More than 2,000 jobs are at risk as ISG, which is among the UK’s largest construction contractors, fell into administration.
Administrator EY confirmed on Friday that ISG had ceased trading with immediate effect, with the closure of all of its sites. It is considered the largest collapse of a UK construction company since Carillion in 2018, which owed suppliers £7bn.
EY said that most of the 2,400 people ISG employs across the UK would be made redundant with immediate effect.
The company’s collapse puts tens of government projects at risk: ISG is part of 69 live central government schemes. Among the most important are 22 construction projects that are part of the Ministry of Justice’s plan to increase the capacity in the UK’s prisons by an extra 20,000 spaces. The firm is also involved in school-building schemes.
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Only 200 employees will be retained to assist administrators.
ISG is the sixth biggest construction contractor in the UK by turnover, with revenues of £2.2bn.
Construction analyst Barbour ABI has estimated that ISG is involved in £1.8bn worth of live government construction projects.
In an email to staff on Thursday, first reported by Construction Enquirer, ISG chief executive Zoe Price said the group’s cashflow was affected by large loss-making contracts secured between 2018 and 2020.
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.”
As well as the closure of its offices and construction sites, subcontractors have been stood down from their work.
Reports earlier in the year suggested the firm was experiencing cashflow problems. Efforts to refinance and sell the firm had failed, said the administrator.
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