530 jobs go as firm folds

By Kirsty Smallman and Business Editor Amy Bould

A Shropshire building company today folded after more than 40 years in business with the loss of 530 jobs.

Bosses at the Wrekin Group, which owns Wrekin Construction, based at Lamledge Lane in Shifnal, told workers the company had gone into receivership and all staff had lost their jobs.

A total of 260 of the workforce are based in Shropshire, including 120 staff at the firm's Shifnal head office. Other axed workers are based in Wellingborough, Bradford and Runcorn.

Receivers from Birmingham-based Ernst & Young arrived at the site this afternoon. Peter Greenwood, managing director of the Wrekin Group, said the workforce was "gutted". He said: "It's cash that we have run out of effectively and there has been a total lack of support from our bank RBS.

"Today the bank have sent a formal demand that we repay our overdraft of £2.8 million. We cannot do that because they have frozen our accounts so the bank has appointed receivers."

Mr Greenwood added: "We have offered the bank shares in the business and the chairman David Unwin has offered to stand down but the bank is only intent on cash.

"The irony is we have £40 million of work secured this year and £4 million next year and an extra £1 million will be in the bank by the end of the week." Workers who were working on multi-million pound projects across the country today downed tools and were asked to travel back to the headquarters following the announcement.

One worker, who did not want to be named, watched as heavy plant machinery was moved off the site this morning.

He said: "Everyone is pig sick but there is a great feeling of sadness more than anything."

Wrekin MP Mark Pritchard was planning to raise the company's failure on the floor of the Commons later today.

Mr Pritchard said: "This is a major blow to Shropshire and the West Midlands as a whole. The blame lies entirely at the steps of 10 Downing Street, given that the Government is the major shareholder in the Royal Bank of Scotland.

"This is a long-standing and profitable company which employs hundreds of local people. The failure of the Government and the RBS board to act to ensure cash flow will cause extreme hardship for many families and the local community."

Last month the company was awarded the RAF Menwith Hill Northern Perimeter Patrol Path contract by Defence Estates, which was due to start this month.

Just weeks earlier the award-winning company won a £13.3 million three-year package as Halton Borough Council's partners to deliver bridge maintenance. In November bosses revealed they were bucking the current recession by acquiring two companies and saving more than 50 jobs.

The company bought one of Staffordshire's most respected civil engineering and construction firms, Toft Johnson (Construction) Ltd, and also added window manufacturer Watson Dallas to its portfolio.

The Wrekin Group and Wrekin Construction, launched by Tom Frain in 1960, was bought by the current owners in 2007.