Lancashire Police and Blackpool Council have together paid more than a quarter of a million pounds to keep a failing company afloat.
Blackpool-based Jobs Friends and Houses (JFH) - launched by Lancashire Police in a blaze of publicity in 2014 - was given the public money to assist with cash flow and to pay off debts.
The Gazette revealed last month how Blackpool Council and Lancashire Police had stepped in to rescue the firm, which employed ex-offenders to renovate buildings, in a boardroom takeover.
Lancashire Police has now revealed, following a request under the Freedom of Information Act, it paid £200,000 ‘to assist the company to manage cash flow and to ensure that a number of debts, many of which were to small local traders in Blackpool, were honoured.”
The force claims JFH had got into difficult having ‘grown faster than anticipated.’
Lancashire Police is not the only public organisation to have bailed out JFH.
Blackpool Council today admitted it has made a loan of £100,000 to the company, which since being founded has received more than £1m in public funding.
Both organisations insist the bail out, totalling £300,000, is good value for money, saying JFH has saved the public purse £800,000 by reducing re-offending.
But others have questioned the handout, raising concerns that other companies carrying out similar work are not given the same levels of support.
In response to The Gazette’s Freedom of Information request, Lancashire Police revealed a total of £330,615 had been paid to Jobs Friends and Houses.
Of that £130,615 was grant-funding from third parties and payment for services.
However, last year a payment of £200,000 was made ‘to assist the company to manage cash flow and to ensure that a number of debts, many of which were with small local traders in Blackpool were honoured.’
It was made clear in the response the cash had ‘ensured the continuing viability of the company.’
Lancashire Police insists Jobs, Friends and Houses has contributed significantly to reducing re-offending, attributing the company’s money troubles to a rapid expansion.
A spokesman said: “The issues were largely caused by the company expanding quicker than anticipated which caused short term cash flow challenges.
“Decisive steps have been taken by the Constabulary and the council to ensure that the positive outcomes achieved continue to be delivered.”
The force insisted the £800,000 saving attributed to the company was based on sound academic research.
A spokesman said: “An evaluation done by Professor David Best, a leading academic from Sheffield Hallam University, identified savings in tax payments made by ex-offenders, costs related to crime-related activity, benefit payments, reduced health care costs and savings to the prison system.”
JFH created 20 permanent roles for offenders in its first 18 months of operations.
The firm is now being run under a joint board of directors from the Constabulary and Blackpool Council.
Among the board members is Neil Jack, chief executive of Blackpool Council.
He today insisted the council’s loan was justified.
He said: “With help from the council and the police, the company has shown it can have a positive effect in the local community.
“The Police have been forward thinking in establishing the approach to effective crime reduction and health and treatment costs and the evidence presented was convincing enough for the council to offer the company a business loan to continue its work”
Coun Tony Williams, leader of the Conservatives on Blackpool Council, remains less than convinced and questioned the £800,000 savings claim
He said: “I have no doubt about the good work done by organisations such as this.
“But we cannot keep on giving out unsecured loans like this.
“This is £100,000 from the Business Support Fund to a company with very few if any assets and which is now being provided with accommodation by Blackpool Coastal Housing.
“It is clearly an organisation which has been very badly run.
“Why have they singled out this company?
“There are many others in the area which are doing very similar work and struggling.”
Last year Blackpool Council and Lancashire Police stepped in to take over JFH.
The lettings arm of the firm was shut down, with tenants transferred to other landlords.
The company’s Church Street offices were closed with operations transferred to the headquarters of Blackpool Coastal Housing.
Other board members at JFH are Blackpool’s director of public health Arif Rajpura, Mark Towers, who is director of governance and partnerships for Blackpool Council, Chief Superintendent Stuart Noble, the man in charge of policing for Lancashire Police’s Western Division, and Ian Cosh, who is director of resources for Lancashire Police.