Welcome to Yorkshire promises to cut reliance on taxpayer funding in next three years

Directors were told in late May 2020 that a £1m tranche of funding expected to be received by the business from the North and West Yorkshire Business Rates Pool would not be made available because of Covid.

The pool usually allows regional council leaders to assign spending of business rates income locally, but companies were exempted from paying the tax due to the pandemic by the Government.

The Welcome to Yorkshire accounts explain the situation led to the organisation having to seek emergency funding from local councils in order to survive - which was granted on the basis that less public sector funding will be needed in future.

“This resulted in the directors undertaking a thorough review of the current and potential income streams and costs of the business to ensure that it was in a position to continue to trade,” they say.

“It was clear that without a new injection of funding the business would need to cease to trade.

“The directors held a series of meetings with local authority partners to obtain confirmation of both their confidence in the new direction of the business and their desire to fund the business in order for it to continue.

“The basis of these meetings was an extension of the current business model into new areas regarding the monetisation of the digital assets and in particular the audience of Yorkshire.com and the reach of the various social media channels.

“A three year business plan, approved by the directors on July 31, 2020, was presented in these meetings.

“The business plan contains monthly cash flows through to March 2023 and is based on a lower reliance on funding from public sector bodies in future years, reduced levels of business and corporate membership resulting from the pandemic, an increase in commercial activity from digital platforms, but reflecting the lower cost based from the action already initiated prior to the pandemic.”

It adds: “A number of sensitivities were run through the business plan which could in combination result in a deterioration in liquidity and should these sensitivities arise then the board would need to reconsider continuing to trade.

“The business plan as prepared was considered by the directors to be a balanced view with upside potential.

“As a result of these meetings, commitments of funding were received that enabled the board to conclude that the business has a viable future and therefore it was appropriate to continue as a going concern.”

James Mason, the chief executive of Welcome to Yorkshire, said work is taking place to make more of the organisation’s online presence.

“The app is still in the development stage but it will be a big strategic part of our future to combine the power of our digital platforms such as large web site traffic and growing social media channels all in one place,” he said.

“The booking system via TXGB is a newly introduced feature for our business members and it is an important part of our future income streams but not essential.

“The aim here is to offer members an opportunity to pay lower commissions compared to some of the bigger platforms in the market.

“This therefore enables us to develop an income stream but because this will be a lower rate for businesses it means more money can stay in the Yorkshire economy.”

Mr Mason said that the company’s plans have been built on the basis that business rates funding will not return next year - meaning that if it does not materialise the issues seen in 2020 which endangered the future of the company should not be repeated.

“There is no assumption that £1m appears from the business rates pool,” he said.

As part of the changes in the past year, Welcome to Yorkshire’s staffing numbers have been cut by more than half to a current workforce of 24 people.

Mr Mason said: “For the workload we have, the number of members we have and the size of the county we are representing, I think 24 people is about right for now, but we are probably a couple of people light, if I am being completely honest.

“But the plan is to only grow and increase costs when we demonstrate we can support that.”

When Mr Mason became Welcome to Yorkshire’s chief executive in January 2020, one of his first key promises was to cut the organisation’s reliance on public sector funding - which at that point made up about half of its income.

Those plans were derailed last year by the Covid-19 crisis, but Mr Mason said while he still believes there is an important place for some public sector support, the right structure is now in place to begin to make reducing that overall contribution a reality.

“It would have been interesting to see how we could have operated in this new way without the pandemic.

“We would have staged events like the Tour de Yorkshire - our ability to generate income was hit by Covid.”

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