BESA Responds to ISG Collapse 

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24 September 2024

The Building Engineering Services Association has been advising members affected by cash flow problems due to unpaid invoices for work on ISG contracts.

It’s estimated that ISG has unfinished projects worth £1.7 billion, including the £150 million fit-out of Google’s new headquarters building at King’s Cross. The company fell into administration on Thursday 19 September and 2,200 workers have been made redundant,

BESA’s Legal & Commercial Director Debbie Petford has been contacting affected members to assist with payment issues, contract management, business protection, mediation, and debts.

“We are aware that several members are directly affected by this news, and we want you to know that BESA has your back,” said Debbie. “Members have instant access to our dedicated legal & commercial expert team who are always available to help with any concerns or queries regarding contracts or payments – and any contact with us is strictly confidential.”

BESA has also created an ISG Insolvency Information Sheet which explains the administration process to members in more detail, and covers unsecured debt and sub-contractors’ legal obligations.

UK Supply Chains Undermined

BESA CEO David Frise said “Sadly, the lessons of Carillion have not been learned and our members and hundreds of other sub-contractors are left to pick up the pieces yet again. Profit margins in construction are wafer thin and the fragile basis of many contracts means SMEs are particularly exposed.

“Suppliers will feel hugely betrayed, and we know that many were lied to about the status of the business following the sudden departure of senior directors back in February. Several excellent, financially sound firms could go under with significant job losses through no fault of their own because of this.”

“The collapse of ISG came just two weeks after the publication of the Grenfell Tower public inquiry report which highlighted the dysfunctional nature of many construction contracts. People’s safety and wellbeing, along with economic growth depend on a robust, well-financed construction sector, which we manifestly do not have.

“The building engineering industry consists of impressive companies run by expert people who want to do a good job, but they are often hampered by a broken contractual process that leaves them scrambling around for money just to keep projects and their companies alive.

“ISG needs to be construction’s last major financial collapse that threatens entire supply chains, and the government must help us put a more robust and fit for purpose industry in place.”

Picture: a photograph of David Frise. Image Credit: BESA

Article written by Ella Tansley | Published 24 September 2024

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