Dear One North East,

This request under the FOI Act is made in relation to The Difference Engine (ONE North East Business Case Project Name: The Cloud Foundry, Project Number NE005325)

This FOI request is to be treated separately to, and not aggregated with, any other FOI requests made by me that is current (within the last 20 working days) or remains outstanding and overdue. I believe that the provision of information relating to this request should be readily to hand and therefore within the "appropriate limit".

I would be grateful if you could confirm/clarify the following:

Please confirm the date when the "North East Finance" "Design and Creative Fund" was transferred from North East Finance Ltd (company registration no. 04908607 now called NF Holdings Ltd) to Enterprise Development North East Ltd (a subsidiary company of ONE North East).

Please confirm that the “North East Finance” “brand” continued to be used by Enterprise Development North East Ltd (EDNE) from April 2009 onwards notwithstanding the fact that a legal entity called North East Finance Ltd (company registration no. 06855409) came into existence on the 23rd April 2009.

Please confirm any dates when the "North East Finance" "Design & Creative Fund" was closed, reopened or extended whilst being managed by EDNE.

Please confirm the nature of the contract (e.g. employment, contractor etc.) and contract period for the "North East Finance" "Design & Creative Fund" Fund Manager post(s) from January 1st 2009 through to March 31st 2010. If an employee please provide employer(s) name(s) and contract start and end dates, if a contractor please provide names of parties to the contract and contract start and end dates.

The Difference Engine (DE) was originated from a whitepaper written by JayEyeSea Ltd in February 2009 (http://blog.thedifferenceengine.eu/blog/...). Please confirm that nobody acting in the capacity of a Fund Manager to the "North East Finance" "Design and Creative Fund" have been involved in the development of the ONE North East Business Case Project Name: The Cloud Foundry, Project Number NE00532 (now called DE) with ONE North East, EDNE or the project proposer North East Business Innovation Centre Ltd (BIC). If they have, please state the nature of this involvement (e.g. drafting of the business case and direct involvement in any consultations as recorded in Annex A of the business case).

The ONE North East Business Case Project Name: The Cloud Foundry, Project Number NE00532 profiles Single Programme contributions as £121k in 2009/10 and £215k in 2010. Please confirm amounts allocated and amounts paid (with dates) from the "North East Finance" "Design & Creative Fund" to the DE for 2009/10 and 2010/11 along with other amounts from other Single Programme sources if and where appropriate.

A tender specification for the provision of Project Management services to the BIC for the Cloud Foundry programme was advertised on the 22nd October 2009 with a closing date of the 28th October 2009 (5 working days - see http://twitpic.com/1d9uv6). Please confirm that nobody acting in the capacity of a Fund Manager to the "North East Finance" "Design and Creative Fund", or directly involved in the development of the ONE North East Business Case Project Name: The Cloud Foundry, Project Number NE00532 has been awarded this contract. If they have, please state their actual involvement in relation to the business case (e.g. drafting of the business case and direct involvement in any consultations as recorded in Annex A of the business case) and/or subsequent tender specification. Please confirm the date that this tender contract was awarded and the date that services under this contract commenced.

The ONE North East Business Case Project Name: The Cloud Foundry, Project Number NE00532 states that procurement of services, supplies or goods will be carried out in accordance with thresholds and obligations set out in the Funding Allocation Letter and references the ONE North East Single Programme and European Funding Procurement Handbook (http://www.onenortheast.co.uk/page/erdfe...). Please confirm that the procurement of all services, supplies and goods, including the tender specification for the provision of Project Management services to the BIC, is fully compliant with this handbook (eg sufficient degree of advertising, tender design, conflicts of interests of consultants etc.), if not, please specify any departures from the procurement rules and reasons for these variations.

The application deadline for businesses applying to the DE was 4th January 2010 (see http://blog.thedifferenceengine.eu/blog/...). Please confirm the number of businesses that applied and how many businesses were subsequently selected by a selection committee for cycle 1. Please also confirm the public and private sector organisations (eg Digital City, Sunderland Software City) that were represented on the selection committee, the date(s) when businesses were selected by this committee and the date(s) on which funding contracts with successful companies were completed.

