The number of available places in men’s prisons fell to just 83 in August, the lowest number on record, after a summer of riots added even more pressure to a system that was already at breaking point.
Around 1,750 prisoners were released early this month in a bid to free up space and ministers are considering renting spare prison spaces from jails in Estonia to ease overcrowding.
The Ministry of Justice held contracts with ISG worth a combined £1.65bn as of June 26, according to Freedom of Information requests by Construction News.
ISG, the UK’s sixth largest construction company, was one of the companies chosen to deliver new prisons under the Ministry of Justice’s £4bn investment programme to build an extra 20,000 prison places by the mid-2020s.
This included £135m in contracts awarded in March for work on HMP Guys Marsh in Dorset and HMP Liverpool, as well as a £300m contract to build HMP Grendon in Buckinghamshire, which was awarded in January.
ISG in administration
In a late-night email on Thursday, Zoe Price, the ISG chief executive, said the company had filed for administration after attempts to secure a sale or refinance the company fell through and that sites and offices would close immediately.
Ms Price said this was due to “legacy issues relating to the large loss-making contracts secured between 2018 and 2020 (primarily in the residential, logistics & distribution sectors, as well as some data centre projects).”
High inflation in recent years has hit the industry especially hard. Construction contracts run for years, so a run-up in material costs can quickly make some projects unprofitable.
EY took control of the company as administrators on Friday. Of ISG’s total 2,400 staff, 200 will be initially retained to help the winding down of the business.
In a statement, EY said: “We wish to be clear to employees, suppliers and customers that it was not possible to conclude a sale as the potential purchaser could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent.”
ISG and the Ministry of Justice were contacted for comment.