Police investigation turns to web group

It has emerged that the investigations into the London Development Agency funding controversy involve design consultancy Ph Creative.

The police are currently examining several cases of possible corruption and fraud at the LDA and its partners. The allegations involve hundreds of thousands of pounds from the public purse. A group of cross-party MPs is calling for a further independent inquiry into the allegations, one of which centres on the failed delivery of a website, partly designed by Ph Creative.

The Diversity Dividend website was conceived as the centrepiece of the LDA’s £9.8m Diversity Works for London programme, providing a diagnostic tool for corporations to assess their equality programmes.

The LDA paid a total of £346 625 to the now-defunct organisation Diversity International to deliver the website. Appointed in March 2005, DI was supposed to complete the website in May the same year. In what the LDA claims was a breach of its agreement, DI sub-contracted some of the work to Web design consultancy Ph Creative.

‘The contract with DI did not run smoothly, with delays and technical flaws in the product,’ reports the LDA in its internal review of the allegations, published earlier this month. ‘However, the trial of the system did eventually commence, later than scheduled, in January 2006.’

Ph Creative worked on the website for about 12 months in 2005-2006, until DI declared that it was going into liquidation in May. Ph Creative managing director Bryan Adams claims that his company was so severely underpaid for its work that the consultancy nearly folded. He declines to reveal the amount Ph Creative was contracted to receive.

‘We worked for a long time on promises of being paid that did not materialise. We were a young company that was trying to grow and I feel that we were very unfairly treated by DI,’ says Adams.

Ph Creative says it is looking to save its reputation but does not intend to try to claw back any cash from DI, whose liquidators report to have assets of about £15 000, but which owes about £200 000 to HM Revenue and Customs. ‘I am not seeking any recompense, I just don’t want to be tarred with the same brush as DI,’ says Adams.

Three MPs are calling for the LDA to launch an independent inquiry: Labour’s Kate Hoey, Conservative MP Greg Hands and Liberal Democrat Lynne Featherstone.

Prior to her election to Parliament as MP for Hornsey and Wood Green in 1997, Featherstone owned and managed the consultancy Inhouse Outhouse Design. She believes that the allegations are likely to damage the relationship between the LDA and its business partners.

‘The LDA is such an important funding body that its partners need complete assurance that it has structures in place to prevent these kinds of problems,’ says Featherstone.

The LDA says it paid a settlement of £26 000 to Ph Creative to secure the rights to the website. The site and diagnostic tool are now in full use by the LDA in its Diversity Works for London website.

An LDA spokeswoman responded saying, ‘We want to find out what happened to the money we paid to DI, and see if there was any wrongdoing involved.’ ‘There is nothing in our documentation that suggests that we have done anything wrong, but if the recipients of our money have, then we want the police to intervene.’

The police investigation is ongoing.



Allegations under investigation

Brixton Base – community radio station received £230 000 to develop a ‘creative training hub’, which was not used for that purpose

European Federation of Black Women Business Owners – received £36 900 from the London Development Agency but was a dormant company, according to the LDA

Deshbangla Foundation – received £30 000 in LDA grants that ‘vanished’ because the foundation never filed any accounts

Diversity International – received £295 000 to develop a website, and was then overpaid a further £51 625. The website was only partially delivered and DI went into liquidation