Wrekin Construction in administration, RBS 'inflexibility' blamed

Wrekin Construction announced to its staff that it had gone into administration at 11.45 this morning. The administrators are Ernst & Young.

Subcontractors had complained about difficulties of getting paid by Wrekin for the past month.

Shropshire-based Wrekin Construction employs around 600 workers.

Conservative MP Mark Pritchard said that the firm was forced into administration because of its bank's "inflexibility" in releasing funds.

Pritchard said: "This is a long-standing and successful company with a large order book which has been driven into administration by the inflexibility of RBS.

"Some of the blame has to fall on the doorstep of 10 Downing Street, given the government's majority shareholding in RBS."

Pritchard said the administration had been caused by RBS not releasing funds for cashflow even though the firm had an order book he said was worth tens of millions of pounds.

The company was established in 1960.

The Frain family sold the business to David Unwin in October 2007 after running up losses of more than £9m in the previous year.

Unwin quickly gave Wrekin a mighty shake: the disastrous “expansion at any cost” policy became history and £11m of cash was poured in to clear the group’s debts.

Within six months of stepping in, Unwin had put the group back into profit – turnover in the nine months to 31 December 2007 generated a pre-tax profit of £1.7m.

Wrekin subsequently bought Watson Dallas, a Scottish window manufacturer, out of receivership.

More recently, in October 2008, it acquired Toft Johnson, a civils and construction group based in Staffordshire.

Wrekin Construction announced on Monday that it had been awarded a contract by Defence Estates for construction work at RAF Menwith Hill, due to start later this month.