Business support agency worker dismissed over investigation into alleged fraud

Manchester Business Growth Hub has sacked a member of staff over allegations of fraud.

The Sunday Times reports that the Greater Manchester body set up to support SMEs through European Regional Development Fund (ERDF) investments was alerted to the case by one of its clients.

Steve Phythian, 62, from Salford, designed a bicycle saddle for overweight riders and approached the hub’s owner, the Growth Company in a bid to get the NHS to take up his idea.

He said the hub promised to help, but no meetings with the NHS transpired,.

Then, in March 2016, he received a letter saying he had received the equivalent of £1,350 in support.

He contacted the hub and was told paperwork had been falsified to claim ERDF cash for the work supposed to have been done on behalf of his company, Mister Winkle Fully Adjustable Bicycle Bench Seats.

Under current rules the hub can claim up to €200,000 (£168,000) in state aid for an SME over a three-year period.

The Sunday Times reports that, this weekend, the hub admitted it had sacked an employee who had falsified evidence of work for six start-up businesses to claim ERDF cash.

The hub said: “This was an isolated case related to one adviser, after which we strengthened our procedures.”

In the 2015 accounts of the hub’s owner, the Growth Company, figures show that it made a £325,000 provision for “financial irregularities”. Another provision of £136,000 was made in the following year’s accounts.

Greater Manchester Police told The Times that it had investigated, but dropped the case because of lack of support from the ERDF: “As such, officers deemed that pursuing this investigation was not a proportionate and justifiable use of limited police resources.”

The hub said it had “fully co-operated” with the police.

Mark Hughes, Growth Company chief executive, said: “This was an isolated case related to one business advisor that we dealt with under our customer complaints procedure following a verbal complaint from a client on 22 March 2016.

“Following a full investigation and internal disciplinary process an advisor was dismissed from the organisation in August 2016 after it was found that signatures had been falsified.

“We have subsequently strengthened our procedures to prevent this from happening again, including increased customer satisfaction surveying, independent of our advisors, enhanced due diligence checks, as well as spot checks which are carried out on client records as part of internal auditing.”

He added: “Over the last four years we have also given the client a significant amount of time and advice to support his business idea.”