Norfolk

King's Lynn Innovation Centre cost claims 'dismissed' by council

Klic
Image caption King's Lynn and West Norfolk Council loaned NWES £2.75m towards the King's Lynn Innovation Centre (Klic)

A council "dismissed" an attempt to claim tens of thousands of pounds from it for time spent by two businessmen on a controversial building project.

King's Lynn and West Norfolk Borough Council rejected £63,000 costs submitted for Kevin Horne and John Balch's work on the King's Lynn West Innovation Centre (KLIC).

The council says the claims had nothing to do with the construction work.

The pair said their time was paid for by funds from their own company.

Documents obtained under the Freedom of Information Act detail costs submitted by Norfolk and Waveney Enterprise Services (NWES) in order to draw down a £337,000 tranche of loan money allocated by the council for the project, before construction started in March 2015.

Image copyright Archant
Image caption John Balch's firm Nautilus Associates was awarded contracts by NWES while he was the agency's strategic director

The centre, which was completed in June 2016, provided office space to small businesses, along with business support provided by NWES.

One section of the costs lists 22 separate entries for Mr Balch, a former NWES director, totalling £46,000.

But the records show this amount was subtracted by the council when it released the funds to NWES, the construction partner.

The council said the "costs were dismissed by us because they did not relate to the KLIC building or its construction".

Mr Balch told the BBC when drawing down the money NWES included all appropriate staff time as match funding.

NWES had agreed to contribute £500,000 towards the construction costs with the council providing £3.75m in loans and grants.

Image copyright Archant
Image caption Kevin Horne, former chief executive of NWES, resigned from the agency last April with Mr Balch

Mr Balch said: "At this stage NWES had not received any guidance from (the council) on what would and would not be allowed as expenditure against grant/loan drawdown.

"Unfortunately, this is a normal position with projects involving public bodies and forms a part of an ongoing dialogue in major projects of this sort."

A financial activity sheet records Mr Horne, who was chief executive of NWES before stepping down in April 2018, had listed costs of about £700 per day totalling approximately £17,000. These were also rejected.

He said: "All NWES employee time was paid for by NWES from its own funds."

Image caption NWES was the construction partner for the KLIC building in King's Lynn

NWES was loaned £2.75m by the council towards the build costs. A repayment deadline was missed last November and an amount is still outstanding.

The council took possession of the building as a result but its value is still far below the amount owed.

A council audit report into the loan disclosed concerns by officers of a potential conflict of interest in NWES' decision to use Mr Balch's company Nautilus Associates to project-manage the KLIC construction.

The latest documents obtained by the BBC and Eastern Daily Press reveal Nautilus invoices totalling more than £200,000 in relation to the project.

Mr Horne and Mr Balch said: "No potential conflict of interest was ever raised at any juncture (as there was none)… it appears that the unattributed (and unsubstantiated) comment in the council internal report was intended to deflect attention away from any potential internal failings at the council.

"Meetings were held at least monthly across a two-year build period and at no stage was the matter of a potential conflict raised or discussed."

In a statement, King's Lynn and West Norfolk Borough Council said: "We released loan monies to NWES on receipt of their invoices. As with all invoices we receive, we check that they are accurate and challenge anything that is not correct."

A spokesman for NWES said its current management was working with the council "to address historic concerns" but its priority was nurturing new businesses at the centre.

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