ISG collapse forces contractor search for major projects

Coventry and Birmingham City Council are back on the hunt for contractors to deliver key cultural schemes following the collapse of ISG.

ISG had been appointed to major works across the West Midlands but all work has since ceased on the group’s UK contracts. Administrators have discovered more than £190m in losses for its supply chain a month after the construction giant entered administration.

Credit: ISG

In March 2023, ISG was awarded its largest refurbishment project to date by the Ministry of Justice. The £61m refurbish of 300 single-person cells at HMP Birmingham – a Category B men’s prison in Winson Green would bring the cells back into use.

The deal formed part of the MoJ’s wider £3.8bn estate modernisation programme, which will see the creation of 20,000 new prison places across the UK. It also was one of four partners on the MoJ’s £1bn New Prisons Programme Alliance, with firms working together to deliver four new adult male prisons across the UK.

A Ministry of Justice spokesperson said: “We have robust contingency plans in place to mitigate the impact on our prison and court estate of ISG going into administration.

“We are working with administrators and will find alternative ways to deliver these projects where necessary.”

ISG had secured the contract to repurpose the former Coventry IKEA building into a cultural hub after a £44m bid.

Set to be known as the City Centre Cultural Gateway (CCCG), the site was being transformed to provide a new home for nationally recognised collections, managed by Arts Council England, Arts Council Collection and the British Council and include a space for new research facilities.

The 280,000 sq ft building, which has seven floors as well as on-site parking, was being delivered in three phases.

A spokesperson for Coventry City Council told TheBusinessDesk.com: “We understand ISG Construction has applied to enter administration, and we have contacted partners involved in our project as we consider our next steps.

“We have been contacted by numerous contractors about the project and are in constructive dialogue with several of these. We will be keeping all options open at this stage before a final decision is made.”

Another key cultural project ISG had secured a contract to deliver, was the phase 1 building works to restore and redevelop one the oldest of six Grade II* Listed swimming baths in the UK.

Moseley Road Baths and Balsall Heath Library were set to undergo a £32.7m transformation to safeguard the future of the listed buildings.

Both faced closure for many years but local campaigners have fought to keep the facilities open. ‘Friends of Moseley Road Baths’ secured the interest of the World Monuments Fund, which included the Baths on the 2016 World Monuments Watch to call attention to the planned closure.

After a coalition formed between Birmingham City Council, Moseley Road Baths CIO, Historic England, World Monuments Fund, National Trust, and the Friends of Moseley Road Baths, it has since successfully bid for £15.6m funding from the UK government and in 2022 received £477K in a Development Phase grant from the National Lottery Heritage Fund.

A spokesperson for Birmingham City Council told TheBusinessDesk.com: “The council will continue to work with the receiver over the coming weeks in relation to the redevelopment of Moseley Road Baths and Balsall Heath Library. In addition, due diligence on options associated with the appointment of a new contractor to complete the scheme are continuing.”