The director of a North East insulation firm has claimed changes to the Government’s eco cashback scheme led to the collapse of his company.
Stockton-based Cosyseal Insulation – part of the Cosyseal Group – has ceased trading, leaving 27 staff members out of work.
Administrators at Baker Tilly, including Sunderland-based restructuring specialist Steven Ross, were appointed on July 4 and are now in the process of realising assets for creditors.
However, founder and managing director Paul Gaffney remains hopeful that the firm can be rebuilt and redundant workers re-employed.
He claims the Government “moved the goal posts” on its flagship energy programme, Green Deal, which led to the demise of Cosyseal Insulation, which had been providing insulation services for the past 20 years.
He said: “The Green Deal has lacked clarity, goal posts were changed on a regular basis – how could we have moved on and invested when we did not have that visibility? We are just the political pawns.”
The Green Deal cashback scheme, which offered £7,600 to people improving the energy efficiency of their homes, was shut with immediate effect from 6.30pm last Thursday, July 24, following a rush of applications that threatened to blow the budget.
The Green Deal Home Improvement Fund (GDHIF) had been set up to boost the Government’s energy efficiency programme, but applying for cash within the scheme was simplified in June, a move which proved extremely popular. By last Tuesday, July 22, the Department of Energy and Climate said it would change the maximum payout from Friday, July 25, after £50m of the £120m budget had already been taken.
That triggered a rush of applications and the remaining £70m was grabbed in just three days, leading the Government department to halt the scheme.
Cosyseal Insulation MD Gaffney said his firm floundered after the Government altered the scheme.
He said: “We had already signed contracts in 2013 to deliver contracts under the Government’s Green Deal programme, or ECO scheme.
“We were caught in limbo between contracts, because of the Government U-turn funding of the grant schemes. Invoices or contracts were in dispute.
“We had to withdraw funding immediately. There was no way we could honour the contracts that were in place. We notified contract partners there had been unforeseen circumstances. With the short notice given, major contracts weren’t happy and the rest is history. It’s extremely sad that we find ourselves in this situation – but we are looking for the silver lining.
“We have had good, loyal staff, and we appreciate that loyalty. We are looking to bring people that have been made redundant back on, once we decide what to do in the future. We will see if there’s a marketplace for us, if there isn’t then we will decide what to do.”
Cosyseal started in 1994. The rest of the group, which also installs cladding and solar power, will continue to trade as normal.
A spokesman for Baker Tilly added: “The company has ceased trading. Twenty seven employees have been made redundant and the administrators have assisted them with the claims to the Redundancy Payment Office. Eight staff have been retained in the short term to assist the administrators to realise assets for creditors.”