ISG was the construction company behind the refurbishment of HMP Liverpool’s B-Wing
Thousands of people have lost their jobs after a major UK construction company collapsed. ISG has been involved in numerous government projects, including the refurbishment of HMP Liverpool’s B-Wing, and entered administration earlier in the week.
It led to the redundancy of most of its 2,400 UK employees. The firm ceased trading immediately after appointing joint administrators from EY, who confirmed that efforts to find a buyer were unsuccessful.
The London-headquartered company will retain around 200 staff temporarily to help with winding down operations. ISG’s portfolio includes 69 central government projects worth over £1 billion, as per data from Barbour ABI.
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ISG completed the refurbishment of HMP Liverpool’s B-Wing in January 2019. The company delivered lighting, sanitary ware, electrical and flooring upgrades, as well as replacing 215 windows and doors across the 90 cells, wing offices, servery and staff refresh areas.
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Cells were fully redecorated and fitted with new privacy doors, accessible socket points, larger uPVC windows, resin sanitary ware in the bathrooms and refurbished beds. In the communal areas, ISG installed anti-tamper mains electricity boxes and vinyl flooring, as well as carrying out the full redecoration of walls, gates and ceilings.
In an email sent to staff on Thursday, ISG chief executive Zoe Price said: “Some of you may have seen reports in the media that ISG has filed for administration here in the UK. With sadness, I can confirm that this is factually correct. This was not the way I wanted you to find out and the news should not have leaked in this way.”
Credit: Liverpool Echo(Image: Liverpool Echo)
Ms Price promised staff they would be paid on Monday, as normal, and said the current situation was the result of “legacy issues relating to the large loss-making contracts secured in between 2018 and 2020”, reports the Manchester Evening News.
She added: “Trading out these projects has had a significant effect on our liquidity. So even though we have been profitable this year, our legacy has led us to a point where we have been unable to continue trading.”
Ms Price said “significant efforts” had been made to find a buyer for the ISG but that they had been unsuccessful. EY has also said that ISG had been trying to find a buyer but failed to secure a suitable rescue deal.
It added a potential buyer “could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent. Due to current market conditions, an alternative sale or additional funding could not be secured.”
London-based ISG employs about 2,400 people across its UK business, the majority of whom will be made redundant with immediate effect. Around 200 employees will initially be kept on to assist the administrators in winding down the business. ISG is involved in 69 central government projects totalling more than £1 billion, including work on prisons for the Ministry of Justice, data analysts Barbour ABI said.
This incorporates 22 projects for the Ministry of Justice, including a £300 million extension to the Grendon and Springhill prisons in Buckinghamshire, and £155 million worth of work to expand three prisons in other locations, the data showed. ISG has worked on other large projects including building and refurbishment of prisons, police and fire stations, schools and offices.
A spokesperson for the Government said: “We have implemented our detailed contingency plans and affected departments are working to ensure sites are safe and secure.”