ISG: Government Forced to Activate Contingency Plans

ISG had £1bn-plus pipeline of work for MoJ and other projects for DfE and DWP

Government departments have been forced to activate contingency plans for the delivery of new prison places and schools after one of the nation’s largest construction companies fell into administration.

ISG reportedly held around 69 government contracts with a value of at least £1.84bn, the bulk of that work was for the Ministry of Justice. One project – the £300m expansion of HMP Grendon Springhill in Buckinghamshire – was given the go-ahead in January this year.

ISG’s collapse resulted in more than 2,000 job losses at the firm. It comes six years and eight months after construction and outsourcing giant Carillion went bust, creating an immediate crisis for the MoJ because of the firm’s facilities-management contracts for some prisons. Delivery of two new NHS hospitals was also severely delayed as a result. The £750m Midlands Metropolitan University Hospital in Smethwick, near Birmingham, is due to open to the public next month – six years later than originally expected.

ISG is understood to have had at least 22 contracts with the MoJ, and work on the government’s prison-building programme was one of its biggest sources of income. The timing of the firm’s collapse, just days after the new government’s early-release rules to ease overcrowding pressures at the nation’s jails came into effect, will be a further obstacle to increasing capacity in the secure estate.

Source: Civil Service World