The collapse of a firm set up to provide work experience placements is set to cost Blackpool taxpayers hundreds of thousands of pounds.
Blackpool Council’s Executive will tonight approve proposals to write off a £300,000 investment in the VIA partnership.
That does not reflect well on any of the authorities involved
The firm, established jointly by Blackpool Council, Lancashire County Council and Blackburn with Darwen Council, was set up in 2014 to provide careers advice and training.
It entered administration in December last year following an ‘inadequate’ rating from education watchdog Ofsted.
Blackpool Council is now preparing to write off a total of £296.939.78 – a move which has drawn heavy criticism from some quarters.
Coun Tony Williams, leader of the opposition Conservative group at Blackpool Council insisted the problems went far beyond the financial implications for the authority.
He said: “When you consider this company was set up by three local authorities – Lancashire, Blackpool and Blackburn with Darwen – which have responsibility for education it seems slightly amiss that the it should have failed on the back of a poor Ofsted.
“That does not reflect well on any of the authorities involved.”
Coun Williams made it clear £300,000 was a sum Blackpool could ill-afford to lose.
“I know it isn’t from the same pot and this money wouldn’t have been spent in such a way but £300,000 could keep the green bin collections free.
“It could have kept the grass being cut.
“When there are cuts to the budget being made and services under threat this is a significant amount of money.
“It is money Blackpool Council can ill-afford to simply write off.”
The Via Partnership, trading as Connexions, was responsible for arranging hundreds of work experience placements for young people across Lancashire.
It had more than 200 apprentice and training clients and provided careers advice to thousands students at many schools and colleges.
And Coun Williams made it clear the young people who used the service were the people who had lost the most.
He said: “The strongest point to make here is that people have lost their placements, the chance to experience work and to improve their chances.”
Blackpool Council’s Executive will be asked to approve the write-off tonight.
A report prepared for councillors makes clear the cash will be covered by provisions set aside in the budget for uncollectable debt.
It is made clear that debts which remain uncollectable but are not written off will impact on the authority’s collection performance figures which are monitored monthly.
Blackpool Council had a 30 per cent stake in the company with Lancashire County Council the largest investor, providing 40 per cent of funding.
More than 70 jobs were lost when the firm went into administration.
Blackpool Council leader, Coun Simon Blackburn said: “At the time of the loans made by ourselves, Lancashire County Council and Blackburn with Darwen Council, the Via partnership was in a decent position, turning over around £4m a year.
“For eighteen months, we received interest payments on the loan, however after the loss of a major contract the company collapsed and there was no way to recover the outstanding debt.
“The Via partnership was successful for a number of years and the loan helped hundreds of young people get access to training and apprenticeships, as well as keeping local people in work to carry out that important job.
“More often than not, our business loans are fully repaid along with interest, increasing the council’s budget as well as allowing companies to proper and local jobs to be created. The fund of money from these successful loans and interest payments will cover the cost of this particular debt write-off.
“It is a bit naive for Coun Williams to think that not making investments would save the council money.
“If we went down the route he suggests, we would never invest in anything and not only would the Council be worse off, but so would the town as a whole.
“With the Conservative government hitting Blackpool with the harshest cuts of any council in the country this year on top of all the cuts we’ve already suffered, it is no use being scared of our own shadows, we have to make bold decisions if we are going to improve things.”