The ONE North East Business Case Project Name: The Cloud Foundry, Project Number NE00532 states "Subject to the first tranche of businesses meeting the investment criteria of the Design and Creative Fund £20k will be invested in each of the 10 teams in the first cycle selected and approved by DCF's investment committee". Please confirm the fund (e.g. "North East Finance" "Design & Creative Fund") and the legal entity that provided the funding to the successful companies. Please confirm the total amount of funding provided. Please confirm the legal entity that provided the independent fund management services (e.g. if contracted from JEREMIE multi-supplier framework (OJEU09/10-002) or other arrangement) in relation to this fund and if none were provided please clarify the independent fund management arrangements that were in place. Please confirm the shareholding and legal entity holding the shareholding (as per http://www.thedifferenceengine.eu/about-...) and clarify if and where different (e.g. if 8% shareholding has not been secured please state why).

Please confirm that the selection committee did not have any precedence over the DCF approval/investment committee and that the DCF approval/investment committee were not obliged to fund companies selected by the selection committee. Please confirm the number of companies selected by the selection committee and the number of companies approved and rejected by the DCF approval/investment committee. Please confirm the date(s) that the DCF approval/investment committee approved funding for companies identified by the selection committee. Please list registered company names of all cycle 1 funded companies. Please confirm whether the section committee and the DCF approval/investment committee are separate, distinct and independent from one another.

Please confirm if the "North East Finance" "Design & Creative Fund" “terms sheets” as used for the "Design & Creative Fund" fund in 2009 (prior and/or post transfer to EDNE) was used for the Difference Engine companies, if not please clarify what “terms sheets” were used and where these were derived from. Please provide a generic (redacted if necessary) copy of the “terms sheets” used for cycle 1 DE companies.

The ONE North East Business Case Project Name: The Cloud Foundry, Project Number NE00532 states in the sign off section "Service Level Agreement to be agreed & signed by all stakeholders" (14/9/09) and "SLA to be agreed prior to launch" (15/10/09). Please clarify why an agreement has yet to be agreed (see http://www.whatdotheyknow.com/request/th... & http://www.whatdotheyknow.com/request/th...) and why the programme was launched without this agreement being in place.

Yours faithfully,

James Burke

Dear Nicola Barnett,

Please clarify if you would like this articulated into "1 request".

Yours sincerely,

James Burke

Dear Jaymes Glew,

Thank you for your responses as set out in Appendix 1 (http://www.scribd.com/doc/32039702/Diffe...) as 23 responses.

I would be grateful if you could clarify and/or provide a response in relation to omissions to the following points:

3) Please clarify what has happened to the balance of £200K allocated in this response and the £180K identified as approved in response 6. Please confirm that the DCF Investment Programme is still operating past March 2010 (as indicated in your responses 6 & 11)

re: 4), 5), 7), 8), 9), 12) & 22) Thank you for confirming that Jon Bradford (as an officer of Jay Eye Sea Ltd) was contracted as a DCF Fund Manager by EDNE Ltd from 1st April 2009 through to 21st March 2010 whilst also being a stakeholder in and who contributed to the development of the Difference Engine business case (based on a whitepaper developed by him and copyrighted to Jay Eye Sea Ltd) and was awarded the Difference Engine Project Management services contract on the 19th November 2009 and signs off the EDNE DCF "terms sheets".

5) Please confirm that all IPR (including copyright) relating to the Difference Engine programme has been transferred to ONE North East / EDNE Ltd from Jay Eye Sea Ltd.

6) As per the original request ("The ONE North East Business Case Project Name: The Cloud Foundry, Project Number NE00532 profiles Single Programme contributions as £121k in 2009/10 and £215k in 2010. Please confirm amounts allocated and amounts paid (with dates) from the "North East Finance" "Design & Creative Fund" to the DE for 2009/10 and 2010/11 along with other amounts from other Single Programme sources if and where appropriate").

Please clarify why the £180K approved in January 2010 is different to the £175K "balance" for the Difference Engine in your reply 15th March 2010.

In your reply to separate FOI request (http://www.whatdotheyknow.com/request/di...) £336k was provided as a response to funding provided to the Difference Engine programme and awarded to BIC. Please confirm Single Programme amounts paid to the BIC in 2009/10 and forecast/profiled for 2010/11.

