Crisis-hit tourism agency Welcome to Yorkshire would have “run out of cash” last month – leaving staff unpaid – without a £500,000 loan from the taxpayer, leaked papers detailing the full extent of the organisation’s perilous financial state have revealed.
Documents provided to The Yorkshire Post also reveal that WTY, which has been struggling to deal with the fallout from the departure of ex-chief executive Sir Gary Verity in March in the midst of an expenses scandal and bullying allegations, has been hit by the loss of a £300,000 sponsorship deal with Yorkshire Bank following the latter’s merger with Virgin Money.
It comes as it was confirmed WtY is being axed from running a £2m advertising campaign for the North York Moors after failing to provide reassurances about its financial stability, while the agency has announced it will not be participating in next year’s Chelsea Flower Show after going £170,000 over budget this year.
Last week, Welcome to Yorkshire, which is privately run but receives millions in public sector funding, published partially-redacted versions of two previously-confidential reports into its financial position which revealed it had spent almost £500,000 on the fallout to Sir Gary’s departure - including on ordering independent investigations into the allegations against him.
The publication decision was taken as part of a commitment to greater transparency after council leaders in West and North Yorkshire agreed to provide up to £1m extra funding to WtY through a business rates pool in the coming months. The funding was given on the condition interim chairman Keith Stewart was ousted and replaced by Wakefield Council leader Peter Box.
Coun Box said at the time there had been a “spend now, worry about it later” culture at WtY which had pushed the organisation to brink of financial collapse.
But fully-unredacted versions of both reports – one written by Mr Stewart to council leaders and the other jointly done by a Local Government Association representative and an independent financial adviser – have now been leaked to The Yorkshire Post and reveal more details about the company’s precarious financial position and reliance on taxpayer-funded support to survive.
Mr Stewart’s report to council leaders on the business rates pool, written prior to WTY taking out a £500,000 loan from North Yorkshire County Council on September 24, said: “With no £500k NYCC loan and no BRP [business rates pool] funding WTY would run out of cash in September. It would mean some of the staff would not be paid.”
The agency subsequently took out the loan in late September, on the basis of an agreement put in place in June 2015 and secured against a WTY property in York.
The business rates pool of council leaders agreed on October 7 to provide WTY with an extra £1m in funding, handed out in three tranches of £333,000 in October, December and February.
Mr Stewart’s report prior to that decision said: “If the BRP only releases £333k in September, WTY would run out of cash in October without the NYCC loan.”
A spokeswoman for WTY said today: “Since the BRP funding was agreed and the loan facility drawn WTY will not go overdrawn. The loan repayment is budgeted for.”
WTY does not have an overdraft facility with its bank and when asked what the outcome would be for the company in a hypothetical scenario where it did go overdrawn, the spokeswoman said: “We’re focused on ensuring WTY is a strong, open and transparent organisation that continues to promote the Yorkshire brand across the world.”
Buy Saturday's Yorkshire Post to read our in-depth exclusive investigation into the state of Welcome to Yorkshire's finances