Lancashire County Council's £500k Connexions write-off
Lancashire County Council is writing off £500,000 invested in a business which folded with the loss of 70 jobs.
The Via Partnership trading as Connexions went into administration in December.
It offered careers advice and training in a joint venture with Blackpool and Blackburn with Darwen Council.
The company folded "after losing a major contract" but helped "hundreds of young people", said Blackpool Council leader Simon Blackburn.
It comes as Lancashire County Council has to make savings of £85m next year and £200m more over the next four years.
The authority said in a statement: "When issues with the company's cash flow became evident, the county council, along with the company's other shareholders, actively explored the options for a management buyout or sale to a third party.
"It only became clear in early December last year that there was no realistic prospect of a sale of the company at which point the decision was taken to place Via into administration."
Blackpool Council has already written off £300,000 and Blackburn with Darwen has been unavailable for comment on its investment.
Councillor Blackburn said after receiving interest payments on the loan for 18 months the company collapsed after the "loss of a major contract and there was no way to recover the outstanding debt".
He said when the loans were made the Via Partnership was turning over around £4m a year.
He added: "The Via partnership was successful for a number of years and the loan helped hundreds of young people get access to training and apprenticeships, as well as keeping local people in work to carry out that important job."