Novas Scarman in funding dispute with Marsh Farm
A social enterprise fears for its future after reaching deadlock with one of its partners in a dispute over withheld funding, New Start has learned.
Marsh Farm Outreach claims that is unable to repay grant money to a funder for a project that was not completed because Novas Scarman Group (NSG) is withholding £125,000 of the money it was keeping in trust for the Luton-based organisation.
The dispute hit a stalemate last week after NSG's offer to return just £80,000 of the £130,000 grant, secured from Learning Skills Council (LSC), after taking deductions for costs including staffing.
But Marsh Farm Outreach argues that the deductions should total no more than £5,000 for computer software and management fees.
Spokesperson Glenn Jenkins insists that charges for staffing costs are unfair because the work carried out by NSG staff was minimal and part of their remit to work with community groups throughout the east of England.
'If NSG insist on keeping the money we would be in big trouble as we could not and would not pay that kind of money for work which was never carried out,' says Mr Jenkins.
'NSG are behaving in a highly dubious way which could disable our organisation and cost the unemployed people of Marsh Farm the hard earned, once in a lifetime opportunity to deliver the UK's first ever Organisation Workshop.'
The LSC grant was to pay for mentors in the UK’s first Organisation Workshop (OW) project. Organisation Workshop is an organisational development programme aimed at boosting enterprise and job creation in deprived areas.
In May 2008, the Novas Scarman Group received £130k from the Learning and Skills Council to act as the accountable body (AB) for the programme of community and social enterprise development work at Marsh Farm.
But Government Office East and Luton Council objected to NSG playing that role after it was put under investigation by the Housing Corporation for financial irregularities. Following the investigation the Tenants Services Authority, which took up the inquiry, found insufficient evidence of misconduct.
Mr Jenkins said the problems were compounded by major staff changes at NSG during the same time period, which gave Marsh Farm Outreach 'no choice but to terminate negotiations and seek AB support elsewhere'.
He claimed that attempts to recover the money from NSG had failed, delaying delivery of the project.
'Eventually, the LSC had to take the grant back due to time running out on delivery and we had to reduce the scale of the project as a result,' said Mr Jenkins.
'NSG have responded and are saying they want to charge more than £40k even though our proposed contract with them was never signed and the AB role never happened.'
A spokesperson for NSG confirmed that the group would be meeting with Marsh Farm representatives today.
A statement by Susie Parsons, interim group chief executive for NSG, said: 'In August 2009 Novas Scarman was informed by Marsh Farm Outreach that the group was no longer required to act as the accountable body and requested to transfer the funding to Marsh Farm Outreach.
'The group did not consider it could pay funds belonging to the LSC to another organisation and therefore contacted the LSC for advice.
'In January 2010, the group received a letter from the LSC requesting that the funding be returned to them but the LSC has now asked the Group to pay the funds to Marsh Farm Outreach, less costs incurred.
'Marsh Farm Outreach is disputing these costs and the Novas Scarman Group is seeking to resolve the matter with them.'
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