Calls have been made for the Government to reconsider its decision to reject a private bid to save Sheffield’s Remploy factory from closure.
The site on Brightside Lane is set to close with the loss of 80 jobs after the failure of one private sector bid and rejection of a second.
Negotiations with Barnsley-based school furniture manufacturer Metalliform failed to reach agreement.
And a request to take over the factory by Cloughtons, from East Yorkshire, was rejected because it required public subsidy for the first few years.
Cloughtons said the subsidy would be lower than the cost of unemployment benefits for the Remploy site’s staff if they were unable to find jobs.
Sheffield South East MP Clive Betts has written to Work and Pensions Minister Esther McVey.
He said: “The Government seems determined to close the Remploy factory in Sheffield at considerable cost to the economy and to the lives of employees.
“Yet there may be opportunities for renewing the furniture production capacities and providing continuing employment for many existing employees at much less cost.”
In his letter to Ms McVey, Mr Betts said Cloughtons have been told the only bids being considered are those which involve absolutely no financial assistance - despite the factory currently losing £650,000 a month.
Mr Betts said: “This is ridiculous. Currently Remploy is being significantly subsidised. If the factory closes, there will be huge redundancy costs. Further, there is every likelihood that many of those employees will never work again.
“The potential investor is clear that he believes that the factory can be made economically viable, but that there would need to be transitional financial support to achieve this.
“I have asked the minister to clarify the position and to ensure that proper consideration is given to proposals which could deliver lower costs to the taxpayer and infinitely better outcomes for the employees and the local economy.”
Cloughtons said it could take up to three years to make the factory profitable.