the process a bit quicker. One individual, who is a qualified accountant, has carried out the financial capability assessments up until now. We probably need another qualified accountant to help with the process so that it does not take too long. The individuals who will do it have the necessary qualifications to carry it out.

Mr Buchanan: The financial capability of all the applicants was decided by one person.

Mr Jack: Yes. There is a process of appeal. An appeals panel has been set up with four panel members, one of whom is a qualified accountant. If organisations are not satisfied after being ruled out on the basis of the financial capability assessment, or any other aspect of the process, they have the opportunity to appeal that decision.

The Chairperson (Mr Swann): What was the main reason that groups were failed on financial capability?

Mr Noble: I do not have the full details, but, for example, three were described by our accountant as insolvent and would have been ruled out on that basis. Others may not have had good cash flow for the first year of the project so would have run into financial difficulties within its first three or four months.

The Chairperson (Mr Swann): Were those reasons queried with the organisations concerned?

Mr Noble: If we asked for further information, we asked for further information, but, obviously —

The Chairperson (Mr Swann): Were those organisations that were ruled out or that failed the financial capability assessment given the opportunity to clarify or explain the reason or reasons that they failed?

Mr Noble: We had planned to do that. We planned to offer them the opportunity to meet us, go through our process and see how we arrived at that decision, before they got to the appeals mechanism. However, we have been overtaken by a series of events and, because the organisations are submitting documentation now, have put that on hold until we get through the first phase.

The Chairperson (Mr Swann): How has that been communicated to those organisations?

Mr Noble: We have communicated with some of them, because, obviously —

The Chairperson (Mr Swann): Some of them?

Mr Jack: All organisations that applied got a letter on Monday to advise them of the decision by the Minister. The organisations that did not submit their management accounts originally and are now being given the opportunity to do so received one letter, while all the other applicants received a slightly different letter to inform them that that letter had gone out but also to give —

The Chairperson (Mr Swann): Will they be given the reason that they were failed on the financial capability assessment? Will they be given the specific reason on which your one accountant failed them?

Mr Noble: Yes, we were planning to do that.

The Chairperson (Mr Swann): "Planning to do it": when?

Mr Noble: We were planning to do that this week, but the sequence of events overtook us on Monday, with the revised letters going out. Their appeals —

The Chairperson (Mr Swann): That is where the confusion lies. What you are offering in the revised letter is not the same thing that you have told me you will offer the organisations. Your revised letter states:

That is contradictory to what you are now telling us.

Mr Noble: For the purposes of clarification, if any project has been ruled out on the basis of the financial capability assessment, because we have asked all the other organisations to submit their management accounts, we will afford them the same opportunity to submit further information and reassess their financial capability. We are not saying at this time that they will be ruled out fully, because we will look at it again. If they submit any documentation, we will review it and offer them the opportunity to meet us and discuss the reasons that we failed them on the basis of the financial capability assessment. We had planned to do that.

Mr Jack: It is really important that we achieve a level playing field. We have written to all the organisations —

The Chairperson (Mr Swann): I want to be very clear about those organisations that were turned down on the basis of the financial capability assessment and have now received a letter. I will read it for you so that this is in Hansard. The letter states:

It continues:

That is in bold. Therefore, most of the organisations have taken that as being your instruction. It then states:

Will the organisations that have been turned down under financial capability be told the reason that they were turned down and be given the opportunity to provide a specific, clear response to that reason, not what it states in that letter?

Mr Jack: Yes, they will. However, it is important that they are not told that until after Monday. Otherwise, they would have an unfair advantage over the other organisations that have yet to submit their management accounts. We considered this very carefully, because it is important that we maintain a level playing field. We offered organisations that did not pass the financial capability assessment the opportunity for feedback. We had planned to have meetings with them.

The Chairperson (Mr Swann): I want this to be clear, Colin. Any organisation that had been turned down under financial capability will be advised of the reason that they were turned down and given the opportunity to provide further clarification and stay in the process to be able to go on to phase 2.

Mr Jack: Well, they will be given the reasons. We have a process. We have reopened that process now so that organisations can —

The Chairperson (Mr Swann): — submit management accounts.

Mr Jack: — submit their management accounts. We need to make sure that, during the period when that process is open, we do not prejudice the outcome of the overall process in any way. The meetings that we had planned to have at this point with the organisations that have not been successful in the financial capability assessment have to be delayed until after Monday, when the other organisations have the opportunity to submit their management accounts. After Monday, we can meet those organisations and have a discussion with them about the reasons that they did not get through the financial capability assessment. At that stage, they can submit an appeal if they are not satisfied.

The Chairperson (Mr Swann): An appeal?

Mr Jack: Yes, after the meeting that I am talking about now, they can submit an appeal. It is part of the feedback and appeal process.

The Chairperson (Mr Swann): Therefore, the letters that you were talking about earlier regarding financial capability are all nonsense, and you are wasting our Committee's time because you are saying that, if anyone was turned down under financial capability, they will have to go to appeal. Which one is it?

Mr Noble: Sorry, for clarification —

Mr Buchanan: It is needed.

Mr Noble: I am sorry. Organisations that were turned down on the financial capability assessment received a letter stating that they had been turned down on the financial capability assessment. The letter offered them an opportunity to meet the managing authority to discuss it.

However, the sequence of events overtook that, and, on Monday, every project got a letter stating that we were changing the process. We are still planning to offer anybody who has been rejected on financial capability the opportunity to meet us and talk through the issues.

