Business chief delivers parting shot and blames his staff over £1.1m crisis

RON Hewitt, the outgoing chief executive of the beleaguered Edinburgh Chamber of Commerce (ECC), has said he “deeply regrets” the “inadequate” controls within the organisation which led to a £1.1 million loss for the year and which has prompted a police investigation into “unacceptable work practices” of former staff.

Mr Hewitt, who handed in his resignation this summer as a result of the problems, said the crisis had “taken the shine off” his six-year reign which in better times saw the group being lauded as chamber of the year in 2010.

The ECC is recruiting a chief executive to replace Mr Hewitt, who will leave at the end of the year.

As a result of problems and losses at the business organisation’s main trading arm, Edinburgh Business Developments (EBD), the chamber also had to restate its accounts for 2010 to the tune of £400,000, which means the group has been in the red for two years in a row.

In a low-key annual meeting held at the City Chambers yesterday, Mr Hewitt confirmed that the chamber’s board had debated whether to fund a £700,000 bail-out for the troubled business unit, which runs support programmes such as Business Gateway and Smart Exporter, or “let it go”.

He placed the blame for the firm’s troubles firmly on a “small number of EBD staff who brought about this financial crisis”.

It is thought that his comments relate to the former managing director of EBD, Alasdair Kerr, who Mr Hewitt said had resigned only weeks before the chamber discovered the extent of the losses the firm was making.

Mr Hewitt insisted that the problems at the chamber have been resolved. However, Jeremy Chittleburgh, the chamber’s treasurer, said that EBD’s future depends on its ability to bring in its bills in a timely manner.

He said: “It is essential for EBD that the forecast revenue expected over the remainder of the financial year comes in on time.

Both Mr Hewitt and Robert Carr, the president of the Edinburgh chamber, had both held positions on the troubled EBD’s board in the run-up to the crisis. But Mr Hewitt admitted that “neither the chamber nor EBD’s boards was aware of the extent of EBD’s financial difficulties” until it was too late.

Mr Carr, who is chairman of law firm Anderson Strathern, yesterday assured attendees at the meeting that the group’s reporting structures had been amended.

“Members can be reassured that practices and processes are now in place to address the risk of this ever happening in the future,” he said.

Despite the chamber’s well-publicised problems, its management was surprised by how few of the 90 members who attended the meeting grilled the board on its presentation.

Graham Birse, the firm’s deputy chief executive, admitted there was “an element of surprise and, to some extent, relief” among the chamber’s board that they seemed to have got off lightly.

“We had prepared ourselves thoroughly for all of the questions that could possibly arise from this scenario,” said Mr Birse, adding: “We are very conscious those questions are out there.”

The chamber’s accounts to the year ended 31 March showed the amount of income due to it had to be adjusted from £1.2m last year to £400,000.

But the treasurer said that the chamber’s current assets of £117,659 were enough to “settle its liabilities”, although he added that the group’s general funds have decreased from £1.4m last year to some £300,000.