Chamber looks to new era after settling debt

The Mid-Yorkshire Chamber of Commerce, which was once the biggest in the country, was brought to the brink of liquidation after a tax error, losing contracts and running up a deficit in a scheme to help families with childcare costs.

Last year, the chamber was the subject of a Company Voluntary Arrangement (CVA), a legal mechanism which can be used as an alternative to liquidation by any company that owes money which it cannot repay in full on time.

The voluntary arrangement has now ended, after court-appointed joint supervisors filed a Certificate of Completion.

When the CVA was agreed in January 2010, creditors allowed the chamber two years to pay back 78p in the pound.

A year later, the chamber has exceeded the original offer by paying back the full debt to creditors, with an extra 22p paid on top of the amount approved.

Including legal and other costs, the chamber has paid out 351,475 under the CVA. At its peak, around a decade ago, it was the largest chamber in the country, with 8m turnover and 400 staff. Today it has 12 staff.

A document seen by the Yorkshire Post revealed that, in 2006, the chamber was ordered to pay a large amount of additional tax following a full VAT investigation. In 2006, it also lost the right to bid for some Government training contracts after failing an inspection.

The document said that the chamber had "found it extremely difficult, if not impossible" to budget for the cost of its activities after expanding.

Andrew Choi, the executive director of the chamber, which has offices in Halifax, Huddersfield and Wakefield, said the chamber now wanted to focus on improving its services to members.

Mr Choi, who joined the chamber's board last year, said: "The key to making an improved offer to creditors was the sale of a building in Wakefield.

"We sold it for 210,000, in excess of the estimated 180,000, and much quicker than we estimated when we put the CVA package together."

Mr Choi said the chamber had also pursued "aged debt".

He added: "We were knocking on doors and trying to ensure that we recovered all that was due to us.

"We had a very clear strategy to focus on the activities that are essential to being a great chamber of commerce.

"Where possible we looked to sell businesses to ensure that people kept their jobs and customers had continuity. There were some unfortunate aspects of what was a very difficult time.

"At the time we went into the CVA, we had a headcount of just over 50. That was taken down, through closures and sales of businesses, particularly in nursery activities, to around about 15 people.

"This time last year, all the chamber staff went through a process of being at risk of redundancy and having to apply for new jobs within a slightly leaner structure. We've got our headcount down to 12 people. We have sensible aspirations for how we build our capacity.

"The chamber had phenomenal growth through the late 1980s and 1990s, primarily (through) training programmes for the unemployed to try and get people back into work.

"We've come out of a lot of those activities to really focus on those things that local businesses are looking for. We've come out of public sector training and a lot of our overseas activities are now gone."

At one point, the chamber even had an office in Colombia with one business representative. The representative has been made redundant.

Mr Choi hopes the chamber's membership numbers can increase from 651 to 1,000 over the next year.

He added: "We're looking at new opportunities to perhaps create a business start-up offering and more services around business growth, which traditionally have been delivered by Business Link.

"It's important to stress that we're not looking at the demise of Business Link as an opportunity to win contracts to do the same (work).

"We believe that the opportunity for chambers is to develop commercial services that fill the gap, rather than to be looking for contracting opportunities on the back of what is clearly a much reduced public sector capacity to provide services."

Loan initiative to help business

Andrew Choi said the Mid-Yorkshire Chamber of Commerce planned to participate in a micro-loan initiative to help small businesses that could be launched in March.

He added: "It's an initiative that brings some European money into play alongside some of our legacy funds. We hope to make 1m worth of funding available to small companies through loans. We have 500,000 that has come from operating loan schemes in the last five or six years.

"As we've made a loan, and that applicant has repaid it, we keep that fund revolving as an evergreen loan fund. We've used the money that's in reserve to match against European money."