“When you are faced with a situation like this, you look into your own heart and question yourself as to whether you are doing the right thing,” says Keith Stewart, the interim chairman of Welcome to Yorkshire as he reflects on whether he and other board members could have done more to prevent the twin scandals that have engulfed the organisation since the resignation of the tourism agency’s chief executive and figurehead Sir Gary Verity in March. “I’m very driven by that. I absolutely know that if I had been aware earlier of things going wrong I would have made a move to help the organisation deal with it, as indeed I did at the time when I did find out.”
Stewart is far from the only person associated with the tourism agency to have been soul-searching in recent months after Sir Gary’s departure on health grounds in March amid allegations about his expense claims and allegations of bullying. But as a board member since 2014 and the recently-appointed interim chair of the organisation following chairman Ron McMillan’s resignation in April, he has had more reason than most to reflect.
As he sits in a conference room in the Doubletree by Hilton hotel in Leeds hours after parallel reports into expenses issues at Welcome to Yorkshire and its management culture were published on Wednesday, Stewart has the unenviable task at what went so wrong at the organisation – which is a private company but receives millions in public sector funding.
“I don’t think there was the right level of oversight and that is what we are determined to put right now,” he says.
Forensic accountants BDO found they were unable to assess whether almost £900,000 of expenses claimed in six years by senior managers including Sir Gary and the board were justifiable because a lack of assessment the business value of such spending.
But it did identify £26,000 worth of expenses that were deemed to be chiefly for ‘personal’ rather than business benefit – all but £200 of it said to relate to Sir Gary’s spending and subsequently paid back. While the report did not specify the precise nature of the ‘personal’ spending, it did highlight the increasing use of luxury hotels and high-end restaurants for networking – and a lack of any entertainment policy or business justification system to assess whether the costs being racked up were worthwhile.
Three company credit cards with a spending limit of £8,000 - one of which was held by Sir Gary - were paid each month in full by Welcome to Yorkshire by direct debit. Investigators found “an increasing number of missing receipts, specifically for credit card expense claims”, with a “large proportion of credit card transactions in the latter period of our review not being accompanied by receipts”.
The report also identified a purchase invoice of £6,600 which “did not reflect the service that was provided to WTY” and was subsequently repaid. Stewart says the money was repaid by Sir Gary but he could not disclose further details as the matter has been passed to West Yorkshire Police, along with the BDO report and more details of the specific expenses that had been claimed.
Sir Gary has said while “some errors had been made”, all expenses went through the “proper processes” and were signed off by the chairman and the agency’s audit committee.
Meanwhile, a separate report conducted by solicitors Clarion into the company’s management culture was also published. It has followed former staff coming forward to the media to describe their “mental torture” and allege that Sir Gary would “shout, scream, swear and throw things sometimes at people”. Previous allegations about Sir Gary’s behaviour had been raised in 2014 and 2016 which resulted in him being given a final written warning and being required to attend behavioural management counselling.
The Clarion report did not go into specifics but found Sir Gary’s behaviour had “fallen short” of the expected standards of a chief executive. For his part, Sir Gary has described – via a spokesman – that some of the allegations against him as “wildly wide of the mark”, but admitted that “his passion to succeed may on occasion not have been in-step with present day cultural norms”.
The BDO report also highlighted how the board had been split, with an inner circle of board members holding “closed sessions” that others weren’t aware of to discuss some issues and other members left “unaware of excessive spending in relation to expenses”.
When asked by The Yorkshire Post whether he was part of the inner or outer circle of board members, Stewart says: “I was certainly unaware of a number of these things and the first time I became aware was when the chairman asked me to get involved in an investigation in March, which I did and that is really the start of my involvement.”
He adds: “I regret what has happened, again apologise on the part of the board, particularly to our fantastic team at Welcome to Yorkshire. They have gone through an extremely difficult time that wasn’t of their making. We are determined that going forward the organisation will be properly run with a proper level of care for its team.”
But despite his hopes for the future, with the police confirming they are currently considering the findings of the BDO report, restoring trust from both the local companies and councils which fund Welcome to Yorkshire and the wider public will prove no easy task – particularly given disappointment in some quarters about the amount of detail contained within the published reports.
Susan Briggs, director of The Tourism Network in Masham, says the reports were a “damp squib”.
“They both feel incomplete and the situation seems unresolved,” says Briggs, who has repeatedly criticised the agency’s handling of recent events. “I have spoken to several people who did give evidence to the Clarion investigation and say they feel dismissed. These people went through a lot. After speaking out, they felt rather dismissed by the lack of detail in the report. Also, after 30 years of working with destination marketing organisations, spending £900,000 on expenses is not normal or proportionate or reasonable.”
She says there is “still a long way to go” to restore trust. “We need to see tangible action. There is a feeling a new CEO needs to be appointed sooner rather than later. We are at the stage now where the organisation is not trusted and there are still many question marks. The next step needs to be a good, strong, external chief executive officer, a lot of industry consultations and relationship building and the local authorities need to ask more questions and have a concrete plan not just for governance but also for what actions will be undertaken for their funding so it is more of a contract.”
The reaction from councils has been somewhat more positive – albeit with a warning that such failures won’t be allowed again.
Last month, the West and North Yorkshire business rates joint committee agreed to continue funding Welcome to Yorkshire to the tune of £1m a year after receiving “reassurances” about forthcoming governance changes.
A joint statement by the leaders of Bradford, Calderdale, Kirklees, Leeds and Wakefield councils, said: “Welcome to Yorkshire has done a huge amount to champion Yorkshire, helping to bring in £9bn in tourism. They have raised the profile of the region and have achieved much to be proud of but it is imperative that if we continue to invest public money we must have total confidence in their governance.
“These reports confirm a failure in the standards of leadership of Welcome to Yorkshire that cannot be allowed to happen again. While we are pleased many of the recommendations resulting from these investigations have already been introduced, these must continue to be implemented in full in order to rebuild public confidence.
“This is the essential foundation for forging a new relationship in the future built on transparency, trust and the high standards we all expect to reflect our Yorkshire values.”
But others are yet to be convinced. Sheffield Council, which paid £50,000 a year to Welcome to Yorkshire, suspended its payments shortly after Sir Gary’s resignation and are yet to decide whether to restart them.
Councillor Olivia Blake, Deputy Leader and Cabinet Member for Finance at Sheffield City Council, said: “The report into Welcome to Yorkshire raises a lot of serious issues, which we will consider in full alongside Welcome to Yorkshire’s response. We welcome the recommendations that have been outlined and plan to review our position once these proposals have been implemented.”
Changes implemented in wake of scandals
Welcome to Yorkshire have taken a series of measures designed to prevent future failings.
Two of the three company credit cards have been cancelled, with the remaining governed by stricter new spending guidelines, while an entertainment policy governing appropriate spending levels is to be introduced. A ‘missing receipt declaration’ form is to be brought in as part of the expenses process, while employees will have to provide a business justification for everything they claim.
Board expenses over £250 will be published on the company’s website.
New board members are to be recruited, a head of HR is being employed and the company’s whistleblowing policy is being reviewed.