ISG Administrators Recover £45 Million in Two Years Following Collapse

Background on ISG's Collapse

ISG, once the sixth largest construction firm in the UK, was placed into administration on 20 September 2024, leading to the immediate loss of 2,200 jobs and the cessation of its UK operations. At the time, the company was grappling with severe financial difficulties, including over £1 billion in public sector contracts and £2.5 billion worth of projects underway. The firm had reported a turnover of nearly £2.2 billion and a profit of £11.5 million prior to its collapse.

Recovery Efforts by Administrators

Following ISG's administration, administrators from EY, including Timothy Vance, Alan Hudson, and Dan Edkins, have been working diligently to recover funds for creditors. As of 19 September 2025, their efforts had yielded over £26 million from trade debtors and client retentions. This was a significant increase from the initial recovery estimate of £11.4 million. In total, the administrators have successfully recovered £45 million over the past two years.

Financial Implications for Employees and Creditors

While the recovery efforts have been promising, the financial implications for ISG's employees and creditors remain severe. Employees of ISG Interior Services Group UK Ltd are expected to receive approximately 7.2 pence for every pound owed, while HMRC has a secondary preferential claim of £91 million for unpaid VAT, PAYE, and NIC. Notably, preferential creditors related to ISG Construction, ISG Central Services, and ISG Retail are expected to be paid in full.

Challenges Faced by Subcontractors

Subcontractors have been particularly hard hit by ISG's collapse, with many reporting difficulties in receiving payments. The company's payment practices were scrutinised, revealing that it had manipulated government fair payment reporting, ranking as a top payer despite large unpaid amounts. In the six months leading up to June 2024, ISG's average time to pay invoices was reported at 17 days, but its average creditor days in 2022 had increased to 51 days, up from 38 days in 2021.

Call for Investigation

In light of these events, ISG staff have demanded a formal investigation into the company's owners and board. They have expressed frustration over management's failure to address legacy and ongoing problem contracts, which contributed to the company's financial demise. This culture of fear around challenging management's optimistic project accounts has further complicated the situation, highlighting the need for greater transparency and accountability in the construction industry.

Conclusion

The recovery of £45 million in the two years since ISG's collapse marks a significant achievement for the administrators amidst a backdrop of financial turmoil. However, as the industry grapples with the fallout, the need for improved practices and accountability within construction firms has never been more apparent.