A Leyland company has been told it doesn’t have to pay business rates for the rest of the financial year.
Orvia, which offers advice and support for start-up businesses across South Ribble, has asked the council for hardship relief because it is struggling in the current economic climate.
South Ribble Council has agreed to the proposals, saying that if the firm was the fail, it would fall on their shoulders, but some councillors have spoken out against it.
Leader of the Labour group, Coun Matthew Tomlinson, said: “This is a private company, so why does it deserve any more help than other private businesses in the borough?
“This is an example of a private company asking for taxpayers’ money.”
Coun Mike Titherington said: “Orvia has raised concerns about coping in this ‘economic climate’ - but who isn’t struggling these days?
“My worry is that this will set a precedent for other firms in South Ribble to seek similar financial relief.
“The council has reduced its funds to charity because it is also struggling financially, so to agree to this for Orvia is a contradiction.”
Coun Donald Harrison added: “We should be focusing on helping families who are struggling.
“Last month, 30 families in Leyland were flooded out, many with no insurance, and it has destroyed their lives.
“They still have to pay full council tax, even those in homes which are barely liveable now.”
But the proposal was passed by a vote of 28 to 20 at a full council meeting, with the Conservative party saying that the council should support local businesses.
It means that the operating costs of Orvia will reduce by approximately £28,000 for this financial year, up to March 2013.
South Ribble Council will meet 25 per cent of the costs, while the government makes up the other 75 per cent.
Coun Stephen Robinson, cabinet member for Finance and Resources, said: “Orvia works closely with the council and it has been experiencing difficulties with its chief executive leaving and with access to grant funding which it has received over the years.”
He added: “I have every sympathy with what has been said, but Orvia advises 84 businesses with 400 people, and this relief is only for a period of eight months.
“I don’t believe this sets a precedent, and if Orvia collapses, much of that burden would fall on the council.
“While the company is going through a restructure, the council should support it.
“With regards the flooding issues; there is nothing worse. But we can’t make comparisons with that and Orvia.”