ISG administration, October support update

1 Update from October, 2024
2 Build UK FAQs
3 The fall of a construction giant
4 Architectural technology
5 Electrical contractors
6 Related articles on Designing Buildings

[edit] Update from October, 2024

EY Administrators responsible for the ISG Administrations announced a list of the 'companies' affected as described here, it also has made available a number of Frequently Asked Questions available for customers, suppliers and contractors and employees available.

ISG Central Services Limited	ISG Retail Limited
ISG Interior Services Group UK Limited	ISG Construction Limited
ISG Fit Out Limited	ISG Jackson Limited
ISG Engineering Services Limited
ISG UK Retail Limited	(all in Administration) (together “the Companies”)

On 8 October, 2024 the Construction Enquirer reported that 'In letters to trade creditors, administrator EY confirmed that no further work would be carried out during the administration on existing contracts, including projects for Construction, Fit Out and Engineering services businesses. It said: “The companies are being wound down under our supervision while we conduct an investigation of their financial affairs....At present, it is not anticipated that there will be any funds available for a distribution to creditors.”

[edit] Build UK FAQs

On 2 October CLC announced its endorsement of the Build UK Document to Support Organisations in the ISG Supply Chain. Its said "Following the collapse of ISG last month, Build UK, with the support of Wedlake Bell LLP, has published a series of Frequently Asked Questions (FAQs) to support organisations in the supply chain that may be affected. The guidance, which is endorsed by the CLC, includes the details of ISG’s administration, what to do if you are owed payment or need access to site, and potential next steps including novation of your contract." the document "ISG Administration Frequently Asked Questions (FAQs)" can be downloaded here and contains answers to a number of questions:

What has happened?
What is an administration?
Am I affected?
Will I get paid?
Might I be paid by the ultimate employer or funder? ....
What should I do now?
What do I do if I attend site and am not allowed access?.
I have materials, equipment or tools on site; what do I do?...
How do I register my claim?
What is a novation?
What do I do if my business is now in financial difficulties? ...

[edit] The fall of a construction giant

Another giant of construction falls to the tsunami of insolvencies. Thanks to CPA data below, provided and reported on by ECA, 4,373 construction firms went out of business in the UK in the year to July 2024, which is 4.0% higher than a year earlier.

The Electrical Contractors Associated reported in their article 'ISG administration: are you affected?", dated September 20, 2024 that ISG Construction Limited, ISG Engineering Services Limited, ISG Retail Limited, ISG Jackson Limited and ISG Central Services Limited had all filed for administration and advised that If another part of ISG is not in administration, ECA Members may wish to take evasive action to kerb their exposure. The parent company, ISG Limited, has, so far, not applied to the court for insolvency (see updated list above and check ISG Administrations with EY Administrators for changes).

The knock on effect of this insolvency is significant for a wide variety on industry workers, below are two industry responses to the news, offering guidance, but there are more. If you know of organisations offering advice, feel free to add to this article.

[edit] Architectural technology

Alex Ramsden, CEO and founder of BuildMyTalent, has created a community to help the 2,200 jobs likely to be lost by the collapse of ISG. The Chartered Institute of Architectural technicians (CIAT) understand that a number of architectural technologists are amongst those that have lost their jobs. The support available works as follows:

[edit] For ISG employees

WhatsApp community for ISG employees to find their next roles, talk to talent acquisition teams and to support each other through the coming days and weeks. There are now over 300 people within the community since launching. Email Alex at [email protected] for the invite link.
CV matching service. 4 stages to this:
- Step 1 - Send your CV to [email protected]
- Step 2 - BuildMyTalent will come back with a list of companies they'd like to forward it onto.
- Step 3 - You give your permission to share the CV to these companies.
- Step 4 - BuildMyTalent will follow up with you in a week's time with a further call/discussion to see if their help is still required.
Job title matrix – BuildMyTalent are working with a growing number of companies who have shared a list of job titles that they are looking to recruit. You can use the spread sheet to see which roles are currently open for application across different companies.

[edit] Companies hiring (all support is free)

Access to the WhatsApp community – there is a designated group for sharing company information, as well as a group where ISG employees are sharing their details and experience for companies to reach out to them directly.
Matrix/CV matching - Please tell BuildMyTalent which job titles you're currently hiring for so that you can be added to the matrix. They will also need to know where to send CV's to. If you'd like to be on the list, please email [email protected]

[edit] Support organisations such as institutes, charities and other organisations

Please offer your support via the WhatsApp organisation. Message Alex on Linkedin or email [email protected] for access.

For ATs within ISG, you can also contact Joe Oxtoby at Hays for further information, support and advice: [email protected]

This section of the article appears on the CIAT news and blogsite as "Platform of support for ISG employees and companies", dated September 26, 2024.

[edit] Electrical contractors

ECA Director of Legal and Business Rob Driscoll shares advice to ECA Members who may be exposed to risk following this news.

ECA understands has gave advice as follows.

[edit] Immediate action should include:

If you are able to access site, use photographic, video and written records of your work in progress.
Ensure records are up to date.
If you have access to sites, recover plant, tools and unfixed materials which you have title to and have not yet been paid for.
Maintain contact with ISG representatives.
Establish contact and claim for unpaid works with the appointed administrator.

Records will be invaluable in establishing the value of your “final account” and can be used for any negotiations with any main contractor who is brought in to complete the contract.

[edit] Administration is not liquidation

The situation is not yet terminal. Existing contracts may have termination on insolvency provisions or may simply give the right for you to choose to terminate on ISG’s insolvency following a prescriptive procedure.

You do not yet know if the end-client will terminate or allow these entities to continue to deliver under the administration process. In which case, the administrators may attempt to offer sub-contractors an opportunity to complete.

[edit] Consider if you have the right to terminate

Consider any obligations you may have under novation clauses or collateral warranty step-in clauses to continue working for new main contractors and refresh yourself on the issue of if those obligations are subject to you getting paid what you are owed.

You should prepare a schedule that shows a record of all outstanding payments including retentions and when these payments were due, if they are unpaid.

For materials that are required for the contract but have not been delivered to the site then make careful note of these and further advice will be provided in due course as matters unfold. You should avoid at all costs any damage to your completed works.

If offers come in to complete the works under new contracts, check they are not more onerous than your existing contracts and negotiate to recover some of the losses within the price to complete.

Do due diligence on new parties and seek to improve your cash-flow exposure
Shorter; application, due date, final date, payment cycles.
Advanced payment for materials.
Performance bond from any party who is not financially robust enough and seeks to step into ISG’s shoes and engage you.
No retentions.

There is value to the end-client in completing with the original sub-contractors in order to maintain an uninterrupted duty of care, warranty and insurance, even if the client has to pay a premium for the privilege and there is commercial value in keeping resources engaged provided you are able to get paid.