Weston Spirit's commercial arm calls in liquidators

Nov 17 2007 By Dave Higgerson

LIQUIDATORS have been called in to wind up the commercial arm of Liverpool-based youth charity Weston Spirit.
Weston Spirit Trading (WST) was set up seven years ago as a separate company to generate trading profits thatcould be paid to the charity to fund its youth work.

In recent years, however, WST has struggled to make a return and has now collapsed after running up trading losses of £150,000 in the year to March 2007.

In the previous year WST boasted turnover of £896,000 and a growth rate of 60%. That year WST paid £70,000 to the charity, but paid nothing in 2005.

WST supplied skills training and business advice to small firms  and voluntary sector organisations. It received grant funding from the Learning and Skills Council (LSC)which allowed it to offer subsidised training services.

Liquidator Jon Newell, an insolvency partner in the Liverpool office of accountancy firm PKF, said WST had overspent its LSC grant without delivering all of the contracted training courses.

Mr Newell added: “You have to be red hot and on the ball to manage this sort of thing. “Not all the courses were run and the LSC is claiming back the money for the courses that have not happened.”

Mr Newell said the sum in dispute was in the region of £200,000.  “It’s due to an overspend rather than a loss.”

However, Nick Marr, the chief executive of Weston Spirit charity and a board director of WST, insisted that the problems arose from increasingly competitive conditions affecting the training market.

He said: “We did our long-term financial projections and saw there wasn’t enough to allow us to continue to trade. It’s very competitive. The margins are very narrow.

“There were also changes to our funding streams and the way the funds are allocated. There were fewer funds out there and more people vying for them.

“We could not guarantee that we could continue to trade without endangering the charity we were set up to support.”

“It would have been a better business model to have more contracts with the private sector that would have better profit margins than those we have had from the Learning and Skills Council.”

WST went into voluntary liquidation two weeks ago. It was set up in 2000.

For the past six years, WST has provided NVQ and management training to the voluntary, private and public sector and a range of business support services to start-up businesses across Merseyside.

Mr Marr added: “On behalf of WST, I’d like to thank everybody who has worked with us over the years and benefited from our services.”

He said that the decision has the support of the WST board, the charity and the charity’s founder, Falklands War veteran Simon Weston.

“Mr Weston was sad to hear the news but fully understands the reasons.”

Weston Spirit charity provides personal development courses to young people living in deprived areas.

“Weston Spirit charity continues to deliver its youth work across Merseyside and, over the next 12 months, we aim to support a further 5,500 young people in some of the UK’s most deprived areas,” Mr Marr added.

The charity’s premises in a shop at Lime Street is not affected by the liquidation of WST and remains open.