The Chairperson (Mr Swann): Have those invites been sent out yet?

Mr Noble: Not yet, no. Sorry, we were waiting for the dust to settle on the letters that they got the other day. Some of them have been in contact with me, because, obviously, when they got the letter, they wanted clarification. I have had two or three projects —

The Chairperson (Mr Swann): They can come in and have a conversation with you about why they were turned down on financial capability, and you will say to them, "Thank you very much for your conversation and explanation. You are still turned down. We are not listening to the reasons that you have provided, and the only option open to you is to go to appeal".

Mr Jack: No, no —

The Chairperson (Mr Swann): That is what you are just after telling me.

Mr Jack: No. If they give us information at those meetings that gives us reason to believe that they would have passed the financial capability assessment —

Mr Ramsey: They have changed that again.

The Chairperson (Mr Swann): That has changed. Colin, you are changing what you have said.

Mr Ramsey: Changed again.

Mr Jack: The issue is that we have sought to carry out the financial capability assessment in an equitable way with all the organisations.

Mr Ramsey: No, you have not.

Mr Jack: We have. We have offered them the opportunity of a meeting before they submit a formal appeal. We went back to them a number of times. If we needed further information as part of the initial process, we went back to organisations and asked them for the information that was needed to conduct the financial capability assessment.

Mr Ramsey: Can you stand over what you said just now that people were asked?

Mr Jack: People were asked for their information. It was in the guidance that people would be asked for further information. In fact, it states on page 1 of the guidance notes:

Any contact with the organisations about financial issues during the process was part of that financial capability assessment. We sent letters to the organisations, letting them know that they did not get through phase 1 because of the financial capability assessment. I believe that those letters went out last Thursday and gave those organisations the opportunity to have a meeting.

The Chairperson (Mr Swann): I thought that you said that they had not gone out.

Mr Jack: Letters went out to the organisations that were not successful at phase 1 because of the financial capability assessment on Thursday of last week.

Mr Ramsey: Asking for meetings.

Mr Jack: No —

The Chairperson (Mr Swann): That was to tell them they were not —

Mr Noble: I will go through the sequence of letters. Last Thursday, the projects that failed their financial capability assessment got a letter saying that their application had been rejected for that reason and offering them an opportunity to meet the managing authority. On Monday, we issued a letter to the 43 projects that failed to submit their management accounts, asking them to submit that documentation. All other applicants, who had either failed or got through the process, also got a letter informing them of what was happening and inviting them to provide any further information relating to financial capability. We planned to send a subsequent letter to the organisations that received a letter on financial capability last Thursday, letting them know of the change to the process because of the letters that went out on Monday and giving them the opportunity to submit their information again by Monday, as per the letter issued on Monday. We will then consider their financial capability assessment again.

The Chairperson (Mr Swann): When will you accept additional information from them?

Mr Noble: Until Monday. The closing date is the same for them.

The Chairperson (Mr Swann): Will you have a meeting with them?

Mr Noble: Yes, after we have carried out the reassessment.

The Chairperson (Mr Swann): When do they go for appeal?

Mr Noble: They go to appeal after they have had a meeting. If we are still in agreement that the decision was the right one, it will go to appeal.

The Chairperson (Mr Swann): If an organisation comes to you and explains its financial capability, and you are satisfied that the application demonstrates financial capability, will it be forwarded straight to phase 2?

Mr Noble: Yes, if it provides additional information that satisfies the criteria.

The Chairperson (Mr Swann): Who will hear that evidence?

Mr Noble: The managing authority, because we made the initial decision.

The Chairperson (Mr Swann): I am trying to get this process clear for the sake of people listening to this who are from organisations that were turned down on financial capability. Let us look at a hypothetical example. I have been turned down on financial capability. I have received four or five letters from you and am now completely confused about where I stand. I have a meeting at which I provide more information on my financial capability and am told, "Yes, Robin, fair enough. Your organisation is now financially capable in our eyes on the basis of that application". Who have I had that meeting with?

Mr Noble: You would have had that meeting with the managing authority.

The Chairperson (Mr Swann): Who?

Mr Noble: Probably me and the accountant.

The Chairperson (Mr Swann): So it is your decision.

Mr Noble: Yes, based on the evidence.

The Chairperson (Mr Swann): Is it solely your decision?

Mr Noble: Well, the accountant —

The Chairperson (Mr Swann): The accountant has already rejected my application on the basis of financial capability. If I have just had this meeting with you and the accountant who turned me down, it will be your decision.

Mr Jack: The decision would be reviewed on the basis of new information.

The Chairperson (Mr Swann): That is what I am saying: it would be your decision.

Mr Noble: Obviously, I will not be part of the appeal process, so —

The Chairperson (Mr Swann): An awful lot of organisations will be glad to hear that.

Mr Noble: We made the original decision, so, if an organisation comes in with new information and we are satisfied that the information is acceptable, we will take the decision to move into phase 2.

Mr Buchanan: A lot has been teased out here, but we have not really got very far, other than being able to say that, because of the flaws identified in the process and all the issues raised by applicants, there is no longer any faith in the management team. That same management team will look at the new information that comes in from the 43 applicants. That needs to be looked at by a completely different team. It is no good sending it back to the same team that looked at it and cast it out.

The other issue arises when organisations submit information or come to the Department to meet somebody to discuss their financial capability. There is no point meeting the accountant who threw out the application out at the start or — I mean no disrespect — you, John. They need to meet someone who is completely separate from what has happened and has an independent view. Otherwise, people will be coming into the same hornets' nest: they are meeting the people who took the original decision. Do you mean to tell me that they will change their decision just because new information comes in? I cannot see it. I have to say this today: there is no confidence in that team to carry out the work on the 43 applications. That has to change.

