Blackpool council tax-payers lose out as businesses including Funny Girls fail to pay

Basil Newby
Basil Newby
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Debts of more than £700,000 have been written off by Blackpool Council.

The sum includes more than £300,000 owed by Funny Girls Ltd – which ran five venues in the resort including Flamingo and the Flying Handbag – when it went into administration last year.

Coun Simon Blackburn

Coun Simon Blackburn

Council figures show £695,548 of business rates due between April and September last year have had to be written off – leaving council tax-payers out of pocket.

This includes £308,214 owed by Funny Girls Ltd. Its venues, including Funny Girls on Dickson, were taken over by Lancashire brewery Thwaites after the company went into administration in September.

As reported last November, the collapse of Basil Newby’s empire , also left a debt of £723,007 owed to the tax man, as well as £2,410 to Blackpool’s Pubwatch scheme and £8,300 to Blackpool Business Improvement District.

At that time administrators KPMG said it was “highly unlikely” funds could be raised to repay the debts.

The second biggest sum of business rates written off is £106,285 owed by Dudley Leisure Ltd, which trades as the Viva Showbar on Central Promenade.

Cash flow problems at the firm saw it enter into a company voluntary arrangement early last year to manage its debts.

Council leader Simon Blackburn said: “Our director of resources has personally met with businesses to agree flexible payment arrangements, in some cases this has been successful.

“However there are examples where the businesses have gone back on their word leaving the tax payer out of pocket.”

Mr Newby, who is now retired, said he had been in process of appealing against his firm’s business rates, which he believed had been overpaid, when Funny Girls Ltd went into administration.

He said he had been advised his rates should have reduced after “turnover had dropped”, meaning the amount owed to the taxpayer would have been lower.

“It is sad that happened but they had 40 years of good rates out of me,” he added.

Sums of between £10,000 and £51,000 are owed in business rates by 10 further debtors including shops, a hotel, a restaurant and a pub.

The council has also written off £5,194 in shared takings owed by Uvenco Ltd which supplied coffee machines to three sports centres until it went into liquidation in May last year. Council tax of more than £8,000, covering 11 years, has been written off after the debtor became insolvent, and benefit overpayments of more than £13,000 are deemed unrecoverable as both debtors have died penniless.

Coun Blackburn said: “Every year we are faced with the same issue as every other council in the country – writing off debts that we have no chance of recouping

“Whilst we show flexibility to those who are genuinely struggling to pay, we are robust with those who do not engage. We know that in some cases taking immediate action could cause a business to close, which will lead to Blackpool residents losing their jobs.

“Inevitably there will be instances where businesses fail and residents pass away with no estate.

“At that time the decision will be made to write the debt off, which could be some years later once all avenues have been explored.”

However the council’s collection rates for council tax and business rates have continued to improve.

In 2017/18 Blackpool Council had the single most improved ‘in-year’ council tax collection rate among all 326 English local authorities and for business rates it achieved the eighth most improved collection rate.

Business rates collection in the last financial year stood at £47m – 95.6 per cent – and 91.3 per cent of council tax had been collected. The figures represent in-year improvements of 1.68 and 1.32 per cent respectively.

Coun Blackburn added: “These impressive figures are testament to the hard-working staff that continue to pursue every opportunity available.

“The amount we have to write-off is very small in comparison to the millions we successfully collect.”

The most recent write-offs compare to £690,000 in business rates written off in November 2017, and £316,000 in August 2018.