TAXPAYERS are footing the £1m bill for a Hartlepool-based company which suddenly collapsed with the loss of over 1,000 jobs.
A Freedom of Information request has revealed that the now-defunct Garlands call centre received £500,000 in cash grants from the public-funded regional development agency One North East from 2006-2007.
And as previously reported by the Mail, the taxpayers’ purse has also had to cough up almost £560,000 to pay 298 disgruntled staff £1,800 each in unpaid wages following a ruling by a judge at an employment tribunal.
Chey Garland, who owned the company which went into administration on May 31 last year, was not available for comment at the time the Mail went to press.
However, she has previously publicly blamed its downfall on contracts going overseas.
Today One North East defended its decision to give Garlands the funding because it was a “viable business” at the time.
A One North East spokesman said: “All the applications for grant support were handled in the way we handle all such applications at One North East, professionally and with the necessary due diligence.
“It is worth bearing in mind at the time, Garlands Call Centres was a high growth business, employing many hundreds of people across the North East and contributing to the growth of the regional economy.
“We estimate that the South Shields business alone generated £3.5m for the regional economy from salaries paid.
“As a regional development agency, we are very much in the business of creating the conditions for economic growth against a background of probity and due diligence.”
Garlands, which employed around 650 staff at iots headquarters in Hartlepool, received its first lump sum of £200,000 from One North East on May 12, 2008, after the creation of 134 jobs.
A further £300,000 was paid on March 25 the following year after 161 new posts were created.
One North East is now trying to claw back around £410,000 of that money due to conditions that were not met by Garlands.
The former Garlands employees who took the company to the tribunal were hit in the pocket due to the company being in administration at the time they were dismissed.
The hearing judge – who ruled the company had “completely failed” in its duty to consult staff over job losses – awarded each worker £3,000 for 90 days back pay.
But due to the firm being in the hands of administrators Pricewaterhouse Coopers, staff could only claim from Government funds for a maximum of 56 days unpaid wages.
Middlesbrough-born founder and managing director Ms Garland launched the company in an attic room in Albert Road, Middlesbrough, in 1981.
Over the next 30 years she built Garlands into one of the most successful companies on Teesside, employing 3,500 at its height.
Its closure affected staff in Hartlepool, Middlesbrough and Sunderland, and followed the loss of three major contracts with mobile phone giants Vodafone, Talk Talk and Orange, which all withdrew contracts within the space of a month, tipping the company into meltdown.
Shocked staff were told the news over the company’s internal radio by Ms Garland.
l Are you a former Garlands employee? Have you found it difficult to find work since the company closed? Contact the newsdesk on (01429) 239381.