Mr Jack: That is the team that is there to do it.

Mr Buchanan: The team can be changed.

Mr Jack: The problem is this: if we do not have consistency in the process at this stage, we will not be able to fund organisations from 1 April. We could throw everything out now and bring in a completely new set of people with no experience of the process to look at the applications. We do not have the staff to do that. We might have them in a few months' time when people are made surplus, but we are not in a position now to do anything other than continue with the same team. We are, however, trying to make sure that we build in opportunities for a fair hearing so that an organisation that has not been successful, for whatever reason, fully understands why and has the opportunity to feed in new information that means that they will be successful. Then, if they are still not satisfied, they have the right to appeal to a panel that is completely independent of the process to date. That panel has not yet met, but its members have been identified, and they will get all the information afresh.

Ms Lo: It is a bit of a mess. Colin, you said at the very beginning that you valued the work of the voluntary and community sector, but the perception out there is that new barriers were set up in this round to cull projects in that sector in favour of larger institutions, like the FE colleges. Your reduction of the advance payment from 30% to 10% will make life very difficult for smaller organisations in the community and voluntary sector. By their very nature, they do not have a large reserve. For them, a reduction from 30% to 10% of the whole project funding will be another barrier.

It seems to me that phase 1 is based entirely on the financial capability of these organisations. There is no examination of the quality of the project or the track record of the organisation. Some of these organisations told us that they have had a good, smooth working relationship with you for 20 years but will now be out of the equation. It seems very discriminatory against the voluntary and community sector.

In the FE sector, women's participation has gone up by 60%, mostly thanks to assistance and encouragement from the community and voluntary sector and the women's sector. If you cull the women's sector, there will be reduced participation in the FE colleges. Is this sustainable for the FE sector? We understand that the FE sector will also apply for the funding. Certainly, this process seems to be very biased toward big organisations like FE colleges.

Mr Jack: The process is open to everybody, whether they are in the voluntary and community sector or the statutory sector. I can tell you that projects from the statutory sector, from the FE colleges, were ruled out at phase 1. We do not want to disadvantage any group. The position is that the Commission has an extremely low tolerance of financial error. It is, therefore, important that any organisation that we fund is financially robust and has the necessary cash flow. The Commission has given us 1% up front.

The Chairperson (Mr Swann): You told us that, Colin.

Mr Jack: The problem is that, if the organisations are not financially robust, we will lose the money from Europe: the Commission will not pay it to us. If the Commission finds too high an error rate, the money will not come into the Executive's Budget, thereby creating a further budgetary pressure. We want to fund the organisations. We want the voluntary and community organisations to be financially robust. Giving them three years' funding is our attempt to do that. We know that many funders do not give them three years' funding. It is a difficult situation to be in. We are working under very difficult constraints, but we want to make sure that they have the best opportunity to demonstrate to us that they have the financial capability. We want them to be able to run their projects successfully.

Ms Lo: The European social fund's purpose is to help those who are marginalised and isolated and have difficulties with barriers to employment. Community organisations are best placed to help those groups. I think that many of us here agree with that. However, the way that you scrutinise their financial position makes it so difficult that it will weed them out. Is it possible to have a sliding scale so that the bigger organisations have a smaller percentage and you pay more to the smaller organisations? Is it possible to do it that way?

Mr Jack: Big and small organisations have gone through the process and been successful at stage 1. I do not think that you can draw any conclusions about small organisations. One might intuitively think that small organisations were disadvantaged, but that is not the case. We need the organisations to have the financial capability.

We need other funders. The position with match funding is that we provide 40% funding from ESF, and, historically, DEL provided a 25% contribution, so we have been looking for 35% contributions. We need other match funders to come on board quickly because that helps with financial capability and viability. We are offering organisations opportunities to achieve their objectives at a much lower cost than if they had to fund them fully themselves, and it is important that their decisions on match funding are taken quickly.

Ms Lo: Another big concern in the sector is about being able, because of the cuts to all Departments, to find match funding. How will we get over that?

Mr Jack: The Executive's Budget is a lot lower than it has been in previous years. We hope that we will be in a position to fund a small number of projects and directly match fund them from DEL, but we are relying on other Departments to prioritise these areas of funding on the basis that, for 35% of the money, they get 100% delivery of their objectives.

Ms McGahan: Colin, you say that you do not want any group to be disadvantaged. We do not believe that any group should be disadvantaged because of DEL's failures to conduct the process correctly. You need to be clear about that.

You said that, if you were to get rid of your team, it would mean that groups would not have any funding by 1 April. It has been suggested by some community and voluntary groups that, if the assessment panel were to include an independent element, it would help to build confidence into the process. What is your view on that?

Mr Jack: All assessment panels at phase 2 include people who are independent of DEL —

Ms McGahan: It is my understanding that they do not.

Mr Buchanan: Phase 2 is over.

Mr Jack: Are there any that do not?

Mr Noble: The —

Ms McGahan: Was the community and voluntary sector involved in phase 2 of the process?

Mr Jack: The community and voluntary sector was offered the opportunity to be involved in the process, but it did not accept that opportunity.

Ms McGahan: My understanding is that it was not.

Mr Jack: Well, I —

Ms McGahan: Do you have correspondence?

