250 staff at Northumberland Foods laid-off
Aug 21 2010 by Brian Daniel, The Journal
ADMINISTRATORS have told the 250 staff losing their jobs at a Northumberland food factory they will not receive any redundancy pay from the failed firm.
Northumberland Foods at Amble closed after negotiations with a company interested in buying it broke down following days of talks.
The frozen potato production company had been placed into administration on Wednesday, when most staff were sent home and told to await further news.
It is believed some staff have not been paid for up to three weeks, while administrator Begbies Traynor confirmed they will not receive redundancy payments from the business.
Last night there were questions over why council spending chiefs had ignored their own risk warnings and handed the firm a loan last year.
Northumberland Goods, formerly Cheviot Foods, owed Northumberland County Council £250,000 after failing to repay a loan made last August and due to have been reimbursed at the end of last year.
That loan package was part of taxpayer-funded measures of loans and grants worth more than £1m over the last 18 months.
The company, said to have a turnover of £20m last year, had also had a County Court judgment filed against it at Bishop Auckland county court last week.
The Journal has been told the firm also owed its electricity supplier E.ON £270,000, although that company would not comment on this yesterday.
Staff at what was Amble’s biggest employer were summoned to the site by administrators at 11am yesterday, when they were told they were being made redundant.
Workers left the Coquet Enterprise Park site soon afterwards clutching their belongings in bin liners and spoke of their anger and worry.
A statement from the administrator said: "Though the company was loss making and facing cash flow problems, we have been working hard to secure a sale to an interested party which would have rescued the company and saved the entire workforce.
"Unfortunately, despite the hard work and commitment of all concerned, this has not proved possible with negotiations failing at the eleventh hour.
"Given the lack of interested parties and the company’s substantial funding requirement in order to continue trading, we have been left with no alternative but for the company to cease trading immediately."
