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North East charities and other organisations 'owed more than £400,000' after government contractor's collapse

The company was subcontracting the work to a number of providers Credit: Working Links

A group of charities and other organisations in the North East say they are owed more than £400,000 after a government contractor collapsed.

Working Links was based in Middlesbrough, and was contracted by the Department for Work and Pensions to oversee the 'Links to Work' programme in our region, supporting people who have various challenges into long-term employment.

The company was subcontracting the work to a number of providers, who were paid according to the number of people they had successfully helped.

However, it went into administration in February, leaving bills which are still unpaid.

Amounts owed:

  • Groundwork NE & Cumbria - a charity focused on helping disadvantaged communities: £127,000
  • Northern Rights - a social enterprise supporting people with health problems and disabilities: £115,000
  • Changing Lives - a charity helping vulnerable people: £27,000
  • Gateshead Council - whose commercial arm takes on such contracts: £150,000* - this figure has not been confirmed by the council
  • Total: £419,000

These losses will be recorded in the charities' accounts moving forward, and that then puts into question their ongoing financial viability, in the eyes of future contracts and possibly grants as well.

It will be much harder for them, they'll have to explain this situation.

And why should they? It's not their fault.

– Carol Botten - Voluntary Organisations' Network North East

Working Links' collapse was caused by the failure of its contracts to provide probation services in Wales and the South West.

The Ministry of Justice has decided it will compensate subcontractors who have incurred losses there.

The Labour MP for Easington, Grahame Morris, says it is "an inconsistency" that the Department for Work and Pensions has not chosen to do the same for organisations affected in our region.

Providers affected by the administration of Working Links have been advised to get in touch with administrator Turpin Barker Armstrong if they are owed any monies.

We continue to work with the administrator to minimise the impact on the organisations involved.

– Department for Work and Pensions spokesperson

The administrators, Turpin Barker Armstrong, have told us they cannot comment while the insolvency process is ongoing.

One subcontractor, Finchale Group, told us it is "in a very fortunate position that it will recover all monies outstanding."