Mr Jack: I was at a meeting where the Minister offered that opportunity to the Northern Ireland Council for Voluntary Action (NICVA), which is the umbrella organisation for the community and voluntary sector. NICVA took the view that, because it represents the whole sector, it should not get involved in processes that involve the consideration of funding. It has a policy line on that.

Ms Lo: Is anybody from the community and voluntary sector on the panels?

Mr Noble: Not on the panels, no. On the unemployed and inactive panel, there was somebody from one of the councils. On the youth and NEETs panel, we had somebody from OFMDFM. On the disability panel, there was somebody from DFP. On the community and family support programme, there was a representative from the Department of Health, Social Services and Public Safety.

The Chairperson (Mr Swann): Explain the rationale for having somebody from DFP on the disability panel.

Mr Noble: We were trying to get somebody from the disability bracket. We tried the Equality Commission, but, unfortunately, it was unable to give us anybody, obviously in case there were any challenges to it. The other one was —

The Chairperson (Mr Swann): What about health and OFMDFM?

Mr Noble: We had a representative from health on one panel and from OFMDFM on another.

The Chairperson (Mr Swann): Why could you not have had somebody else or the same person on the disability panel?

Mr Noble: We had a nominee from DFP.

The Chairperson (Mr Swann): So, you just took that person and put them on the panel.

Mr Jack: The person from DFP who is involved on the panel has responsibility across the whole structural funds and would have the capability to take part in the process.

The Chairperson (Mr Swann): I do not know the individual. They would have no specific knowledge of disability, but they would understand structural funds. They would look at the finances, so it is back to quantity rather than quality.

Mr Jack: The other members of the panel are not from the ESF managing authority in the Department. They are from across the Department. The person from DEL on the disability panel is from the Disability Employment Service and so would have a lot of expertise on disability issues.

Ms McGahan: Bronwyn, are you getting anywhere?

Ms McGahan: Obviously not, Chair.

Can we not have someone from the community and voluntary sector sitting on the independent assessment panel, given that we are in a crisis?

Mr Jack: We have been through the process as far as we have. Personally, if someone wants to come along in an observer capacity, I have no problem with that. We have not discussed that with the Minister, but I cannot imagine that he would have difficulty with that, if it would help confidence in the process.

Ms McGahan: We need to do something very urgently.

Mr Anderson: Thank you, gentlemen. I am having difficulty knowing where to start. We have gone round in circles for the last hour or more. Do you agree that a good start would be to try to restore some integrity and confidence in the whole programme and process? You told me that 134 applications were received and 43 were rejected from many groups and organisations that have much experience in delivering these programmes. Did the fact that so many from experienced people and groups were being rejected not ring alarm bells? Did it not alert you to the fact that something was wrong and that it needed to be looked at seriously to get to the bottom of it before issuing the rejection letters? Did you also tell us that you made contact with some of these groups to try to get more information?

Mr Jack: We made contact with groups only as part of conducting the financial capability assessment.

Mr Anderson: Did you make contact with all those who had issues with financial capability or just some?

Mr Jack: We made contact with 27 organisations that had not submitted enough —

Mr Anderson: Did any of the groups that you did not contact have an issue with financial capability? The information coming to me is that not all groups were contacted; some were and some were not.

Mr Jack: Some organisations sent us their management accounts, and we had enough information from them.

Mr Anderson: Did you go to all those that were rejected?

Mr Jack: We did not make contact with those that did not submit their management accounts.

Mr Anderson: None of them?

Mr Jack: No, because they had not submitted the documentation.

Mr Anderson: We have heard comments today about emails, phone calls and so on. We will not go into that again. Was there any contact, because there are allegations that contact was made with some organisations and not others?

Mr Jack: I can understand how that perception arose: we had a process of financial capability assessment whereby we had made clear that we would contact organisations for more information about that. I can see how the perception might have arisen that some organisations were contacted by the Department. However, no organisation that I am aware of was contacted by the Department and told that it had not submitted its management accounts and better get them in straightaway or its application would be rejected. Contact was made only with organisations that had submitted management accounts but with insufficient information to complete the financial capability assessment. John, can you confirm that?

Mr Anderson: Why did you not, at the same time, contact the groups that did not submit any accounts and ask them for that information?

Mr Noble: We were following the guidance notes, which said that, if you did not submit any management accounts, your application should be rejected.

Mr Anderson: Throughout the process, you stuck rigidly to the guidance, John.

Mr Noble: Yes.

Mr Anderson: At least we have that on record.

The Chairperson (Mr Swann): John, I have an email here. The addressee has been redacted, but it says:

So you asked for additional management accounts information.

Mr Ramsey: You did not reject such applications.

Mr Jack: That is covered in the final sentence of the first paragraph on the front page of the guidance notes:

The organisation that you are talking about submitted management accounts, but the information in those did not allow the financial capability assessment to be completed.

Mr Ramsey: Colin, you are clearly missing the point. There was selectivity on the part of the Department, and information was sought from groups that are —

The Chairperson (Mr Swann): Why did all of the other organisations that were ruled out under financial capability not receive that same email? Why was the same level of work not done on why they may not be considered on the basis of financial capability?

Mr Jack: In the case of any organisation that submitted any document as its management accounts, if there was not sufficient information in the management accounts to complete the financial capability assessment, it was contacted and asked for additional information.

Mr Ramsey: That is not true. Everybody in the Public Gallery is shaking their head, and they are members of the groups.

Mr Jack: I heard the email being read out, and that situation is consistent with the guidance. The process followed in sending that email is the process set out in the guidance.

