£3 million of public money was written off to save jobs at Fife firm Havelock International last summer.
Scottish Enterprise provided the loan to the former Havelock Europa in March 2018 but to assist with the sale of the company to turnaround specialists Rcapital, a deal was reached to write off that sum and help retain the workforce in July last year.
Debts, said to be in the region of £30 million, were also effectively left behind in Havelock Europa when the Kirkcaldy-based firm was sold through a pre-pack administration to Havelock International – an entity created by Rcapital.
Despite last summer’s rescue, Havelock collapsed into administration this week with the loss of 247 jobs.
As questions circulated over the business’ past dealing, politicians claimed the first priority is the dismissed workers.
Business minister Jamie Hepburn said the Scottish Government is providing support to all of the workers through the Partnership Action for Continuing Employment (PACE) initiative to minimise the time people are out of work.
He said: “Our immediate priority is the staff at Havelock International Ltd and we will do all we can to support them, their families and the wider community at this difficult time.
“Scottish Enterprise and partners had been working closely with Havelock International Ltd to explore all possible options but unfortunately a positive solution could not be found to turn the company’s situation around.
“Scottish Enterprise will continue to work with all those involved to understand the potential options for the company going forward and explore all possibilities to help those workers who have been made redundant to secure alternative employment as quickly as possible.”
Kirkcaldy Labour MP Lesley Laird described the turn of events as “hugely disappointing” for workers and families, adding the key priority must be to ensure workers are paid for the work already done.
She said: “Once it’s understood what money is owed to the business it’s important to secure a buyer for the site and rescue the jobs.
“There is justifiable anger about the speed of these events unfolding. It is very hard to try and resolve a situation like this when it is all done at the 11th hour.
“A significant payment was due for work on the AECC and I believe that further pressure could have been applied in order to reach a resolution to pay the workforce had earlier notification been provided.
“Now we’re at the stage we are, it’s all about working out what money is due, what support is available to employees, and how quickly a buyer can be found.
“Havelock has a long, proud tradition and a highly skilled workforce and we cannot afford to simply just throw these jobs away.
“The employees have a great attitude and that work ethic and culture really needs to remain intact.
“I will continue to work with all parties to ensure that all options are being explored.”
Scottish Liberal Democrat leader and North East Fife MSP Willie Rennie said it was a “harsh blow”.
“For workers who have given a lifetime’s service this is the worst thing that could happen,” he added.
“I hope that the Scottish Government will now work with unions and the firm to ensure that knowledge and skills are not lost.
“The Government also need to ensure that large firms are paying up on time and not exploiting smaller contractors.”