A social enterprise praised by the Prime Minister has made 16 people redundant after losing a major backer and failing to access funds through the Government’s Work Programme.
The community interest company has closed its catering operations in Manchester and Sunderland to focus on its restaurant, cafe and training business in Yorkshire.
Led by chief executive Sarah Dunwell, Create has won national acclaim for helping society’s most vulnerable people to find secure jobs and homes.
But when its main supporter, a high-net worth individual, had a change in personal circumstances, he stopped his monthly cash injections, causing cash-flow problems at the company, it is understood.
The board decided to concentrate on core activities and restructure the business, resulting in five redundancies in Leeds, four in Sunderland and seven in Manchester.
Chairman Norman Pickavance said Create has tried to tap into public funds by helping people back into work via the Government’s much-maligned Work Programme, but as a small company it was unable to manage the bureaucratic process.
He said Create also launched a tax-efficient Enterprise Investment Scheme to encourage Yorkshire philanthropists to support the company, but the response has so far been limited.
“We have had to make some tough decisions,” he said, adding that the business is on “a knife edge”.
Leeds and Wakefield councils have together provided around £150,000 in public funds to the £1 million-turnover not-for-profit company, added Mr Pickavance.
Ms Dunwell said: “West Yorkshire has always been our home and whilst we’re sad to have had to contract our business, we’re proud to still be delivering great food and great social impact here in Leeds and Wakefield.
“Readers don’t need to do much to support our work, they can assist us in offering a hand up, not a hand out, just by choosing Create when they want to eat out, particularly in the quietest months after Christmas.”