9) Thank you for confirming that the NE BIC tender process for the provision of Project Management services was carried out in breach of your ONE North East Single Programme and European Funding Procurement Handbook (http://www.onenortheast.co.uk/page/erdfe...)

22) Thank you for the "terms sheets" overview (http://www.scribd.com/doc/32039720/Diffe...), please can you provide full copies of the "terms sheets" documents as described on page 2.

Yours sincerely,

James Burke

Dear Jaymes Glew,

Thank you for the response received via email today (http://www.scribd.com/doc/32649619/Diffe...).

re: 2) As per the original clarification, I would be grateful if you could confirm the status of the IP Rights relating to the "Difference Engine" originated by Jay Eye Sea Ltd (http://blog.thedifferenceengine.eu/blog/...), if this is not known please state unknown.

Yours sincerely,

James Burke

Dear Nicola Barnett,

Thank you very much for this confirmation and closure of this FOI request.

Yours sincerely,

James Burke

Dear Nicola Barnett,

The aim of this note is to provide a summary of the responses to this FOI request.

This FOI request and the responses from One North East have raised a number of issues.

Funding of £336,000 to deliver this project appears to have been awarded by One North East to the North East Business Innovation Centre (BIC) with no tender process.

Since 2008 One North East has also provided funding of £4,501,496 (including an additional £1,799,540 from ERDF) via 3 projects relating to "Sunderland Software City” (SSC) to the BIC with no tender process. Bernie Callaghan is the CEO of the SSC initiative who is the brother of the One North East Chairman Paul Callaghan who was recently appointed by Vince Cable. Further information regarding "Sunderland Software City” is available here: http://www.whatdotheyknow.com/request/su...

Jon Bradford (as a Director of Jay Eye Sea Ltd) was contracted as the Design and Creative (DCF) Fund Manager by EDNE Ltd (a wholly owned subsidiary of One North East) from 1st April 2009 through to 31st March 2010 whilst also being a stakeholder in and who contributed to the development of the Difference Engine business case (based on a whitepaper developed by him and where the copyright is held by Jay Eye Sea Ltd).

Jon Bradford was awarded the Difference Engine Project Management services contract on the 19th November 2009 following a tender process carried out by the BIC for the provision of Project Management services for the Difference Engine programme that appears to have been carried out in breach of the ONE North East Single Programme and European Funding Procurement Handbook guidelines and which appears to be eligible for “clawback” of £134,000 (see http://www.whatdotheyknow.com/request/su...). DCF managed by EDNE Ltd (a wholly owned subsidiary of One North East and whose sole Fund Manager was Jon Bradford) has provided £180,000 to 9 companies that applied to the first cycle of the Difference Engine programme, this funding appears to be separate from the £336,000 provided to deliver the Difference Engine programme. Funding of £20,000 per company was provided by EDNE Ltd (from the DCF) to the 9 companies between March 2010 and May 2010. Jon Bradford signs EDNE DCF "terms sheets" provided to each of the 9 companies on behalf of “The Difference Engine” for EDNE Ltd (http://www.scribd.com/doc/32039720/Diffe...).

Peter Judge, the One North East Head of Legal Services and Procurement, is listed as a signatory on the One North East Business Case for the Difference Engine (previously known as has “The Cloud Foundry” http://www.scribd.com/doc/31191462/NE005...), and was made fully aware, in April 2010, of the apparent procurement irregularities relating to the Difference Engine Programme Manager post, the perceived numerous conflicts of interest relating to Jon Bradford etc. Peter Judge was also involved in the direct handling of various FOI requests and discussions at meetings relating to these issues. It is not clear that these issues have been addressed by One North East. Peter Judge has subsequently issued a Section 14(1) FOI refusal notice regarding FOI requests seeking further clarifications: (http://www.whatdotheyknow.com/request/su...).

An additional £200,000 is required to fund a second cycle (where 10 companies can apply to the Difference Engine and funding of £20,000 will be provided to each successful company). This funding is expected to come from Sunderland City Council and Middlesbrough Council but according to Middlesbrough Council this funding is “currently being reviewed” - http://www.whatdotheyknow.com/request/th....

As a Section 14(1) refusal notice has been issued and upheld following an internal review by One North East (http://www.whatdotheyknow.com/request/su...) it appears that I am unable to seek further clarifications.

Yours sincerely,

James Burke