Has NDC lost the plot?

NDC: A brief history

The Neighbourhood Development Company (NDC) is the Nottingham partnership receiving money from the government's New Deal for Communities programme. NDC has been allocated £55m over 10 years (most of it already spent) to regenerate the Radford area. It is one of 39 such partnerships in the UK which have had approximately £2bn of public money committed to them.

According to the Neighbourhood Renewal Unit (NRU) website, the aim of partnerships is "reviving deprived areas by putting communities in charge of the regeneration of their neighbourhoods." The focus, say NRU, is on "Long-term commitment to deliver real change. Communities [are] at the heart of this". NDC mention several key areas they say they focus on in delivering this change: Business and Employability, Education and Learning, Housing and Environment, Health, Community Safety and Arts, Sport, Leisure and Culture.

This is the official line, anyway. In 2002, only 2 years since the start of Nottingham NDC, the Guardian was already reporting that the scheme had "been dogged by community infighting, delays and resentment over government interference in the scheme." In April of that year there was a record low turnout in an election for Nottingham New Deal (7%), indicating a lack of community interest in the decisions the partnership was making. This was followed by the controversial decision to run a later election along racial lines. People could only vote for candidates that were of the same ethnic group as themselves. In 2003, the Vice-Chair of NDC resigned complaining of the "bumbling incompetence" of her colleagues. Chief Executive, Pauline Davies, also stepped down and the following year NDC were rated as 'poor' by the Government for the East Midlands (GOEM).

Under the new Chief Executive, Sam Tarff, NDC managed to raise its rating to 'excellent' over the next four years. However, 2007 was also to be the year that a huge amount went wrong within the organisation. The Independent Review of Corporate Governance released in 2008 catalogued a host of problems including infighting amongst Board members, financial impropriety and personal power struggles that were tearing NDC apart.

The report detailed how, over the period of Sep 2007-Jul 2008 breaches of the Code of Conduct led to one Director being removed from the Board, the Independent Chair being asked to go on 'gardening leave', Sam Tarff being suspended as Chief Exec pending investigation by the partnership, the two public agency directors resigning and the Treasurer becoming bankrupt. Feuding between Sam Tarff and Narinder Sharma, the Independent Chair, were at the root of the power struggles within the organisation. Finally, in the summer of this year, when faced with intervention by the government and the withdrawal of funding, the entire Board stood down. Sam Tarff was later cleared of gross misconduct but did not return to his post.

The Independent Review described the atmosphere at NDC in July 2008 was one of "distrust and entrenched positions, aggravated by insufficient transparency and a lack of shared aims. "Accusations about conspiracies, personal power struggles, financial motivation and manipulation are common currency, some of it difficult to verify. In addition there has been differing legal advice about whether the Company is acting beyond its legal powers. "The Company coalesced into factions supporting different individuals. At present working relationships are very fragile and present a real risk to delivery performance. Some of the working relationships key to delivering the excellent performance seem to have been irrevocably damaged... The public funders are having to review the continuation of funding and their own general involvement."

Many of the problems seemed to revolve around the finances of the Company, and improper use of funds. The Independent Review reported "a number of cases of separate and substantial financial dealings between Directors, and Directors and staff. None of these were declared at the time and until later complaints emerged, the Company had no formal knowledge of them." Regarding financial controls "it appears evident that the Board did not have adequate arrangements. The Finance Committee did not meet at all in 2007; the Treasurer was seeking personal loans from staff and fellow directors; decisions were being taken without a clear understanding of financial consequences; at least some Directors were not declaring their conflicting financial interests... [D]ay to day financial controls sometimes seemed absent. One particular example of that is the extensive spend on legal fees, despite the Management & Administration budget being exhausted."

The result of the breakdown in relationships between Board members and the lack of financial control had resulted in a company that was out of control and had lost sight of the community that was meant to be its reason for being. The review concluded that "[i]t is difficult to imagine public funding continuing without immediate and substantial changes taking place, and an unambiguous undertaking to carry out further changes over the coming months. The public funders will then need to consider whether they can be sufficiently reassured by the implementation of these changes. The Company will have to be mindful of the implications for the local community as well as for staff and Directors themselves."

A new Board was elected in September to oversee the spending of the final £12m of the funds. However, it seems the problems did not end there. The interim Chief Executive, Stephen Lord, left NDC before his replacement had been found, and a source close to NDC was quoted as saying his departure was "abrupt." According to the source, those running NDC had no "collectively clear understanding about where the organisation is going".