Britain’s prisons crisis deepened last night after a major government contractor tasked with building more jails went bust in a move that cost more than 2,000 jobs.
As controversy rages over the early release of offenders, there are fears the collapse of ISG could now delay the construction of much-needed prison space.
Ministers are pushing ahead with plans to allow thousands of convicts to walk free before the end of their sentences to ease overcrowding.
Labour said the exodus from jails in England and Wales, which included convicted killers, was necessary as prisons were at the ‘point of collapse’.
And Prime Minister Sir Keir Starmer is now facing a major hurdle in his bid to meet Labour’s target of creating 14,000 new prison spaces to fix the system.
A prisoner is released from HMP Liverpool. Around 1,700 prisoners were released early from their sentences in the first phase of the government’s plan to tackle overcrowding
Labour are trying to create 14,000 new prison spaces in a bid to fix the system (Stock Image)
Building sites and offices were closed yesterday after London- headquartered ISG’s 2,400 staff were told that the company had gone bust.
The firm, owned by Texan oil billionaire William Harrison, appointed EY as administrator to handle the insolvency.
It is the biggest construction industry failure since Carillion went bust in 2018. Around 2,200 workers have been made redundant with immediate effect, with 200 staying on temporarily to help with the administration.
ISG – the UK’s sixth-largest contractor – was working on 22 schemes worth £824million for the Ministry of Justice, including a £300million ‘super prison’ in Buckinghamshire.
According to data analysts at Barbour API, it had 69 central government contracts worth £1billion.
The Ministry of Justice said it has ‘robust contingency plans’ to mitigate the impact of ISG’s collapse and ‘will find alternative ways to deliver projects where necessary’.
The Mail understands the MoJ has been working on plans to cope with ISG’s failure for several months as fears over the firm’s financial health had been growing.
The Ministry of Justice said it has ‘robust contingency plans’ to mitigate the impact of ISG’s collapse and ‘will find alternative ways to deliver projects where necessary’
There were hopes it could be rescued in a takeover by Antipodean Holdings, a firm set up by South African and Australian investors.
But a deal did not materialise after months of reassurance that one was imminent.
The administrators said Antipodean Holdings could not ‘demonstrate that they had the funding needed to recapitalise the business and keep it solvent’.
It comes after 1,700 prisoners were released early this month, with 5,500 expected to walk free by the end of October.