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100 jobs saved at Telford construction firm hit by Carillion effect

By James Pugh | Telford | Business Picks | Published:

One hundred jobs have been saved at a Telford construction firm that almost collapsed because of the crisis at Carillion.

Blue Square Building carries out building maintenance, refurbishment and new build construction.

Blue Square Building Ltd, based in Halesfield, fell into administration when contracts with the construction giant became worthless.

Carillion, based in Wolverhampton, is in liquidation. This week a committee of MPs said the Carillion board presided over a "rotten corporate culture" and was culpable for its "costly collapse".

Now directors at Blue Square Building have saved the firm after buying it back from administrators.

The business, which delivers maintenance and refurbishment services along with new build construction, had struggled due to historic debts in the region of £1.6 million.

An earlier search for investors proved unsuccessful when it emerged that the one of Blue Square's largest customers was a subsidiary of Carillion.

Blue Square Building was established in 1995 and had grown to be a significant business. It served clients in the public sector, including local authorities, housing associations and the Ministry of Defence, in addition to commercial customers.

The firm was sold out of administration by business recovery specialists at Begbies Traynor.

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Julie Palmer, partner at Begbies Traynor, said: "We're delighted to announce that we have been able to save all jobs within the business, which will continue to trade and serve its clients to the high standard to which they have become accustomed.

"The construction industry is experiencing a very difficult period as a result of the collapse of Carillion, which has not only had a knock-on effect on the firm's many suppliers and contractors but also a big impact on confidence in the sector. This has certainly exacerbated Blue Square's debt woes.

"Working with the directors, we have been able to save the business."

Carillion, the construction arm of Tarmac until splitting off in 1999, had grown into a services and construction giant with its base firmly in Wolverhampton. Its 19,000 UK employees worked on hundreds of Government contracts as well as building work up an down the country.

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But last summer it disclosed shocking losses of £850 million on a string of construction projects, including the Midland Metropolitan Hospital in Smethwick.

Bailout efforts failed and Carillion's liquidation in January left a £900 million debt pile, a £590 million pension deficit and hundreds of millions of pounds in unfinished public contracts.

So far 2,300 people have lost their jobs. While 11,600 have transferred to new employers around 3,000 jobs still hang in the balance.

James Pugh

By James Pugh
@JamesP_Star

Shropshire Star Business and Farming Editor.

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