Taxpayers are to foot a £½m bill for the failure of a social enterprise in Huddersfield.
Both Kirklees Council and Calderdale Council are out of pocket to the tune of hundreds of thousands of pounds following the collapse of Fresh Horizons.
But a Huddersfield community centre managed by the bankrupt social enterprise is to be saved.
Deighton’s Chestnut Centre, which was managed by the voluntarily liquidated Fresh Horizons, will continue to run as normal for the foreseeable future following the establishment of a new company.
Graham Turner, Kirklees councillor and portfolio holder for Resources and Community Safety, revealed the details following the news that the company had gone bust last week.
It has left Kirklees Council £317,934 out of pocket and Calderdale Council £285,000 down.
The Chestnut Street centre is the main asset to be saved from the property management company, whose insolvency cast doubt over the future of the UK’s largest music lending library it managed, the Yorkshire Music Library (YML) at Red Doles Lane.
But at the Chestnut Centre it means that the library, Woodhouse Children’s Centre , health clinics, a Kirklees Neighbourhood Housing, meeting rooms and an IT suite can continue to run as normal.
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Cllr Turner said: “A new company has been set up as an offshoot from Fresh Horizons to manage the centre, which is linked with the Deighton & Brackenhall Initiative Limited.
“It is a salvageable part of the company.
“We’ve been working with Fresh Horizons for some time over this and monitoring their cash flow since they entered into a corporate voluntary agreement last October.”
He added that the combined work of the council, Fresh Horizons and other parties will also allow local businesses linked to the company to receive money owed.
“All the local people who were owed money should receive it
“Unfortunately, there wasn’t any left for the councils and we have had to forgo the money we are owed.
“It’s never good when this happens to a business but this way we can salvage some parts of the business that benefit the community and local people can get their money.”
Forty jobs have been lost at Fresh Horizons.
Insolvency experts Brook Business Recovery Limited confirmed that the not-for-profit organisation had ceased trading following a meeting with creditors on March 15.
