Revealed: Welcome to Yorkshire owes £2m debt to 67 creditors - including public sector pension fund

Tourism agency Welcome to Yorkshire owed more than £2m to creditors when it collapsed into administration last month - including over £1m to a local government pension fund, The Yorkshire Post can reveal.

A ‘Statement of Affairs’ document published on Companies House has revealed the £2.1m debts to 67 different creditors include £1.3m to North Yorkshire County Council in regard to the North Yorkshire Pension Fund it administers. The company had just over £1m in estimated assets at the time of its collapse.

North Yorkshire Council leader Carl Les sat on the Welcome to Yorkshire board and is co-chair of the Yorkshire Leaders’ Board which decided to withdraw funding from WtY at the start of March - leading to the agency entering administration.

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The decision by council leaders to withdraw public funding in favour of setting up a new destination marketing organisation for the region came about after years of reputational and financial problems for the agency.

Welcome to Yorkshire is going through an administration process

The Pension Fund has around £5bn in assets and its treasurer Gary Fielding said today that the money of everyone who has contributed to the fund is safe. The fund is a statutory scheme for local government employees but also includes a number of other public, education and voluntary sector employees as members.

Administrators said today that creditors “will get something in due course” following the recent sale of company assets such as its brand name, website and social media accounts to e-commerce agency Silicon Dales for an undisclosed sum. But the precise amount that will be returned is yet to be confirmed.

The statement of affairs for Welcome to Yorkshire, which was a private sector successor to the publicly-run Yorkshire Tourist Board, said the agency had operated an ongoing deficit in the pension scheme.

It was recorded by the Pension Fund as standing at £1.394m as of August 2021 but this had been challenged by WtY. However, a formal response to the challenge had not been received by the time the company entered administration. It means administrators have listed the debt, minus payments made since August 2021, as £1.352m.

Mr Fielding said: “Unfortunately when companies go into administration all parties must await the outcome of the creditor’s settlement before having the full picture. While any financial impact is not something we would be complacent about, it is really important to reassure everyone who has contributed to the North Yorkshire Pension Fund that their money is safe and that they will all be paid what they are due.

“The pension fund’s assets are circa £5 billion and the latest assessment confirmed it is in an extremely strong financial position, so contributors can be confident it is robust now and in the future.

“We are in discussions with the administrators which are continuing to ensure that we can recover the maximum amount of money possible. The implications relating to the pensions situation with Welcome to Yorkshire were known to the Yorkshire Leaders’ Board, as were the consequences in relation to the financial decisions which were taken.”

The debt figures include an unpaid tax bill of £296,000 to HM Revenue and Customs; £2,356 owed in business rates to Leeds City Council; £2,883 owed to Scarborough Borough Council and a debt of £2,823 to the City of York Council.

A Leeds City Council spokesperson said: "We have not received any confirmation of when payment will be made and as this is a live administration, it is the responsibility of the administrators to allocate any funds in accordance with the relevant legislation and the status of each individual debt, e.g. preferential / non-preferential. Business rates is a non-preferential debt."

A spokesperson for Scarborough Council said: “The money is commission for the joint Welcome to Yorkshire and Discover Yorkshire Coast memberships we previously sold to local businesses.

“We have received correspondence from the administrators inviting us to return a completed proof of debt form and vote on the resolutions of the administration. We will therefore be putting in a claim for the amount outstanding."

A City of York Council spokesperson said: “CYC is a very minor creditor of Welcome to Yorkshire – around 0.1 per cent by value of their total debts at closure. We have issued invoices and reminders to them for money which is owed in relation to storage of items at Yorkcraft, but are yet to hear from the Administrators in relation to the likelihood of receiving any payment”

Among the private companies owed money is Swindon-based property consultancy Workman LLP which is due £188,000. The company did not respond to request for comment.

Energy company EON is owed £1,588, Grantley Hall Hotel in Ripon £1,500 and Vodafone £434.

Peer hits out at financial 'incompetence'

Liberal Democrat peer Paul Scriven, a long-standing critic of Welcome to Yorkshire said: “The spotlight of truth is finally beginning to be shone on the incompetence in the approach taken by senior council leaders and elected mayors over a number of years with taxpayers’ hard-earned money. The fact that a public sector pension fund is not going to get the £1.3m it is owed is a disgrace.”

Lord Scriven said the situation is particularly damning given council leaders across Yorkshire agreed to a bailout of over £1m of Welcome to Yorkshire in 2020, while North Yorkshire Council also provided an emergency £500,000 loan to WtY in 2019 when the organisation came close to going out of business.

“So much money has gone trying to save a bankrupt company and they lost the focus on tourism,” he said.

Lord Scriven said those in the public sector involved in decision-making about Welcome to Yorkshire should not have direct involvement in any future destination marketing organisation for the region.

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