Firms named as council writes off £500k debts

Blackpool Town Hall
Blackpool Town Hall
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Town hall chiefs who have written off almost £500,000 in unpaid business rates have named the companies they claim have not paid up.

Blackpool Council has taken the unusual step of naming the 13 companies in a document on its website, many of them no longer trading, owing five-figure sums that it claims are unrecoverable.

Simon Blackburn

Simon Blackburn

The companies named include popular confectioners Coronation Rock, the company behind the now-closed Abbeydale Care Home and In The Pink Leisure, the former operating company of such venues as Funny Girls.

Council leader Simon Blackburn today said the council had done all it could to recoup the money. But opposition councillors have criticised the decision to publish the names.

He said: “The last thing I want to do is write off this amount of money but unfortunately the options available to us to recoup it have been exhausted.

“Businesses that go into administration often have many creditors that are left out of pocket, we pursue them for as long as we can but in these cases we have no realistic chance of recovery.

“The debts will now be written off for accounting purposes but they will remain on file in case there is an opportunity again in the future.

“What I do struggle to accept is that businesses go into administration owing the public purse money and then set up with a new company name and continue to trade.

“Although there is nothing legally wrong with this practice it does not seem fair on all the other businesses that do pay their rates.”

But Coun Tony Williams, leader of the Tory group on Blackpool Council, said: “I do not think we should be naming people who have gone out of business, especially those that are genuine.

“It is a case of hanging your dirty washing out for all to see.

“This is not positive thinking at all. It is opening people up to ridicule because of their misfortune. Businesses genuinely in financial trouble should be given as much support as possible.”

The document shows the council has written off £463,000 owed by 13 companies and four unnamed individuals in unpaid business rates. The decision affects this year’s budget but in some cases the debts date back several years.

When asked why the list is being released now, Coun Blackburn said: “It is the policy of this administration to be open and transparent. As a council we are often asked for information such as this but there are many restrictions in place due to data protection. Details of business rate write-offs have been provided to the public before under Freedom of Information Act so it made sense to make the information available to anyone who is interested.

“When I am writing a sum of near to £400,000 off I think it is in the public interest for the details of the companies to be published where it is legal to do so.”

In 12 cases, the debts, worth a total of £393,000, became unrecoverable when the companies ceased trading. Another business and four individuals absconded and attempts to trace them have been unsuccessful.

The list includes failed businesses and a charity left owing millions to councils across the country when a High Court judge ruled it had wrongly claimed rate relief because of its charitable status.

Chris Garwood, of Wilkin Chapman, was appointed liquidator of The Public Safety Charitable Trust after the High Court ruling last year left it liable for years of rate relief.

The claims against the company now total £17.7m - £62,000 of that from Blackpool Council - after the company was found to be exploiting its charitable status to help landlords avoid paying rates on properties they were struggling to let, and profiting at public expense.

Mr Garwood said: “For landlords being offered something that looks too good to be true, it probably is.

“It is an unsatisfactory situation when charitable status has been used to avoid rate liability.”

He also questioned the need for Blackpool Council to publish a list of the businesses with outstanding liability, saying it was “not something I have come across before”.

The Charity Commission last year opened a statutory inquiry into PSCT following the court case. A similar inquiry was opened last month into Life Foundation Trust, which owed £34,000 in unpaid rates to Blackpool Council that has now been written off.

In most cases the businesses simply ceased trading but a handful lived on under new ownership.

In The Pink Leisure owed £30,000 in business rates before it went into administration. No one from the company wished to comment. Boss Basil Newby continues to run Funny Girls, and its associated venues, after In The Pink Leisure’s assets were transferred to a new company as part of ‘pre-pack administration’ arrangement.

Coronation Rock Company Ltd went into administration in 2011 but a sale soon after reportedly saved more than a dozen jobs. The company owed the council £12,000 in unpaid rates when it went in liquidation.

Coronation Rock Ltd now operates out of the same premises on Amy Johnson Way. Ian Atkinson is listed as a director for both companies but was not available for comment.

Also on the list was Bayeswater, which ran the Stretton Hotel, on North Promenade, until it went into liquidation in 2013. The hotel still trades but under a different company that has no connection to Bayeswater.

A spokesman for Sharma and Co, which was appointed when Bayeswater got into financial difficulty, said: “A final meeting was called on June 11, 2014. There was no dividend paid to any creditors.”

Advertising firm Store Media PLC owed £56,000 when it went into administration.

A spokesman for insolvency practitioners Wilson Field said: “Robert Dymond and Lisa Hogg of Wilson Field were appointed as Joint Administrators of Store Media PLC on 30th July 2013.

“The company has not traded since that date and it is already public knowledge that there will be no return made to unsecured creditors.”

Also on the list of companies that ceased trading with outstanding tax bills were Nuka London Ltd, which owed £43,000; Air Time Connections Ltd, which owed £18,000, Jiuding Ma Ltd, which traded as Red Dress and had a bill of £14,500; Rock and Ale Venues Ltd, which owed £14,000; Coronation Rock Ltd, which owed £12,000; and Fire and Ice Nightclubs Ltd, which owed £11,000.

Ribble Valley Care Ltd, which ran the Abbeydale Care Home, on New South Promenade, owed £56,000 when it went into liquidation. Nobody representing these companies was available for comment.

Westpool Ltd was the sole named business that absconded. Council officers looking to recover debts of £21,000 were unable to trace the company.

The four unnamed individuals owed a combined £48,000.

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