Ms Sugden: Even if that is the case, how is that fair? You now suggest that, if I had submitted one cell of a spreadsheet detailing my management accounts, I would have been prompted to submit more information; someone who did not submit that one cell would not have been prompted to submit more information. If that is the guidance, it is a severe misinterpretation of what was supposed to —

The Chairperson (Mr Swann): It allows you to do what you did.

Ms Sugden: Yes. To me, you are trying to justify what you did with words.

Mr Jack: No. The issue is that, in light of the concerns raised, the Minister took the view that it was better to get everybody to send in their management accounts and that, if they needed to send in any supplementary information at this stage that they felt we may not have taken into account, they would get that opportunity.

The Chairperson (Mr Swann): Sydney, have you —

Mr Buchanan: That is to cover your steps. Sending that email was to cover what you did, and now you and the Minister have to cover yourselves by sending it out to the other 43.

Mr Jack: Those steps were part of the process set out in the guidance.

The Chairperson (Mr Swann): The letter is not set out in your guidance.

Mr Anderson: Colin, it is obvious to me that you are saying that the groups have until Monday to resubmit.

Mr Jack: Yes.

Mr Anderson: You also said that lessons had been learnt. I suggest that you have not learnt any lessons in this debate on the management and financial accounts. A lot of the groups were left out. It is obvious that they were not contacted when others were. As Claire said, whether there is one page or 100 pages of accounts, how do you differentiate between that? Someone puts in one page of accounts and you think that it is not enough, so you contact them and ask them to send you more. Someone sends nothing in, so you do not bother contacting them; you just throw them out of the process. How do you work that out? No matter what your guidelines are, you are making guidelines to suit yourself.

Mr Jack: We have a qualified accountant who undertook this process. She has a professional code of ethics to follow and she made the judgement about what information she needed to support the accounts.

The Chairperson (Mr Swann): Clarify that for me, Colin. Did she make the judgement, or did she put a report to a senior — John referred to himself earlier — for him to make the decision? Did the accountant make the decision to exclude them?

Mr Noble: The accountant would have made a recommendation.

The Chairperson (Mr Swann): A recommendation. Right. Who made the decision?

Mr Noble: The final decision would have been made by one of my two deputies or by me, depending on who did the quality assurance on it.

The Chairperson (Mr Swann): It could have been one of three.

Mr Noble: Yes.

The Chairperson (Mr Swann): Using the same criteria or different criteria.

Mr Noble: No, they would have followed the same criteria because they were looking at the same information.

The Chairperson (Mr Swann): So, it is all one.

Mr Anderson: Do you tick boxes here?

Mr Buchanan: That is where the lack of consistency happens. You have three different people looking at all the applications that were rejected or came in. There were three different people looking at them. They may well have been using the same criteria, but there is always that bit of flexibility in everybody.

Mr Ramsey: Or how they interpret it.

Mr Buchanan: Or how they interpret it. There is where the problem lies. That is the answer that we were trying to get earlier but it was being hidden; we could not get it.

The Chairperson (Mr Swann): One recommendation could not have been looked at by two people or even three people; one of those three people looked at those recommendations —

Mr Noble: Yes.

The Chairperson (Mr Swann): — and made that decision.

Mr Noble: And then made the recommendation.

The Chairperson (Mr Swann): That one person decided.

Mr Noble: Yes.

The Chairperson (Mr Swann): Was there no oversight? If it was one of your deputies, was there no oversight or involvement from you?

Mr Noble: I would have been involved in a number of them, yes.

The Chairperson (Mr Swann): No, no, sorry. Do not try to talk back round this.

The accountant made the recommendation to reject on financial capability and passed that recommendation to one of your deputies. If the deputy made the decision that the accountant's recommendation to reject was right, was that the final decision — it was done and nobody else looked at it?

Mr Noble: Yes, that was it.

The Chairperson (Mr Swann): As the manager for the authority, you never looked at any of those organisations.

Mr Noble: There were a couple that I was involved in because one of my deputies was called away to do another piece of work, and I was the person who made the decision on a number of projects. We have documents —

The Chairperson (Mr Swann): That is what I am asking for. There was no review.

Mr Noble: The recommendation came from the accountant, and then it was reviewed —

The Chairperson (Mr Swann): To one of your deputies.

Mr Noble: Yes, and then it was reviewed at that point.

The Chairperson (Mr Swann): I am sorry — the deputy reviewed it.

Mr Noble: One of the deputies, yes.

The Chairperson (Mr Swann): The deputy made the recommendation to reject, and that was it done and dusted.

Mr Anderson: Did you finally sign it off?

Mr Noble: Well, the documentation—

Mr Anderson: Each and every one?

Mr Noble: The letter went out from me.

Mr Anderson: Yes, but the recommendation —

The Chairperson (Mr Swann): You never saw it.

Mr Noble: Yes, I would have seen the recommendations, but I would have respected my colleagues' decisions.

Mr Anderson: You would not have overturned them. You did not overturn any of them. Did you see them?

Mr Noble: I saw a couple of them — the ones I was involved in.

Mr Anderson: Only two out of 43?

Mr Noble: I could not say an exact number. I would have reviewed a number of them, and I did overturn a number of them.

Mr Anderson: What we are hearing —

The Chairperson (Mr Swann): I am sorry, Sydney. Fra wanted to come in.

Mr F McCann: I was starting to feel left out there, Chairperson.

