Rebuilding and extension projects at several schools have come to an abrupt halt after ISG, one of the country’s largest construction companies, went into administration.
ISG Construction Limited and seven other companies in the ISG Group entered administration on Friday. About 2,200 workers were made redundant and operations ceased immediately.
ISG is reportedly the sixth largest construction firm in the UK by turnover.
ISG is understood to have had contracts for dozens of government projects worth more than £1 billion, including schools.
Schools Week identified at least 14 contracts worth almost £60 million awarded by the Department for Education since 2022.
It also won work through multi-billion pound construction frameworks, which involve awarding multiple projects at once, such as those in the school rebuilding programme.
‘How long will we be in this position for?’
A council-funded £22 million delayed rebuild at Woodlands Meed, an all-through special school in West Sussex, had just entered its second phase when headteacher Adam Rowland learned of the company’s collapse.
The first phase – a new school on its former playing field – is complete, so the pupils are in their new facilities. But the school is next to a building site, where its former buildings are due to be demolished to make room for car parking and a new sports pitch.
“What can I do? It’s just frustrating,” Rowland told Schools Week. “It’s not ideal, working next door to a building site.
“We’ve been a year delayed, but this is going to further delay stage two. The difficult thing is the uncertainty of it. How long are we going to have to be in this position for?”
What happens next is in the hands of the administrators, but Rowland has been told it could be weeks before he will receive an update.
The company’s collapse has also halted a £7.5 million extension at Millbay Academy in Plymouth, which will house 10 classrooms, a new reception area, staffroom and prep area.
Existing space is also being remodelled to create new classrooms, science labs and design and technology workshops.
A spokesperson said the company’s collapse was “hugely disappointing news and we have been in close contact with the Department for Education, which is funding the works, to plan next steps.
“We are confident the works will be completed as they were only a few months away from being finished.”
Contingency plans
Construction also halted at Hempland Primary School in York, part of the Pathfinder Multi-Academy Trust.
The trust said its “thoughts go out to the staff who were employed on our project. The team had very much become a part of our school community during their time on site.”
Devon Live reported that ISG’s collapse had also stopped work on Matford Brook Academy, a new all-through school in Exeter.
The school was already delayed – it was due to open last September – with pupils still in temporary buildings.
The government said “detailed contingency plans” have been enacted, with staff “working to ensure sites are safe and secure”.
It has “robust contingency plans in place to mitigate any impact on the school estate” and is working to “find alternative ways to deliver these projects where necessary”.
All the schools continue to deliver face-to-face education. The DfE is also “working to minimise additional costs and will pursue all forms of redress”.
Latest firm to collapse
Construction companies accounted for nearly one in six of all insolvencies in England and Wales in July, figures show – and are nearly 36 per cent higher in the year to July than in 2019.
Construction giant Carillion went into administration almost seven years ago. The government was also forced last year to order the demolition and rebuild of three new schools built by Caledonian Modular, at a cost of £45 million.
That company had also collapsed.
The buildings could not withstand “very high winds or significant snowfall”. The DfE is seeking legal advice on recovering costs.
Zoe Price, the chief executive of ISG, has blamed the collapse on loss-making contracts it signed before the Covid pandemic.
The DfE defended its “robust procurement process”.
