Growth money awarded to a North East firm just months before it collapsed into administration will be recycled, the Government has confirmed.
Administrators were appointed to Tinsley Special Products on November 7 after the firm suffered a downturn in trade, leaving a question mark over what would happen to £3.5m of Regional Growth Fund money awarded to the firm in April.
The Department for Business, Innovation and Skills (BIS) yesterday confirmed the public money would be recycled into future rounds, just over six months since it had been promised to Tinsley.
The funding had been earmarked to finance the development of a new Peterlee factory which was expected to create 86 jobs.
A BIS spokesperson said: “It is sad news that Tinsley Special Products have gone into administration. The company had received two RGF grants in full in recent years which were both delivering much needed jobs in the North East.
“A more recent award had yet to be paid and will now be recycled.”
Tinsley had taken receipt of £2.9m funding in an earlier RGF round, a move which had created 63 jobs.
At the time of this year’s RGF announcement, Tinsley hosted Justice Minister Simon Hughes on a visit to the North East in support of the finance programme.
Speaking on the visit, Mr Hughes said: “As a Government, we have been striving to rebalance the economy away from London and away from the financial sector. It is projects like Tinsley that demonstrate the real, tangible jobs and growth delivered by the RGF.”
This week administrator Alan Kelly from restructuring specialists Baker Tilly said that work was under way to find out if any money owed to creditors could be paid back.
Mr Kelly also confirmed that Baker Tilly was advising Tinsley’s employees in making claims for outstanding wages, holiday pay and other claims from the Redundancy Payments Service - the government’s Insolvency Service division which administers statutory redundancy payments.
Earlier this year the County Durham-based Tinsley acquired Marshall Aerospace and Defence Group’s Mildenhall operations in Suffolk, and had planned to create more jobs on the site across functions such as robotic weld and fabrication, zinc phosphate, electro-dip and paint finishing.
In January they bought Tanfield Engineering Systems Ltd out of administration in a bid to capitalise on its defence market presence.