A WIGAN community group, set up to help people perform music, has had its council funding stopped and been ordered to pay back the £96,000 it has already received.
Pier-based 21:12 was awarded £190,000 over three years from town hall bosses as part of the Community Investment Fund launched last year.
But less than 12 months later it has been told that, because it has failed to meet any targets or show any record of how the money has been spent, it won’t get a penny more.
Wigan Council had £2m from reserves to invest in local community groups to perform certain functions that budget cuts had prevented them from fulfilling.
One of the major beneficiaries was 21:12 with those making the decision of where the investment should go very impressed with its ideas and what the organisation - based at Eckersley Mill - could bring to the community in terms of giving people a place to record and perform music.
Earlier this year though, an investigation was launched after two former managers wrote official complaints about the way it was being run by founder Phill Knight with allegations centring around the mismanagement of funds.
The council began looking into these matters on top of its routine six-month evaluation and now says staff have “hit a brick wall” in terms of finding any evidence of how money has been spent and also the lack of compliance from 21:12.
Assistant director of strategy and partnerships at Wigan Council, James Winterbottom, said: “The agreement was that the performance in Year One would determine whether they get any or some of the future investment.
“We’ve been going through that process over the last few months. The allegations came up and we put some investigation into that through our internal audit unit.
“Meanwhile we’ve carrying out our evaluation as well. We’ve not been able to engage properly through that process and our evaluation has given us no assurance of their ability to deliver the outcomes they had promised.
“I have written to them saying we would not be funding them anymore; they’ve not met the expectations that we set out.
“There were a number of outcomes that we were working towards surrounding young people in NEET (not in employment, education or training) through their intervention.
“There were certain targets we set for them with regards to that and there is no evidence they’ve met them and I’ve written out to them that the investment deal is done and we are going to seek to recover as much of the money we can because of their lack of engagement.
“The risk for us has crept up and up. We keep trying to meet with them, it’s not been straightforward.”
The failure of 21:12 is in sharp contrast with the other 18 community groups that received investment such as Trust in Leigh, Orrell’s Greenslate community farm and Sunshine House which have all proved successful.
The council will now continue its evaluation, with Mr Winterbottom admitting that the council has no idea where the £96,000 has gone and will be looking to recoup the full amount.
“That is where we are now,” he added.
“As part of the investment agreement we had an understanding of the things they were looking to put into place with that cash.
“We can’t see any evidence that that’s the case so, as far as we’re concerned, the money is there for us to reclaim.
“We need to get into that legal process. I’ve explained to them that that is what we are going to do now.
“We’re looking after public money and we want to make sure we have the right safeguards in place and this evaluation was a key part in making sure we did it.”
Mr Winterbottom defended the council’s decision to invest in 21:12 saying “it is still a great idea” but believes there is just too much risk going forward to trust it with any more public money.
At the beginning of the investment, Mr Knight publicly stated the organisation would provide “complete transparency”. However, the council says it has been faced with the total opposite. One key decision now is what to do with the £94,000 that was due to be invested over the next two years.
“We need to look at that now,” added Mr Winterbottom.
“In terms of potential, it could be used in the investment fund as we take that forward.
“The decisions on allocating those reserves will be lined up with the budget-setting process. Hopefully we can use it to fund other ideas.”
The Observer attempted to contact 21:12 for a response but they had not responded as the Observer went to press.