A review is taking place into the extent of scandal-hit Welcome to Yorkshire’s pension deficit - following a warning the liabilities could increase the cost of closing down the financially-troubled tourism agency.
Previously-classified financial reports published this week have revealed that the privately-run company, which receives millions of pounds of public funding each year, has come close to the financial collapse in recent months in the wake of the expenses scandal linked to its ex-chief executive Sir Gary Verity.
One of the reports, written by interim chairman Keith Stewart - who was ousted by local council leaders last week and replaced as chair by Wakefield Council leader Peter Box - said that closing down Welcome to Yorkshire by March next year would cost £3.18m.
His report added that figure “will” rise further once an ongoing assessment of Welcome to Yorkshire’s pension position - a review done as standard every three years - is completed. WTY participates in a local government pension scheme administered by North Yorkshire County Council.
“This figure will increase as there is no estimate available at this stage for the negative effect on the NYCC pension fund as a triennial valuation is currently under way,” Mr Stewart’s report said.
A spokesperson for Welcome to Yorkshire said today that the results of the valuation “will be available in the next few weeks”.
According to Welcome to Yorkshire’s most recently published full accounts, which were for the 2017/18 financial year, the organisation’s pension deficit at the end of March 2018 stood at £260,000 - down from a deficit of £604,000 the year before.
The accounts said that the local government scheme WTY was involved with is a defined benefit scheme based on final pensionable salaries but added that it stopped admitting new members to that scheme in 2010.
The option of a “managed closedown” of WTY was put to North and West Yorkshire council leaders last week - but they were warned by Mr Stewart that doing so would cost millions, make almost 50 people redundant, cause “severe reputational damage” to Yorkshire and result in a replacement organisation needing to be established.
Council leaders instead opted to provide £1m in further funding to the organisation in the coming months subject to a series of conditions - including the replacement of Mr Stewart and the implementation of delayed governance changes. It follows WTY taking out a £500,000 loan from North Yorkshire County Council.
The company’s 2018/19 accounts are currently being audited and are due to be published before the end of December - with auditors due to determine whether the organisation remains financially sustainable.
An independent assessment of WTY’s financial position ordered by council bosses and made public this week warned it would currently “seem unlikely that the auditor could easily conclude that Welcome to Yorkshire is a going concern”.
New chairman will take salary
Wakefield Council leader Peter Box will take a salary from Welcome to Yorkshire from December, it has been confirmed.
Coun Box is currently not being paid in his role as WTY chairman but the company has confirmed this will change once he steps down as Wakefield Council leader at the end of November.
A spokesperson said: “Peter Box is currently not being paid by Welcome to Yorkshire for his role as Chair, but we can confirm he will receive £26,335 per annum after his term of office is completed as leader of Wakefield Council at the end of November.”
His decision to take a salary has been criticised by Liberal Democrat peer and former Sheffield Council leader Paul Scriven, who has been an outspoken critic of WTY’s handling of the fallout from its expenses scandal.
Lord Scriven said: “Welcome to Yorkshire isn’t a public charity to be bailed out by the local taxpayers but a private company that has to live within its means.
“Peter Box as its new chair needs to show that he is not just talking the talk but is serious about turning its finances around. That starts with him not taking any money or expenses from his role as chairman until such time as Welcome to Yorkshire has shown positive cashflow and been in the black for six consecutive months.”