The fallout from the expenses scandal which consumed Welcome to Yorkshire following the resignation of chief executive Sir Gary Verity has cost the troubled tourist agency almost £500,000, it has been revealed tonight.
Details have been published by the privately-run company, which receives millions of pounds in funding from the public sector, at the direction of its new chairman, Wakefield Council leader Peter Box.
Coun Box criticised the previous regime, saying the agency could no longer be run on a ‘cult of personality’ and revealing the organisation has come close to financial collapse in recent months.
It has been revealed that £482,500 has been spent in connection to the costs of two independent inquiries ordered in the wake of Sir Gary's resignation in March on health grounds following bullying and expenses allegations, with the figure also taking account of “termination” expenses.
Newly-published figures said £151,000 had been spent on “payments in lieu of notice, including National Insurance and pension”. Welcome to Yorkshire said it was unable to confirm whether that money related to Sir Gary.
The Yorkshire Post has contacted a representative of Sir Gary for comment.
The figures also showed that the two independent investigations ordered in the wake of Sir Gary’s departure had cost the organisation £168,000, while £42,000 had been spent on legal costs, as well £49,000 to date on the ongoing efforts to recruit a new chief executive.
More than £70,000 has been spent on other related areas such as communications, accounting advice and consulting on a new tourism strategy.
The inquiries reported in July that Sir Gary’s behaviour towards staff had “fallen short” of expected standards, while it was found he had claimed around £26,000 in “personal” expenses “not incurred wholly for the benefit of Welcome to Yorkshire”.
Investigators were unable to determine whether a further £900,000 of expense claims by Sir Gary and other senior officials had been “reasonable” because of a lack of clear spending policies at the organisation.
Further details of Welcome to Yorkshire’s ongoing financial problems have also been revealed as two previously-classified reports were made public - with Coun Box saying a “spend now, worry about it later” culture had pushed the organisation to the brink of financial collapse.
Coun Box said that governance and strategic oversight at the tourism agency had been “largely absent”.
A previously-classified report written by a Local Government Association adviser and an independent financial specialist for local council leaders in August has now been made public and reveals that WTY, which does not have an overdraft facility, had been on course “to run out of cash by November at the latest” unless it received over £1.5m in additional public funds - listing three expected sources of funding which were “essential” to ensuring the business remained a going concern.
Since then, two of those three sources of funding - a £500,000 loan from North Yorkshire County Council and a £1m cash injection from a business rates pool overseen by councils in North and West Yorkshire - have been approved.
But the third source, an unspecified amount of money from the North Yorkshire Moors National Park, is yet to be paid. That money is understood to relate to Section 106 funding dependent on plans to create a giant fertiliser mine in North Yorkshire - proposals which themselves have come into question in recent months.
A second newly-published report by the now ousted WTY interim chairman Keith Stewart said those at NYMNP was unwilling to release the funds “until they are satisfied Welcome to Yorkshire is in a financially-stable position”.
His report also revealed that Welcome to Yorkshire had spent £250,000 on its show garden at the Chelsea Flower Show this year - more than triple the £80,000 budget.
Mr Stewart’s report to council leaders said a “managed closedown” of Welcome to Yorkshire would have resulted in 48 redundancies, cost more than £3m and done “severe reputational damage” to the region, while a replacement organisation would have been required.
Coun Box said: “It’s clear to me, from reading both reports that governance and strategic oversight of the operations of WTY have been largely absent. Financial planning was not robust enough which led to a culture of spend now, worry about it later.
“These reports provided leaders across the region with the evidence that led to the decision to invest £1 million of public money dependent upon certain conditions being met.
“Political leaders across the region are clear that continued investment of public funds is dependent on significant change in accountability, transparency and governance of public resources.
“The options before us were stark, including the managed closure of WTY. That would have been bad for the region and, obviously bad for the hard-working frontline staff who I have the greatest admiration for. This region needs a dynamic, creative and accountable strategic destination marketing organisation, but it must be one that upholds the same values and governance enshrined in the principles of spending public funds.
“You cannot run any organisation – public or private – based on the ‘cult of personality’. Stronger governance, financial planning and a long term, strategic plan are my priorities, along with the recruitment of new board members and a chief executive.
“Since taking up my role, I’ve been heartened by the messages of support, including from people who are interested in joining the board.
“I believe we can succeed in rejuvenating Welcome to Yorkshire and capitalise on our greatest assets: the people of Yorkshire, our stunning countryside and coastlines, our towns, cities, dales and valleys.
“A vibrant county as diversely rich and creative as ours deserves an organisation that holds the confidence and trust of its Board, staff, customers and stakeholders close to its heart.”