How the correct course was never a serious option
Why was the £2.2m BTI scandal allowed to happen? Blame the cossetted, cocooned civil service elite in Northern Ireland, argues Robin Wilson
What does the Bioscience and Technology Institute (BTI) fiasco tell us about how we are governed? This is a story of how a small group of individuals drawn from a narrow social and political elite could mis-spend significant amounts of public money — and then get away with it. Why?
The first answer is that the UK is a mediocre performer when it comes to arrangements for government accountability. A recent study, supported by a respected German foundation, placed it 16th out of 30 OECD countries.
The UK also failed to shine on the more specific issue of how agencies such as BTI were monitored by government.
The top performers were the Scandinavian countries. These are famous for their relative social equality and generous welfare states, which favour public engagement and open democracy.
By contrast, the UK is infamous for being governed by a closed caste of powerful individuals, drawn mainly from public school and Oxbridge.
David Cameron — scion of generations of City stockbrokers and educated at Eton and Oxford — could not embody this elite more perfectly.
In Northern Ireland, it is even worse. A toxic cocktail is at work here, militating against public accountability.
The selective education system and sectarian division have conspired to reproduce a social milieu, concentrated along the southern and northern shores of Belfast Lough, of cocooned, conservative, mainly Protestant individuals, uncritically enamoured of Whitehall ways. They dominate the civil service at the top level and are disproportionately beneficiaries of public appointments.
The thinking behind BTI was typical of the inward-looking, laissez-faire approach to policy characteristic of this social stratum.
The institute was launched in 2000 at Hillsborough Castle by the then First Minister, David Trimble.
The Industrial Development Board (IDB), which preceded Invest NI, along with another Department of Enterprise, Trade and Investment (Deti) agency, the Industrial Research and Technology Unit (IRTU), and the International Fund for Ireland (IFI), stumped up public money for it.
The project was to establish a facility on the City Hospital site in Belfast to attract firms in the emerging biotechnology sector. It quickly collapsed, having wasted, according to the Audit Office, £2.2m of public funds. This included different funders being billed for the same expenditures.
It was a catalogue of disasters. The IDB-backed the project in spite of an inadequate business case. The BTI board failed to produce minutes of meetings for 21 months and a relevant IDB file has vanished from Invest NI archives.
Although the project relied on face-to-face contact with health professionals, the facility was moved to Belfast Harbour Estate.
That followed a six-figure ‘finder’s fee’, partly paid to an offshore account controlled by a BTI board member, regular Deti public appointee, Teresa Townsley.
An inquiry by the Public Accounts Committee at Stormont found a culture of “cronyism” in the top echelons of the IDB and a “cosy relationship” between Deti and Ms Townsley.
Her accountancy firm (which she ran with husband, Michael) supplied services to the BTI, in spite of the conflict of interest.
Under direct rule in 2006, the Westminster Public Accounts Committee previously found that the Townsleys’ accountancy firm had similarly provided services to the Emerging Business Trust (EBT), established in 1996 to offer loans to small businesses, for which it received £1.4m in fees.
The EBT had been supported by the Local Enterprise Development Unit.
Ms Townsley was a board member, a relationship described by the Westminster PAC as “one of the worst cases of conflict of interest and impropriety that this committee has seen”.
The committee said Deti had “plumbed new depths” in failing to ensure that “basic principles of the proper conduct of public business” were ensured. Greater awareness of international models of good practice in sectoral industrial innovation would have suggested a more social and collaborative approach than that taken with the BTI.
In Germany, the public Fraunhofer institutes helps develop links between researchers and industry. BTI was developed on a ‘build it and they will come’ basis. The problem was: they didn’t.
The Stormont PAC wants Deti to bring in the PSNI to investigate aspects of the scandal. No heads have rolled. Ms Townsley is in Barcelona, running a yachting school.
Robin Wilson is a policy analyst and writer