How collapse of building firm left Labour's plans for schools and jails in tatters

Dozens of schools and prisons around England and Wales face higher bills and delays to new buildings worth billions of pounds after the collapse of one of the UK's biggest contractors. ISG, the sixth-biggest builder in the UK, collapsed in September, leaving 2,200 workers immediately redundant and many subcontractors out of pocket. At least one firm working for ISG has gone under.

- HOWARD MUSTOE

Its contracts included schools from Exeter to London, as well as four new prisons and prison upgrades from Dorset to Liverpool. The collapse could not have come at a worse time, as the government aims to solve the prison overcrowding crisis and ramp up school-building to combat the concrete crisis.

On top of that, industry insiders say it suggests no lessons have been learned since the collapse of Carillion, another massive builder. Builders are still under-bidding in an effort to grow, and expect their suppliers to shoulder the burden. Also affected are the company’s suppliers: it collapsed owing £981m to creditors including suppliers, according to the Sunday Times.

ISG had about £2.5bn of work in progress at 57 sites, with £1.7bn of work in the pipeline, including £518m of work with the Ministry of Defence, according to Tussell, which analyses government contracts. It was also contracted to build four prisons for about £300m and about a dozen schools for about £1.2bn of government contracts.

One of its contracts was to build a new school for The Bishop’s Stortford High School, a local authority senior school in Hertfordshire with 1,250 pupils. Headmaster Dale Reeve said he only received a tip-off of the collapse the day before the news broke, when ISG workers were finishing their last day’s work on the site.

The aftermath has been “hugely stressful”, he said. The school is more than 80 per cent complete, but he is still waiting to be able to use the sports hall and much of the car park.

“ISG left a number of subcontractors unpaid, which is making it hard for us to find people to complete the project,” he said. The local authority is overseeing the project, meaning money is not a direct worry for him, but he does not know when the school will be finished.