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Gloucestershire Business News

Apology demanded over Marketing Gloucester bailout

Councillors are demanding that the former leader of Gloucester City Council apologise for the financial collapse of Marketing Gloucester.

The Liberal Democrats have tabled a motion to the city council calling on councillor Paul James to apologise after the arm's length organisation was bailed out to the tune of £240,000 with public money.

The council had to give Marketing Gloucester, which was responsible for promoting the city and running events like major draw that is The Tall Ships Festival, the injection of funds for it to keep running.

An independent report by Grant Thornton, brought in by the city council to review Marketing Gloucester, found it had a "lack of clarity about the purpose, vision, strategic and operational priorities".

"Overall, MGL had net liabilities of circa £220,000 and £286,000 at 31 March 2018 and 31 March 2019 respectively. At 31 October 2019, net liabilities were £262,000. MGL is therefore technically insolvent due to its net liability position," said the report, one of two commissioned by the local authority.

Jason Smith, the chief executive of Marketing Gloucester since 2016 was dismissed just before Christmas in the immediate wake of the reports going public.

Councillor Paul James, stood down as leader of the council in November last year and resigned as chair of the Marketing Gloucester board in May.

He dismissed the Liberal Democrats motion as "mean-spirited" and said Marketing Gloucester had been hit by a dramatic reduction in funding from the city council.

Councillor Jeremy Hilton, leader of Gloucester Liberal Democrats in Gloucester, said: "Councillor Paul James was chair of the board for eight years, which had oversight of Marketing Gloucester when it racked up this huge overspend.

"It's clear the board did not properly take a grip of expenditure and allowed things to get out of control.

"Councillor James, as chair, should have had better control over the governance and financial management of Marketing Gloucester.

"He owes the taxpayers of Gloucester an apology. This should never have happened."

Councillor Declan Wilson, deputy leader of Gloucester Liberal Democrats, said: "Two independent reports have recommended that councillors and the city council take back control of Marketing Gloucester.

"That is something we support. It's clear that there has not been a proper scrutiny of the financial and governance of Marketing Gloucester by the board. That has to change."

Cllr James said: "This is a mean-spirited motion, which is sadly typical of the Liberal Democrats, and serves no purpose other than seeking to score party political points.

"The financial problems at Marketing Gloucester were caused by a £500,000 reduction in council funding and no reduction in what the council expected from the company.

"These were decisions in which I played no part because of the conflict of interest I had as leader and chair of the board.

"I am sorry the company was not able, despite the heroic efforts of staff, to make up all of this shortfall from other sources but it made significant progress towards it.

"Marketing Gloucester's work has brought in millions of visitors to the city and many millions of pounds of investment, growing the city's visitor economy by 68 per cent over the last 10 years.

"I'm proud of what it has achieved and I certainly won't be apologising for that."

The motion, which will be debated by councillors on Thursday, January 30, said: "This council notes the report that was presented to the Overview & Scrutiny Committee in relation to the organisational and financial failings of Marketing Gloucester Ltd, a company 100 per cent owned by Gloucester City Council.

"This council welcomes the recommendations in the report and the resolutions agreed by the OSC.

"This council calls for a written apology from the former chair of the board and former leader of this council, who was responsible for the financial and organisational crisis that has hit MGL, which forced this council to bailout the company to the tune of £240,000 to help keep the company solvent."

A new interim chief executive of Marketing Gloucester was appointed last week.

Steve Brown comes to the city after working for Make it York. He has also sat on the boards of Marketing Birmingham, the Newcastle Gateshead Initiative and the York Business Improvement District.

His arrival came just after staff more fall-out became public - with Marketing Gloucester staff being told their jobs were now uncertain, with all of them entering a 45-day period of consultation over their futures.

Read more: Who is blowing the storm clouds towards Marketing Gloucester?

Read more: Split in half: Report recommends changes after criticising Marketing Gloucester and City Council 

Read more: Marketing Gloucester boss sacked 

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