Obviously, quite a lot of water has gone under the bridge since 10.00 am. Thanks for the presentation, anyway. I just wanted to touch on the accounting because a lot of store has been put on the accounting and the information. I was at a meeting yesterday attended by several accountants who are part of this process and who seriously question the process that was used for SMART targets and financial capability assessments.

I understand that, in the rough and tumble of a grants system, there will be winners and losers, but, given the wide experience in most of the groups that made applications, I am surprised that it took the Committee and then the Minister to overturn a decision. I thought that somebody would have said that something was wrong. So many good groups that have delivered an excellent service have fallen at the first stage. I would have thought that, at that stage, either through individual calls or rather, as Pat said, the selective call to selected groups, somebody would have been in touch with people to tell them that there was a problem, tell them what the problem is and give them the opportunity to take further part in the thing. That is a crucial thing. Colin, you have recognised the excellence of service delivery that these groups have provided over the years.

There is another point that needs to be made. Given that expertise and experience, when people looked at the criteria that would be applied, they must have understood that the very groups that we are talking about — most of them are sitting in the Public Gallery — would have fallen at the first hurdle because most of them do not have the cash reserves or the bank accounts to carry them through. They have not had that for 20 years, but they have been able to deliver an excellent service. The system seems to be designed in such a way, as somebody said earlier, to cull many of those groups.

I have a problem with that because statutory groups and further education colleges may be sitting on millions of pounds that they can fall back on; whereas most of these groups cannot do that. That is another thing. There seems to have been a very negative response from the people sitting behind you in the Public Gallery — I know that you cannot see them — to a lot of the stuff that you were saying there. Obviously, there is a problem with the information that you are giving to us, as they understand it, and something needs to happen there. I would have thought that, at the early stages, if there was a problem, you would have brought everyone together to talk the whole thing through, find out what the problem is and whether it was your problem or whether there was a misunderstanding with the applications. I understand that the application documents were sizeable in the first place.

You said that it may not be normal to carry out a full EQIA, but it is supposed to look at disadvantage and whether different groups would be disadvantaged. The women's sector especially is completely disadvantaged across the board. The decisions and consequences of what has happened will put that sector in complete meltdown.

One of the things that has not really been mentioned in the whole thing is not only the loss of services to thousands of people when many of these groups fall but jobs. We hear day and daily about Bombardier and JTI Gallaher and there is a total outcry, rightly, about those jobs going, but when it comes to the community and voluntary sector, because there is no recognition at departmental level in many ways, of the excellent work that they do and the worth of that sector, it is just by the by that jobs could go. If Invest NI tried to replace those jobs it would spend multiple millions in doing so. With the groups behind you and those that have been knocked back up to now, we get good value for the money that we put in for them and the services that they deliver.

Mr Jack: I agree with much of what you say. You suggested bringing everyone together. If we were developing a new policy on something, that is clearly the approach that we would adopt. We would consult and have workshops and so on. We have done a lot of work, for example, in the NEETs area, for which I am responsible. We work with the NEETs strategy forum, which comprises the voluntary and community organisations that are working with young people, and we do the same with other groups.

We have tried to design this process so that we have funding available for whoever we are in a position to fund, at the end of the day, from 1 April. We do not want to see a loss of jobs. There will inevitably be some changes in the organisations that we fund from the current round to the next one, but we want organisations to have the best opportunity possible to have continuity of operation and we have worked hard to try to achieve that.

Organisations working with women are one of the categories of groups from which we invited applications, and we have supported women's organisations in the current programme. They have done good work. Some of the organisations that have got through stage 1 of the process are women's organisations. That group of organisations that has gone through is not complete, because I expect that there will be organisations that will get through to it now as a result of getting this further opportunity to submit the financial information. We want to see the voluntary and community sector and the statutory sector working together to give people who face barriers to employability a fair chance. It is they who will benefit from this programme — people from the most disadvantaged areas.

The Chairperson (Mr Swann): Colin, you know that we are aware of that. I know that you are filibustering, if that is the phrase.

Mr Jack: We want to see the best outcomes for them.

Mr F McCann: I am not saying that further education colleges do not provide courses and things for the most disadvantaged and thing, but the people who deal with NEETs and with real disadvantage are sitting behind me in the Public Gallery. It should have rung alarm bells that there were serious problems, all the more so because the majority of people affected come from one sector — the women sector. I understand that some of the women's sector groups have got through, but the information that we are getting is that up to 90% of what the women sector provides could be seriously damaged or limited because of that initial stage of this thing.

Given those alarm bells, people should have been brought together, contacted and taken through the process; they should have been given an opportunity. Most of the statutory groups — you mentioned councils, John — the colleges and other statutory organisations have the professional wherewithal to ensure that that is done; they have people specially paid to deal with applications. It goes back to organisations having cash reserves. Other organisations live hand to mouth, day and daily, trying to provide a service. That should have been taken into consideration when people looked at the criteria; because it was not, you have nearly wiped out quite a number of local groups.

I think that we need to ask the Minister to come to the Committee. At the end of the day, the decisions made to date have been signed off by the Minister. If that is not forthcoming, the Committee should bring the matter to the Floor of the Chamber, however it can be done, whether by urgent motion or question for urgent oral answer. The Minister needs to make himself available to answer to the Assembly and, more important, to give answers to the people who are sitting not only in the public gallery but in the Great Hall.

The Chairperson (Mr Swann): That is a fair point, Fra, and we will come to that firm recommendation once we finish this.

