The money, which has been secured against a WTY-owned property in York valued at £1m, has to be repaid by November 2020 under the current terms of its agreement with the council.
The Yorkshire Post has previously revealed that WTY would have run out of money and been unable to pay staff in September without taking out the loan that month. The loan facility had been agreed by the council in June 2015, with Welcome to Yorkshire given five years to take up the option at the time.
After taking out the loan in late September, WTY subsequently secured another £1m in support from North and West Yorkshire councils in October but was dropped from an ongoing marketing campaign for the North York Moors after failing to provide sufficient assurances about its financial sustainability.
A review of WTY’s finances conducted by a Local Government Association representative and an independent financial adviser written in August prior to the loan facility being used suggested extra time would be needed to make repayments.
“The loan agreement as it currently stands would require repayment by November 2020 and therefore a revision to the terms would be necessary,” it said.
A spokesperson for WTY told The Yorkshire Post said the repayment dates for the loan “remain as indicated” but would be discussed at the organisation’s next board meeting in December.
New appointments to the WTY are in the process of being made as part of a management shake-up but North Yorkshire County Council leader Carl Les has remained as one of its public sector members.
Earlier this year, WTY’s board of directors had backed plans to sell the York building the council loan is secured against in a bid to help the company’s financial position but that process has now been put on hold.
The spokesperson said: “In view of recent changes in the board this matter will be subject to further consideration.”
The company, which is privately-run but receives millions in public funding, has been struggling to recover from the fallout to the resignation of its ex-chief executive Sir Gary Verity in March. Sir Gary resigned on health grounds in the midst of expenses and bullying allegations.
Subsequent inquiries found 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.
WTY chairman Ron McMillan resigned from the organisation in April and interim chairman Keith Stewart was ousted last month by council leaders in exchange for more funding being provided to the organisation. Wakefield Council leader Peter Box was installed as chairman and has spoken of a “spend now, worry about it later culture” pushing the agency to the brink of collapse.
A replacement for Sir Gary as chief executive is yet to be appointed but Kirklees Council chief executive Jacqui Gedman is currently providing ‘strategic support’.