ISG collapses into administration, 2,200 jobs lost

UK construction giant ISG Limited has collapsed into administration, leading to the immediate loss of 2,200 jobs.

The company - ISG Construction Limited, ISG Engineering Services Limited, ISG Retail Limited, ISG UK Retail Limited, ISG Jackson Limited and ISG Central Services Limited - is involved in major government projects such as prison expansions, and was struggling with liquidity issues stemming from loss-making contracts between 2018 and 2020, despite being profitable this year.

In an email to staff, ISG chief executive Zoe Price confirmed the collapse, saying, "This was not the way I wanted you to find out and the news should not have leaked in this way." She explained that efforts to secure a buyer had failed, and the company's "legacy issues" made it impossible to continue trading.

Administrators EY confirmed on Friday that ISG’s eight UK divisions had ceased trading. The construction group employs 2,400 people in the UK. Data from construction analyst Barbour ABI estimates ISG is involved in live government construction projects worth £1.8bn. These include 22 live projects with the Ministry of Justice, including a number of prison schemes such as the £300m extension to Spring Hill, in Buckinghamshire. ISG, owned by the US firm Cathexis, also had private sector clients such as Apple, Google, and Barclays.

The collapse has raised concerns for subcontractors and clients, with EY confirming that no potential buyers could demonstrate adequate funding to save the business.

Ed Griffiths, chief analyst at Barbour ABI, highlighted the wider impact, stating, "The ripple effect will be extremely worrying for the hundreds of subcontractors involved." However, the government has implemented contingency plans to ensure sites remain safe and secure.

ISG is the sixth biggest construction contractor in the UK by turnover, with revenues of £2.2 billion. In 2018, Carillion, the UK’s second-biggest contractor, collapsed owing suppliers £7 billion.