Mr Ramsey: I would like something clarified. I am still not clear in my head about this. There were 43 groups that did not provide management accounts, and they have been written to and will be given a further opportunity on Monday. However, a number of groups were turned down because they failed in respect of financial capability.

The Chairperson (Mr Swann): How many groups were failed on that account? I am trying to get the numbers here.

Mr Jack: There were 134 applications. Forty-three groups have received one letter; the remainder have received a different letter telling them that the opportunity —

The Chairperson (Mr Swann): Hold on, Colin; give me specific facts. John said earlier that it was 66.

Mr Jack: Ninety-one organisations got the letter telling them that the other organisations, which did not submit management accounts, have been given the opportunity to submit them, and, if they, the 91, wish to submit anything further that they want to be taken into account in respect of financial capability, they —

Mr Ramsey: I am lost. The numbers are not working out.

The Chairperson (Mr Swann): John —

Mr Noble: About 15 or 16 applicants were ruled out on financial capability.

The Chairperson (Mr Swann): You told us earlier that it was 27.

Mr Ramsey: So, 43 —

Mr Noble: I think that 27 was the number of organisations that we had contacted for additional information. Sorry.

Mr Ramsey: Just to clarify, because, contrary to what you said, a number of groups — if I take it at 17 — failed because their financial capabilities were not acceptable. We are accepting that there were 17.

Mr Noble: Yes, I think that that is right, based on my information.

Mr Ramsey: OK. So those 17 groups, up to date, have written to the Department seeking the reason and the justification as to why they were turned down, and none of them has got any responses whatsoever, because you are refusing to give them responses. Will the Department enable those who were turned down on grounds of failing in their financial capabilities to have the opportunity to submit updated accounts in light of all the misinformation, the confusion and the uncertainty?

Mr Jack: Yes, they have that opportunity by the same deadline of 10 o'clock —

Mr Ramsey: When will they know that?

Mr Jack: They got a letter on Monday at the same time as the organisations that are submitting their accounts in full.

Mr Ramsey: Will they be told why they were refused?

Mr Jack: They got a letter on Thursday telling them that they had not been successful at stage 1 because they had not got through the —

Mr Ramsey: Colin, I have e-mail after e-mail after e-mail from people saying that they made repeated requests to you, John, for information, and you have refused to give them the reason why they were turned down.

Mr Jack: They —

Mr Ramsey: Sorry, Colin —

Mr Noble: Let me answer. Yes, we have refused to give them any feedback until after Monday when all the other people have sent in their documentation. We had planned then to give them an opportunity —

Mr Ramsey: After Monday. After the deadline when they could submit new information. That is a waste of time, Chair.

The Chairperson (Mr Swann): No, this is the earlier process. This is when they get the opportunity maybe to go to an appeal after they have met John and the accountant. That is the nonsense that we went through earlier, Pat.

Mr Noble: I explained earlier, and maybe I was not clear —

Mr Ramsey: Clearly not.

Mr Noble: — and apologies if I was not. The idea was that we were going to give those who had got a letter saying that they had been rejected on financial capability an opportunity to meet us. However, as Colin outlined, the letter that went out on Monday overtook that sequence of events, but anyone who has failed on financial capability will be given an opportunity to meet us to talk —

Mr Ramsey: Will it be face to face, and will they be able to present additional information that you will readily accept?

Mr Noble: Yes.

Mr Ramsey: I have a final question on the appeals process regarding people who make a formal appeal. Irrespective of what the process is after all these applications have been reviewed again, can you explain in detail the time frame for the appeals? Will the first one be a review, or will the second one be an appeal? When is the closure? Give us exactly the process for those.

Mr Noble: Do you mean the general terms for an appeal, or do you mean on financial capability?

Mr Ramsey: I mean in the process of appeal.

Mr Noble: OK. Once an organisation receives a letter from us saying that its application has been rejected, and obviously it will tell them why it has been rejected, it then has up to 7 days — five working days— to submit an appeal. All the documentation would then go to an independent appeals panel that we have set up to hear the appeal. We are planning that the appeals will not be heard, because of the change to the process, until between 10 March and 13 March, depending on the diaries of panel members, because we have to consult them again. Around that time, we hope to convene the appeals panel that will hear all the appeals from phase 1 and phase 2.

Mr Anderson: I just cannot get my head round these numbers. At the very outset of your presentation, you said that 43 did not submit management accounts.

Mr Jack: That is right.

Mr Anderson: You also told us — I have taken a note — that 66 went through phase 2, have been scored and are now completed, and scored for funding from 1 April 2015.

Mr Jack: No; there are 66 —

Mr Anderson: That is what you said at the very start, because I took a note of it.

Mr Jack: No, I said that 66 organisations had been through the stage-2 process, and a number of those have scored off the quality threshold, but those now have to be held —

Mr Anderson: I wrote down here, "Word for funding from 1 April". I did not make that up.

Mr Jack: They scored sufficiently to be considered for funding, should sufficient funding be available.

Mr Anderson: OK, but 66 and 43 equals 109.

Mr Jack: Yes, other organisations have not been successful at phase 1 for reasons other than not submitting the management plans.

Mr Anderson: This is my final question. Sixty-six organisations have gone through the process and 43 can come back into the process by Monday. Is that right?

Mr Jack: Yes, but any organisation that wishes us to take into account further information as part of its management accounts has the opportunity to provide that information.

Mr Anderson: If those organisations come in by Monday and are successful, how does that equate with the 66 as regards the funding? What if they score higher than some of the 66 that have already been through the process? Are we not caught in a situation where the whole thing needs to go back to square one? How do you get over this issue?

