Wrekin Construction has a £40m order book, is owed £2.8m by the MoD and offered RBS shares and land. But still it failed. No wonder its boss blasted the hollow words of banks and Cabinet.

Bosses at the Wrekin Group today firmly laid the blame for the collapse of the company at the doors of its bank and the failure of the Government to step in to help save more than 500 jobs.

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Joint managing director Peter Greenwood claimed someone at the Royal Bank of Scotland “should be shot” for failing to support the company which has a £40 million order book this year.

The company had asked RBS for £2 million to help cashflow and had offered shares in the business and land as security, but the request was turned down.

Bosses approached Business Secretary Lord Mandelson for assistance and the request was forwarded to the government agency BERR, formerly the DTI, with the company pointing out that in addition to this year’s £40 million workload, it was looking at a further £50 million of orders already over the next five years.

Mr Greenwood said: “We have been on to cabinet ministers to see if they could intervene but it is clear there is no joined up thinking between the Government and the banks. All their words are hollow.

“The irony is that the total cost of the company going into administration will be around £10 million, all we needed was £2 million from the bank. And we are owed £1 million which will be in the bank by the end of the week.

“There has been a total lack of support from our bank, RBS. It started last year when we were in a situation where we had a £5 million overdraft facility.

“We have properties all over the country and there was a particular one in Bradford which we sold for £750,000, against which the bank had £280,000 borrowing secured. Following this our overdraft facility was lowered to £4.25 million, leaving the company struggling and the credit crunch biting harder.

“In addition to this credit insurance was being removed, which was a drain on cash. For example we had a £1.25 million facility reduced to £250,000 by one of aggregate suppliers. In early October we went to see the bank and talked about re-financing some assets through Lombard, we were told it was going to get done by Christmas and promised things were moving forward, but they weren’t.

“We are owed in excess of £2 million by a major private client, a blue chip company, which has been awaiting funds from Fortis Bank since before Christmas and there is an outstanding amount of around £2.8 million owed by the Defences Estate which despite assurances that it would be looked into urgently, that has still not been paid. It’s cash we have run out of effectively.”

In a bid to save itself from receivership, the company pointed out to BERR yesterday that the total cost of the collapse of the Wrekin Group to the country would be about £10 million over the next two years.

Chairman David Unwin, in a letter to BERR, said: “The redundancy costs for BERR to pick up will be in excess of £2.5 million, PAYE is £400,000 a month, obviously the government will then have to pay the unemployment costs of around 500 employees. Most of them won’t get a job for 18 months to two years because of the current recession in the construction industry.

“The total cost to the country will be around £10 million over a two year period. All the company needs going forward is £2 million that we are prepared to pay a commercial rate of interest on.”

However, the plea fell on deaf ears, and today RBS issued a formal demand for the £2.8 million overdraft to be re-paid.

Mr Greenwood said: “We can’t pay it because they have frozen the bank account and so the bank has appointed receivers. We offered the bank shares in the business, the chairman offered to stand down but they were only intent on the cash. It’s heart-breaking. If this was to be looked into, then someone at RBS should be shot.”

Mr Greenwood, who said he had worked for the company for 35 years, said staff had been told at a meeting this morning and the administrators, Ernst & Young, were due on site this afternoon.

“Our hope was that we would never get to this point.

“We are owed £5 million by two organisations, we have given it our best shot, tried our best but fallen at the final hurdle,” he added.

Mr Greenwood said he had not been told of the administrators’ immediate plans but they would be talking to staff this afternoon.

He added he expected the receivers to start selling off assets and contracts which had already been won by Wrekin and were on the company’s order books.