ICSM Construction Insolvency Business: Prison contractor goes bust leaving 40 suppliers with debts of £20m
By Harry Mottram: Ministry of Justice (MoJ) are on the hook for millions of pounds after the lead contractor ISG entered administration in September owing cash to around 40 support businesses. The money is for work on prisons across the country which the suppliers thought was ring-fenced in Project Bank Accounts (PBAs) – something introduced after the collapse of Carillion in 2018 that led to scores of companies going bust when they were not paid despite having done the work for building outfit Carillion.
A number of firms have claimed the MOJ are liable for paying invoices which amount to around £20m for work that included prisons at HMP Liverpool and HMP Guys March in Dorset. The BBC have reported on European Screeding, based in Lancashire, that was currently owed for a month's work, worth about £130,000 and Leicester based Raven Project Metals who were still owed nearly £185,000 for about two months of work, having expected to make £75,000 in gross profit from the entire job.
Ian Carrotte of ICSM said they understood the MOJ would not comment on the situation due to the possible legal action. The BBC reported the EY-Parthenon's spokesperson as saying: "Joint administrators were appointed by the High Court of Justice to eight companies within the ISG Group on 20 September 2024. The administrators are officers of the court and act in the interests of all creditors of the companies. The Project Bank Accounts (PBAs) had nominal funds in them when administrators were appointed and claims that funds were diverted into ISG's insolvency estate are factually incorrect."
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