AN ENGINEER that was recently pledged £3.5m from the Government’s key job creation fund has gone into administration, with the loss of 90 positions.

The collapse of trailer makers Tinsley Special Products based in Eaglescliffe, near Stockton, comes a few months after the firm announced plans to create almost 100 jobs as part of a five year growth plan.

Allan Kelly, joint administrator and partner in Baker Tilly’s North East region, said: “Tinsley Special Products Limited has suffered from a downturn in trade which has impacted on profit and cash flow. Unfortunately the contract position and financial requirements of the company left us with little option but to cease trading shortly after appointment.

“We are in the process of realising the assets and quantifying the liabilities of the company to ascertain if a distribution can be made to creditors.

“Additionally, our specialist employment team are assisting the employees in making the relevant claims for any outstanding wage arrears, holiday pay and other claims from the Redundancy Payments Service.”

Earlier this year, Tinsley bought County Durham’s Tanfield Engineering Systems Limited out of administration and acquired Marshall Aerospace and Defence Group’s Mildenhall operations in Suffolk.

Administrators confirmed 90 redundancies across the firm’s North-East and Suffolk operations.

In April, Tinsley announced that it would use £3.5m from the Regional Growth Fund (RGF) to buy land and build a factory in Peterlee, east Durham as it looked to expand its presence in the industrial trailer market.

The company had been a regular winner in the RGF, which was set up by the Coalition to use taxpayers’ money as a means of creating jobs in hard hit areas.

The RGF has come under fire for backing the wrong projects and for being slow to hand over cash. In 2012 Deputy Prime Minister used a visit to Tinsley, when he handed the firm £1.9m of funding, to defend the RGF from critics.

Mr Clegg said at the time: "There have been some really cynical attempts to undermine what is a highly successful programme that's helping to support hundreds of thousands of jobs across the country.

"Too many of the criticisms have sought to discredit something that is helping to create tens of thousands of jobs in the North-East."