Councillor defends loan to Northumberland Foods
Sep 2 2010 The Journal
A SENIOR Northumberland councillor yesterday defended the county council against accusations of secrecy over its handling of a £250,000 loan to a food company which later collapsed with the loss of 250 jobs.
Andrew Tebbutt - executive member for corporate resources - said he understood concerns voiced by some members that they were not kept fully informed about the situation regarding the loan to Amble-based Northumberland Foods.
But he said there were times when dealing with “delicate and sensitive” issues that difficult judgements had to be made about how widely to share information.
Coun Tebbutt said the loan had not been repaid by the company - which has now ceased trading and made its entire workforce redundant - but claimed it still could be.
In any case, he said it had been a price worth paying in helping Northumberland Foods to survive for a further year and keep its employees in work.
The county council agreed to make the loan a year ago - despite a warning from officers that the move carried a high element of risk - and it was due to be repaid by last December 31.
The frozen potato producer ceased trading two weeks ago after negotiations with a firm interested in buying it broke down at the 11th hour.
Yesterday, at a full meeting of the county council in Morpeth, Conservative councillor Colin Horncastle said he and other members had found it extremely difficult to find out what was going on behind the scenes since the deadline passed for repayment of the £250,000.
He said the affair had been ‘shrouded in secrecy’ and elected councillors, who made the original decision to lend the money, should have been kept better informed.
Coun Tebbutt said the council was aware that any publicity about Northumberland Foods was having a negative impact on the company.
“We believed that in the best interests of the 250 staff we had a primary duty to keep them in a job, and all the council’s leaders are proud of the fact that we managed to keep that company going for another year.
“We have invested money which we have not received back yet. We may receive it in due course. I would be very disappointed if anyone here thinks that was not a decision rightly made.”
Northumberland Foods administrators, Begbies Traynor, says it has had several inquiries from parties interested in taking over the company.
