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Construction Firms go into Administration with Loss of 150 Jobs

Three connected construction firms, Clugston Group, Clugston Construction and Clugston Services have gone into administration. Clugston Estates and Clugston Distribution Services are unaffected and continue to trade as normal.

The group which is based in Scunthorpe, North Lincolnshire and employs more than 400 staff have appointed KPMG as administrators.

Originally founded in 1937 as Clugston Cawood, the business had grown to operate from over 25 sites across the Midlands and northern England with involvement in five key divisions: Construction, Civil Engineering, Logistics, Property and Facilities Management.

Recent losses from large and complex energy from waste contracts reportedly left the business with debts of over £40 million. 150 staff have already been made redundant, with the remaining being retained as the administrators look to continue trading some divisions and sell new contracts.

James Clark, Associate Partner at KPMG and joint administrator said:

“The directors of the business have worked tirelessly trying to rescue the group and have pursued discussions with a key stakeholder about a potential rescue deal. Unfortunately, it has not been possible to obtain the funding required, and as a result, the directors concluded they needed to appoint administrators to protect the value of business.

“Our focus over the coming days will be to seek buyers for the contracts and divisions, and to liaise with those employees who have been made redundant, ensuring they are provided with the support and information they need to claim their statutory entitlements from the Redundancy Payments Office.”

Following the collapse a number of large projects have been left in limbo. Work on a £6 million project to refurbish the headquarters of the West Yorkshire Combined Authority, based at Wellington House in Leeds, has been now stopped.

Similarly, the construction of CAPA College’s new flagship centre in Wakefield which began in August has also been halted. The project, being delivered under the Education and Skills Funding Agency (ESFA Framework), is to include a 150-seat theatre, an outdoor amphitheatre, dance, singing and drama studios, media, television and design studios, production and technical workshops and a public cafe with outdoor terrace.

The college gave the following statement:

“On Friday morning we received the disappointing news that Clugston have filed for administration.

We are already working with the Department For Education on moving forward to appoint new contractors to complete our flagship home.”

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