ISG collapse 'devastating' for construction industry

The recent collapse of ISG, a major player in the construction industry, has been described as 'devastating' for the sector. Suzannah Nichol, the chief executive of Build UK, expressed her concerns during an interview on the BBC’s Today programme. She highlighted that many smaller companies in the supply chain are now at risk of not receiving payments, which could jeopardize their future. The news has left workers and suppliers feeling 'shocked' and 'demoralised. ' ISG, which held over £1 billion in government contracts, fell into administration last week, raising alarms across the industry. Liam Byrne, chair of the Business Committee, voiced his deep concern regarding the situation. As the sixth largest construction firm in the UK, ISG generated approximately £2. 2 billion in revenue and has been involved in significant projects, including the velodrome for the 2012 London Olympics. Despite its past successes, the company had been facing financial difficulties for several months, and efforts to secure a rescue deal ultimately failed. nnNeil Hallsworth, a project manager who has been with ISG for over 15 years, shared his feelings of devastation upon learning about his job loss. He described himself as 'gutted' and 'raw' after the announcement. Hallsworth mentioned that there were rumors about ISG's troubles, but it wasn't until Friday afternoon that employees were informed of the layoffs and the lack of funds. He expressed his disappointment, stating, 'It’s absolutely demoralising. I feel extremely let down. ' Many contractors are owed substantial amounts of money, which adds to the distress of the situation. Paul Margan, who operates a small family business, is particularly worried as he recently completed an order worth over £20,000 for ISG. He described the news of ISG's administration as 'shocking' and expressed his disappointment, suggesting that the government should implement stricter regulations regarding when companies can continue to operate. nnAnother supplier, who chose to remain anonymous, revealed that they are owed hundreds of thousands of pounds and that ISG's collapse will significantly impact their business. They are aware of other contractors who are owed over £1 million and fear that some of them may not survive this crisis. The supplier noted that the repercussions of ISG's downfall will resonate throughout the industry, but they also believe that due to the existing labor shortages, most of ISG's employees will likely find new opportunities. In an email sent to staff, ISG's chief executive Zoe Price explained that the current situation stemmed from 'legacy issues' related to 'large loss-making contracts' that were secured between 2018 and 2020. According to data analysts Barbour ABI, ISG was involved in 69 government projects, including significant work for the Ministry of Justice. The Ministry has stated that they have 'robust contingency plans' in place to address the impact of ISG's collapse and will seek alternative methods to continue these projects where necessary.