A CASH-STRAPPED construction firm in North Yorkshire has made staff redundant - only days after saying all jobs were safe.

Malton-based S Harrison Group, which last week announced losses of £1.9 million, has handed scaffolders their notice.

Announcing its financial results, the firm said none of the company's 60 employees would lose their jobs.

But three staff in the company's scaffolding department have been made redundant.

The firm today denied the job losses were as a result of the financial losses, but instead said business was booming so much that it needed to outsource its scaffolding work.

But one of the departing employees said he had heard there was a shortage of work. He said he was given his notice in mid-October, and added: "They said it was due to a lack of work. They said there was not much work until March or April.

"Morale is a bit low where I am working. I'm in the scaffolding department; there's six of us there and three of us are going.

A spokeswoman for Harrison said: "The information filed recently at Companies House relates to the 12 months ended December, 2005. We have indicated that, for a variety of reasons, it was not a good year financially for the group.

"Since then, in every respect, the business has gone from strength to strength. Throughout, we have maintained a solid balance sheet, and we now have the best ever forward order book and continue actively recruiting for quality staff in a number of key areas of the business.

"Regrettably, the changing nature of the contracts in which we are involved has led to a handful of job losses amongst our in-house scaffolding team. The fact is that we are simply not geared up internally to handle the large-scale scaffolding jobs in which the construction team is currently involved.

"As a result, we have taken the decision to outsource this element of our business. This is simply a reflection of the growth on the business, but we very much regret the personal impact that this has on those directly affected by the change."

Announcing the losses last week, which followed a record £3.2 million profit the previous year, firm chairman Martyn Harrison said the slump had been due to the company's expansion into South Yorkshire, and said the future was bright.