A CHARITY which looked after the needs of hundreds of people with hearing difficulties went under after a fall-out with benefit bosses, it has emerged.

East Lancashire Deaf Society (ELDS), in Heaton Street, Blackburn, was placed into administration last month, forcing 76 staff out of work.

But the Telegraph can now reveal the beginning of the end for the 142-year-old charity came when the Department of Work and Pensions (DWP) is said to have withheld payments due to one of their offshoots, Signs Communication NW, under their Access to Work scheme last November.

Administrators have put the outstanding figure at £286,521 after examining ELDS’ own accounting systems. But directors, who include former Royal National Institute for the Deaf chairman Doug Alker, say the accounts were not up-to-date and the total is closer to £400,000.

Loans of £975,000 plus are owed to the Charity Bank Ltd and £567,488 is held as a fixed charge over their Kings Court offices by Christopher Holgate, a former Barnfield director.

If the building is eventually sold then one or both of the parties may benefit. Their offices in Heaton Street, and Burnley’s Keirby Walk and Cannon Street, in Preston, were leasehold.

But staff have been informed any outstanding wages, holiday pay or pension contributions, said to total £71,563 between them, are not expected to be recovered.

Joint administrator Megan Singleton, in a report just filed with Companies House, said the company fell into arrears when the DWP withheld funds last November.

“As such, the company was unable to pay expenses such as staff salaries,” she added.

ELDS directors sought advice from the Charity Bank (CBL) and an initial approach was made to administrators Leonard Curtis.

In the interim, a £100,000 loan was secured from CBL but arrears built up and the administrators were called in again.

An unsuccessful effort was made to market ELDS and related services, like interpreting firm Sign Communications NW, Sound Solutions, Kings Nursery and the Parthenon Greek restaurant before the insolvency was finalised.

The administrators have stressed Kings Court, which has 16 tenants, has continued to trade during the insolvency process.

A DWP spokesman confirmed their Access to Work contract was with Sign Communications NW.

She added: “The support for ELDS staff was delivered by Signs Communications North West and we are currently reviewing that relationship.”