The company taken on to help manage aspects of the controversial Enterprise Development Scheme is to have its contract cut short.

Liverpool-based investment company SPARK Impact was awarded an exclusive five-year contract in April 2016 to act as fund manager of the loan and equity elements of the scheme.

But a review was ordered within the Department for Enterprise after the take-up of investment from the government’s £50m fund had not been as great as expected.

Business News reported earlier this year that just £3m of the fund had been invested instead of the allocated £10m a year. And only a handful of jobs had been created as a result.

Now following the review SPARK’s contract is being terminated less than three years into the deal.

The DfE confirmed that as part of the review of the department’s enterprise support schemes ’a mutual decision has been made to an early termination of the contract with the current fund managers of the Enterprise Development Scheme (EDS), SPARK Impact.’

Laurence Skelly MHK, Minister for Enterprise, said: ’The EDS was created to further support the development of starting, growing and relocating businesses in the Isle of Man against a backdrop of unemployment and financing issues faced by companies.

’Since then our economy has changed and we have committed in the Programme for Government to a full review of all the department’s support schemes which will be completed by October 2018.

’As part of this we have been working with SPARK Impact to review the EDS and consider the future shape of the scheme.

’While the scheme has been successful in some areas, it has not met the full expectations of either party and in the three years since conception the island’s economy has evolved to a different, stronger position.

’Our economy has grown by 7.4% in real terms during 2016/17, unemployment has halved since 2016 and we have a more proactive entrepreneurial ecosystem in place.

’Consequently we have now both agreed to an early termination of the current contract with effect from January 18, 2019. SPARK will continue operating the scheme until then. Between now and January the department will work together with Treasury, the department’s new executive agencies and industry on a range of options including the possibility of a non-exclusive scheme where the department can, with the right advice and support, invest in local businesses and create additional opportunities to foster economic growth.

’I would like to thank SPARK Impact for their help in establishing and delivering the scheme, the investments they have secured and the way they have raised the profile of the Isle of Man, showing we are open for business.’

Mark Borzomato, investment director at SPARK Impact, said: ’We have enjoyed working in the Isle of Man and have met with over 200 great companies over the past two and a half years.

’We have appreciated the support from the department and wish the businesses supported by the scheme the very best success for the future.

’Despite the successes, we agreed with the department that the EDS should be reviewed. We have been pleased to assist the Department for Enterprise both with our experience of similar funds and our experience of the last two and a half years to further tailor the scheme to the Isle of Man’s specific needs.’

The EDS is undergoing changes as part of the full review of the department’s 11 enterprise support schemes. The department retains a wide range of powers for financial support, including grants, loans, and equity structures linked to economic growth and will continue to be open directly to approaches from businesses both on and off-island looking for assistance to start, grow and establish in the Isle of Man.

Any proposed changes in the Enterprise Development Scheme itself will be presented to and require Tynwald approval.

Last month in Business News SPARK Impact investment manager Christine Walters defended the scheme and said deals had been ’concluded across a number of sectors, including healthcare, eCommerce and technology.’