A Blaydon-on-Tyne scaffolding firm which tried to wipe away a £260,000 debt has been refused an operator’s licence.

Traffic Commissioner Kevin Rooney ruled that SNE Sales & Hire was not of good repute after its director, Cheryl Gray, said the business was a device to allow an existing firm to continue – even though it was in liquidation.

Gray also admitted that SNE Hire & Sales had been running vehicles without a licence throughout 2015.

In a written decision, Rooney said he was in no doubt Gray knew that to use the vehicles following the liquidation of Scaffolding North East was unlawful.

“That is what drove her to make an early application for a new operator’s licence,” he added.

“The applicant company has continued to operate vehicles without the authority of an operator’s licence and I find that it has done so knowingly. The application form and related correspondence has contained incorrect and untruthful statements.”

During an inquiry in February, Rooney heard that two new companies, SNE Hire & Sales and SNE Newcastle had been set up in November 2014.

Issues relating to tax payments for an existing firm, Scaffolding North East, which held an operator’s licence, arose in 2015. As a result, a new licence application was also made by SNE Newcastle.

Scaffolding North East entered liquidation in August 2015.

The regulator also heard that a previous firm linked to the applicants, City Scaffolding (Northern) Ltd, had also entered liquidation in 2010 with an estimated deficiency of £281,000.

In his written decision, Rooney said: “It was freely admitted to me by Gray that SNE Hire & Sales Ltd was also a device to allow the business of Scaffolding North East Ltd to continue having wiped away its debt to the crown. That in itself is enough to conclude the applicant is not of good repute.”

He also warned others in the industry about the impact of financial insolvency on future operations.

“The Senior Traffic Commissioner’s guidance on good repute is clear about the consequences where businesses try to avoid their liabilities.

“Unscrupulous individuals who seek to do this by putting companies into insolvency arrangements or continuing to trade while insolvent – and without proper licence authority – are attempting to gain an unfair competitive advantage over legitimate operators.

“A key part of the traffic commissioners’ remit is to maintain fair competition in the industry. This means that compliant operators who do things properly are not placed at a disadvantage by those running outside of the rules.”

“My decision in this case means that a business which attempted to avoid its liabilities cannot continue to operate vehicles and take work from legitimate operators.”

SNE Hire & Sales has lodged an appeal against the Traffic Commissioner’s decision with the Upper Tribunal.

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