Mr Jack: I am saying that 66 were considered. Not all of them scored sufficiently to be funded, but many did.

Mr Buchanan: How many?

Mr Jack: The problem is that, until we see the value of successful applications against the budget, we cannot say how many are successful in getting funding. Those are held. We need to consider them further. If the organisations submit their management accounts, we need to do the financial capability assessment on them. If they are successful in that and in all the other requirements of stage 1, the stage 2 panels will reconvene to consider the applications and they will be put into the bank of applications that have been successful at phase 2.

Mr Anderson: Along with the 66?

The Chairperson (Mr Swann): They will be scored, Sydney.

Mr Jack: Along with those of the 66 that have passed the equality threshold. We will then have to take a decision on —

The Chairperson (Mr Swann): Unfortunately, folks, the Health Committee will meet here at 2.00 pm, so we are pushed for time. We have talked about the numbers: 134 applications; 43 for management accounts; 66 at phase 2; 17 for financial capability; and the rest of them have been ruled out.

Mr Noble: For other reasons such as value for money and not having SMART objectives.

The Chairperson (Mr Swann): Was having SMART objectives one of your scoring mechanisms?

Mr Noble: Yes.

The Chairperson (Mr Swann): Does it say that in the guidance notes?

Mr Noble: Yes.

The Chairperson (Mr Swann): Will you stand over that?

Mr Ramsey: Everybody behind you is shaking their head.

Mr Noble: It is in the guidance notes.

The Chairperson (Mr Swann): That it is a scoring objective.

Mr F McCann: Was it part of the European thing?

Mr Noble: It was also part of phase 1 criteria.

Mr F McCann: Is that set by yourselves or by Europe?

Mr Noble: We drafted the guidance notes, so it was set by us.

The Chairperson (Mr Swann): SMART objectives are in there as well.

Mr Noble: I will give you a quick explanation. SMART objectives have a very straightforward focus on economic appraisal. If an objective is not SMART, it will fail at the economic appraisal stage.

The Chairperson (Mr Swann): Were SMART objectives clearly identified as a scoring mechanism in the ESF application form?

Mr Noble: Yes, for the applications that went through to scoring.

The Chairperson (Mr Swann): Went through?

Mr Noble: Went through to phase 2.

The Chairperson (Mr Swann): Were they excluded at phase 2 if they did not have SMART objectives?

Mr Noble: Yes.

The Chairperson (Mr Swann): Were they given an opportunity to clarify?

Mr Noble: My understanding is that only one or two organisations —

The Chairperson (Mr Swann): The numbers do not matter. Were they given an opportunity to clarify?

Mr Noble: No.

The Chairperson (Mr Swann): Will they be?

Mr Noble: They can go through the appeals process.

The Chairperson (Mr Swann): They can make an appeal.

Ms McGahan: Chair, are SMART targets part of the scoring process?

The Chairperson (Mr Swann): At phase 2 apparently. Not at phase 1.

Mr Noble: At phase 1, it was clearly outlined that we wanted SMART objectives in the first phase or, if they were not SMART objectives, they —

Mr Ramsey: You are changing it again.

Ms McGahan: It was not part of the first process.

The Chairperson (Mr Swann): SMART was not part of phase 1.

Mr Ramsey: He is saying that it is.

Mr Noble: Sorry, it is in phase 1.

The Chairperson (Mr Swann): You told me two minutes ago that it was phase 2.

Mr Noble: No, sorry, I said that the ones that were ruled out at phase 1 did not meet SMART objectives and that it was also part of phase 2.

Ms McGahan: So it was part of phase 1.

Mr Noble: Phase 1 asks whether the objectives are SMART. It says:

It was part of phase 1, but it will also be part of phase 2 and the scoring mechanism.

Mr Ramsey: It is unfair, as the Chair said, if two groups were rejected because of SMART. You are telling me that they are the only two groups from 134 applications that need to appeal.

The Chairperson (Mr Swann): That have to go to appeal rather than having the opportunity to —

Mr Noble: Can I clarify? The guidance was drafted on the basis of our experience over the last number of years in managing the programme and based on the fact that it is a Commission programme.

The Commission is very hung up on our following our detailed guidance and criteria. For example, the current programme has been interrupted on a number of occasions simply because we did not follow the process. We try to follow the guidance as best we can.

The Chairperson (Mr Swann): I will finish on this. Colin, as the responsible manager here, can you sit before the Committee confident that your process will not be subject to judicial review or legal challenge at this stage? Do you have that confidence? I need a yes or a no.

Mr Jack: You can never be completely clear about that. The Minister has taken a reasonable decision in the last few days to allow organisations to submit their management accounts. If there was any lack of clarity, that decision should overcome it.

The Chairperson (Mr Swann): Colin, John and Briege, honestly, thank you for your time. It has been a long session, but I appreciate the input.

Members, there is a firm recommendation coming out of this. Fra, your recommendation is that we ask the Minister to take a full hands-on overlook at this as soon as possible and, if necessary, we reconvene on Monday or Tuesday.

Mr Ramsey: The departmental officials should be with the Committee again next week to give us another briefing on the process and to see how things are progressing.

Mr F McCann: If the Minister fails to come, we need to bring it to the Floor of the Assembly so that we can get answers.

The Chairperson (Mr Swann): Are members content with that?

Mr Jack: We need to move on with the process.

The Chairperson (Mr Swann): Yes, we are moving on. Thanks, Colin.