THE MINISTER FOR BUSINESS, INNOVATION & SKILLS HAS BEEN USING INNOVATIVE SKILLS TO HIDE BUSINESS FAILURE

When Lord Mandelson returned to UK politics, the Westminster wags joked that he would become Minister for Funny Business. What they couldn’t have known was precisely how clever he’d be in disguising massive taxpayer losses.

As two major press titles reported yesterday, Mandy’s DoBIS lost 93 pence in the Pound on every venture it backed under the Regional Venture Capital Fund (RVCF). The FT in particular noted how Whitehall’s auditing watchdog (the NAO) was ‘highly critical’ of the scheme, highlighting one particular example where £74 million was turned into £5 million: a classic case, perhaps, of Queen Midas in Reverse.

Other figures from the report (seen by The Slogger) show how badly the scheme compares with other similar ventures among EU member-States. On average, RVCFs were 36 times worse than overseas equivalents in the value for money achieved by taxpayers. In professional fees alone on just £130 million of investment, Mandy’s cowboy outfit shelled out a staggering £46 million. All up, the RVCF initiative’s goal average during its lifetime was Profits 45, Write-Offs 189.

But Lord Mandelson is a devil for the packaging. Go to his Department’s website, and this little gem greets the reader:

‘Government funds [in RVCFs] are subordinated to reduce the risk to other investors in the light of historically less attractive returns from this sector…’

‘Historically less attractive’ – isn’t that a corker? How bad it must have been before RVCFs came along and reduced the loss/profit ratio to a mere 4:1. But then we see a way out for He Who Must Not Be Blamed:

‘The Enterprise Capital Fund (ECF) programme has now superseded the RVCFs’.

Ah, right: so that means it’ll all be OK from now on, does it? It certainly sounds like it, as ECFs are heralded as addressing

‘a market weakness in the provision of equity finance to SMEs by using Government funding alongside private sector investment…’

Er..but hang on Mandy: wasn’t that what the RVCFs were supposed to do? It was indeed, for the ECFs will

‘aim to alleviate what would otherwise present a significant barrier to enterprise and to productivity growth’.

Hmm. That barrier being…..The Department of Business, Innovation & Skills? No, not exactly….or rather,not any more: you see, having learned his lesson on the subject of risk, Peter Mandelson wants the blame for this new mess in the making to be relocated elsewhere. So it is that

‘…responsibility for the management of ECFs along with BIS’s other equity funds and the Small Firms Loan Guarantee (SFLG) was transferred to a new body, Capital for Enterprise Limited (CfEL]. This was aimed at improving the selection and management of the funds..’

Well Mandy, 144 write-offs out of 189 would certainly suggest a need for better selection.

This is the sort of brainless waste of our money going on behind a facade of Ashcrofts, invented Newscorp deals, and imagined Daily Telegraph plots against Labour that are Peter Mandelson’s stock in trade. The Lordly Minister’s meddling in business is as uninformed and inaccurate as his media accusations.