A STORMONT funding scheme which supported a social enterprise linked to the sale of paramilitary flags was set up following an approach to a DUP minister.
Nelson McCausland was social development minister when he launched the 'Social Enterprise Pilot Project', which awarded more than £400,000 to the Resurgam Trust.
The funds were to employ four staff to create and provide support for several new social enterprises.
One of the social enterprises supported was Laganside Business Services (LBS), which has been linked to the Lisburn Flag Shop – a pop-up business that sold loyalist paramilitary flags.
Resurgam strongly denies that LBS is involved in selling flags, and said any connection is "purely a historical link" to an old name and former operations.
The Social Enterprise Pilot Project was devised by the Department for Social Development (DSD) some months after Mr McCausland met with Resurgam.
According to the 'Strategic Outline Case' for the project, seen by The Irish News, the minister's approval to examine the idea "followed representations" by Resurgam "to seek funding from the department".
It said the minister met with Resurgam in June 2011 and his "impression was that the Resurgam model could be explored further by the department and asked officials to consider mechanisms for support".
"The Strategic Outline Case follows up on the ministerial direction," it added.
The document warned that the department "may be open to criticism that one or two organisation[s] are singled out for special attention".
However, it said there was scope to test work through pilot projects and the proposal "fits with wider government agendas such as the PfG [Programme for Government] and SIF [Social Investment Fund]".
The pilot project was later advertised and Resurgam made an application for funding.
Resurgam, a registered charity, was awarded £414,695.38 through the project for the period from July 2012 to March 2015.
This was later extended for another year. Stormont funding has continued since then, amounting to £461,615 for 'social innovation' between 2012-13 and 2017-18.
Mr McCausland attended Resurgam to launch the pilot project in 2012, saying it would "deliver real change".
"New businesses will be created, job opportunities provided and I would wish to see other communities benefit from the best practice being established through the Resurgam Trust model," he said.
A Stormont evaluation of the pilot scheme, which also involved Invest NI support, concluded that "all of the objectives and targets.. have largely been achieved or exceeded".
It said the scheme "offered value for money", describing a 20 per cent employment growth within the social enterprise activities.
Against a target of four, it said 10 business plans were developed for social enterprise ideas including LBS.
The Department for Social Development (DSD) was subsumed into the new Department for Communities (DfC) as part of Stormont reforms in 2016.
Mr McCausland was DSD minister until 2014. He lost is North Belfast MLA seat in 2017.
He is a DUP appointee to the Commission on Flags, Identity, Culture and Tradition (FICT) – a body set up in 2016 to address flags and bonfire issues.
DfC confirmed Resurgam is still in receipt of funding for "innovation and enterprise work", amounting to £26,713.45 in 2019-20.
"Laganside Business Services (a social enterprise company) is a member of the Resurgam Community Development Trust. It is not in receipt of DfC funding," a spokesman added.
He said the department has "sought formal assurance" that Laganside Business Services has no association with the Lisburn Flag Shop and this will be "kept under review".
DfC added that the use of the term 'ministerial direction' in the Strategic Outline Case "did not mean that the department required a formal direction from the minister to proceed", but instead "simply refers to the minister's request that officials explore further the Resurgam model and consider options/mechanisms for support".
The DUP did not respond to requests for a comment.
