The collapse of the Stewart Milne Group has sent shockwaves through the construction industry as the firm’s entry into administration has resulted in the immediate loss of more than 200 jobs. The group, based in the north-east of Scotland, cited significant challenges since the onset of Covid-19 as the underlying reason for its financial woes. Following the collapse, 217 jobs have been affected with several sub-contractor roles also anticipated to be impacted. The firm’s chairman, Stewart Milne, had attempted to sell the company last year but the effort fell through, ultimately leading to this unprecedented turn of events.
As the appointed administrators, Teneo confirmed that six of the company’s subsidiaries have been placed into administration and that sub-contractors should cease undertaking any further work for the business. The administrators also emphasized that site access, for example to collect equipment, should not be attempted without their prior approval. This catastrophic development also means that trade roles working on the housebuilder’s sites will be impacted. The collapse is said to be the result of several years of special agreements characterized by multiple extensions on the firm’s debts, according to Lloyds Banking Group.
Homes England is actively engaged in discussions with Stewart Milne Group’s administrators with the hope of ensuring the continued delivery of development sites in North West England operated by a subsidiary of the collapsed house builder. While the group has ceased trading with immediate effect and no further building work is taking place, one of its subsidiaries, Stewart Milne Homes North West England (Developments) Limited, which is Manchester-based, is not yet in administration and has a separate funding structure. As a result, 58 of its staff have been retained, offering a glimmer of hope in an otherwise bleak situation.
The devastating consequences of the collapse have not only led to a significant loss of jobs but have also raised concerns about the future of ongoing construction projects. The collapse of Stewart Milne Group serves as a stark reminder of the challenges faced by businesses in the aftermath of the Covid-19 pandemic, underscoring the fragility of the construction industry in these unprecedented times.
