STAGING the Tour de France left Welcome to Yorkshire (WTY) with losses of more than £1m - including £750,000 worth of unsold merchandise, The Northern Echo can reveal.

The figures were disclosed in a confidential report by accountancy firm KPMG which was brought in after WTY appealed for help.

Although WTY says its finances are now in good shape, the report, which was published in February but has only now being distributed to council members, reveals that the tourism agency forecast a small profit for 2014/2015 - but recorded an actual lost of £1,031,515.

When bosses realised that organising the cycle race would leave a funding gap, an extra £600,000 of merchandise - including Tour de France T-shirts, mugs, pens and badges - was ordered.

Sales were not as strong as hoped, however, and the company was left with £750,000 worth of stock after the race.

WTY has continued to sell Tour merchandise - with goods being sold at knock down prices - however it still had £500,000 of goods left at the end of January.

As well as the unsold merchandise and Tour organising costs being £241,000 over budget, KPMG reported that membership numbers had fallen, meaning this income was £97,000 below budget for the year.

The report stated that WTY owed Tour organisers Amaury Sports Organisation 310,000 euros for marketing expenditure which had to be paid before December 31 this year.

KPMG concluded that as a result of other funding issues, including the loss of millions previously received from former regional development agency Yorkshire Forward, and a reduction in staff, WTY's financial management was "not as strong" as it used to be.

WTY was also criticised for decision making by board members and committees that appeared "fragmented" with a risk of decisions taken

without formal, written approval.

Councils in North Yorkshire have agreed to hand over £200,000 to WTY to help its finances - on the understanding that budgetary plans going forward remain on track.

Two thirds of this money has already been paid with the final third instalment due to be given early next year.

However, Richmondshire district Councillor Stuart Parsons has questioned whether more public money should be handed over given the critical KPMG report.

He said Richmondshire had already agreed to provide a further £27,000 on top of its £10,000 membership fee to help the company's finances on the understanding WTY would begin discussions on relaunching the Dales Festival of Food and Drink, which was cancelled after this year's event.

He described the WTY's financial situation as "astounding".

"I appreciate we have to promote Yorkshire but this should be done within our means. The report is a great shock - I didn't realise it was that bad."

Cllr Parsons was also critical of WTY chief executive Sir Gary Verity who according to the accounts will be paid almost £210,000 in 2015/2016.

"If he had taken a 25 per cent cut as a gesture to reestablishing financial viability that would have been a good start."

The Tour de France's visit to Yorkshire in July 201 was declared a huge success, generating an estimated £102 million for the Yorkshire economy with 2.3 million people watching from the roadside over the two days.

WTY confirmed Leeds City Council commissioned KPMG to carry out a "high level review of finance and governance arrangements" at the company.

"This in-year assessment has helped to inform Welcome to Yorkshire’s financial and governance plans and its recommendations are being implemented. Our full accounts for 2014-2015 will be published in December 2015," a spokeswoman said.

She added that the Yorkshire stages of the Tour de France were described by the tour director as the "greatest Grand Départ in the history of the race".

"This year’s Tour de Yorkshire brought 1.5 million people out around the county, with many local businesses seeing large increases in profits. Yorkshire remains in the national spotlight and just last week was shortlisted in VisitEngland’s search to find the country’s Home of Sport.

"Latest statistics show that visitors to Yorkshire are up almost a quarter on 2014. Welcome to Yorkshire will continue our work to make Yorkshire a place that people around the world want to visit.”

Following the success of the Tour, WTY chief Gary Verity was knighted in the Queen's Birthday Honours list in June.