An independent review by management consultants Deloitte has confirmed the London Assembly’s concerns about the processes used by the London Development Agency (LDA) to manage and monitor grants to six cultural projects, worth over £18m. A report last year by the Assembly’s Economic Development, Culture, Sport and Tourism Committee (EDCST) concluded that the LDA’s processes and procedures were seriously flawed (see AP159), but the LDA rejected the findings of the review and produced around 500 additional documents, which they claimed would alter the outcome. However, a new report based on the additional evidence draws similar conclusions. EDCST Chair, Dee Doocey AM, said, “It is very clear that the LDA has mismanaged public funds – not surprising, considering that by their own admission they have even mishandled our review.” The latest report criticises the LDA for having unclear anticipated outputs and monitoring processes for the projects under investigation. Four of the six projects did not meet expectations for impact assessment, and there was “incomplete adherence with the 2005 guidance on monitoring, evaluation and audit”.
The six cultural projects that were subject to the review received more than a quarter of the total LDA funding for cultural projects. Many are ongoing, including the largest, the troubled Rich Mix in East London, for which the LDA has now provided £8m, after initially pledging just £3.7m towards its £21m budget. The project has recently required additional funding from the LDA to complete its fit-out and to carry out business development work, including a new business plan. Arts Council England (ACE) has also allocated an additional £1.1m of top-up Lottery funding to Rich Mix, taking its own total to £7m, including £150,000 cashflow support to April 2007. Rich Mix received a total of £1.15m in ACE regular funding between 2005 and 2007, which will rise to £704,000 annually by 2010/11. The organisation was originally scheduled to open in 2004 (see AP25), yet is still described by ACE as being “currently in development”. An Arts Council spokesperson recently told AP that the organisation “…should be in a position to start renting out all its work spaces and increase its earned income from April 2008”.