Public may pay debts of failed fire company

A TRAINING company set up by a fire authority to generate hundreds of thousands of pounds of badly needed income has ended in financial failure with outstanding debts likely to fall on the public purse.

South Yorkshire Fire Authority has admitted its ill-starred commercial venture, set up in 2013, will not make anything close to the profits originally envisaged and will have to close.

It is not yet known how much the closure will cost though it is known that £15,100 was paid to an accountancy firm to provide a report which confirmed a dire financial outlook which was used to recommend closure.

The report by PwC also said that South Yorkshire Fire and Rescue Safety Solutions Ltd, wholly owned by the fire authority, was exposed to a risk of breaking state aid rules through the way running costs had been funded by the authority.

The report was produced last summer but has only now been made available to fire authority members, councillors from Sheffield, Rotherham, Barnsley and Doncaster councils. It is unclear why the fire authority did not act on the report until now or why members did not see it before.

The fire authority could not comment. Instead, a statement was issued by South Yorkshire Fire Service, which provided resources to the company, including staff, but had struggled to recover payment for them. A spokesman said: “Safety Solutions UK Ltd was set up by

the Fire Authority in anticipation of future profits being reinvested into the service. The company’s performance has been regularly scrutinised, but fell short of its initial business projections.

“A shareholder meeting approved a recommendation to begin a managed closure of the company, which will be delivered with minimal impact on the service and its activities.”

The PwC report said the fire authority “could be breaching state aid rules (and therefore subject to fines) if SSUK Ltd is considered to be subsidised… and thus given a ‘competitive advantage’. This is because the recharges between SYFRA (fire authority) and the company do not include all areas and are not based on full costs.”

The fire service spokesman insisted “there is not any information to suggest that state aid laws have been breached” but declined to clarify. South Yorkshire Fire Service provided a £100,000 loan to set up the trading arm in late 2013 after drawing up a business plan which estimated profits of £182,660 would be delivered in the first two years of trading and a further £93,550 in the third year.

In reality, the company recorded a loss of £22,674 in its first 16 months and a loss of £30,334 in 2015/16. The company reported a profit of £21,394 last year but it has been relying on the fire service funding substantial running costs which it has struggled to repay.