Welcome to Yorkshire: Wakefield Council praised for refusing to bail out ‘sinking ship’

The collapse of Welcome to Yorkshire has “no financial implications” for Wakefield Council, a meeting heard.
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A senior councillor gave the assurance after being asked if the district’s taxpayers would be hit by the tourism agency going into administration.

The local authority refused to contribute when asked to help bail out the organisation three years ago.

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Earlier this month, liquidators revealed Welcome to Yorkshire owed more than £3m to creditors at the time of its collapse – 75 per cent more than originally estimated.

Wakefield One, Wakefield Council's headquartersWakefield One, Wakefield Council's headquarters
Wakefield One, Wakefield Council's headquarters

Tony Homewood, independent councillor for Ossett, tabled a question to Les Shaw, cabinet member for resources, about any financial impact of the collapse on Wakefield Council.

Responding to the question at a full council meeting on Wednesday (November 29), Coun Shaw said: “Thanks for bringing this question to council.

“It is something that I picked up myself when it was announced that Welcome to Yorkshire was reported to owe 75 per cent more to creditors than originally projected.

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“I need a brief moment to remind colleagues that, in September 2020, cabinet took the decision to withdraw funding from Welcome to Yorkshire.

“So I am pleased to be able to reassure Councillor Homewood and colleagues all across the chamber that the council does not have any outstanding debt with Welcome to Yorkshire and there will be no financial implications for the council or our residents within the district.”

Coun Homewood was asked by Wakefield mayor Josie Pritchard if he had a further question to the response.

He replied: “No, I think the question has been answered.

“I would just like to congratulate the council leader (Denise Jeffery) on having the good sense not to pour any more money into a sinking ship.”

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A report by liquidators Armstrong Watson revealed that Welcome to Yorkshire was in a worse financial situation than had been believed at the time of going into administration.

The report said there will be “sufficient funds” to repay some money towards creditors but it is not yet clear how much. It did not list who is owed money.

Claims totalling £9,750 from former members of staff listed as preferential creditors have been repaid in full.

A “Statement of Affairs” document published on Companies House in April 2022 revealed at that stage that Welcome to Yorkshire had £2.1m of identified debts to 67 different creditors.

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The company had just over £1m in estimated assets at the time of its collapse.

The debt figures included an unpaid tax bill of £296,000.

That money is expected to be repaid in full and liquidators said talks are ongoing about a potential VAT overpayment which may reduce the final amount being claimed by the tax service.

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In September 2020, senior councillors refused to help bail out the troubled agency.

The council’s officers had advised paying £78,000 of taxpayer cash.

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At that time, the organisation was in dire financial straits and was seeking a £1.4m emergency payout.

Cabinet members said they believed the money would be better spent locally.

They said the council would continue to pay its £12,000 a year subscription to to the organisation but that it could not justify paying out any more money.

Instead, the money was ring-fenced and spent on its own efforts to draw visitors to Wakefield.

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At the time, transport portfolio holder Matthew Morley said: “I just don’t think it gives any economic benefit to Wakefield whatsoever.

“Welcome to Yorkshire have led a very lavish lifestyle, more than they could (afford) really.

“I can’t support funding them any longer.”

Portfolio holder for communities Maureen Cummings said: “I haven’t seen any benefit of being a member from Welcome to Yorkshire.

“Yes, we got the Tour de Yorkshire coming through the district but not everyone felt the benefit of that.

“It cost an awful lot of money.

“I think we need to look after our own at this moment in time.”