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500 jobs lost as WJ Harte goes into administration

About 500 people have lost their jobs at Scottish civil engineering group WJ Harte.

The news comes after trade union warnings that the firm could go into administration this week putting more than 700 jobs at risk.

All 722 staff at the South Lanarkshire construction firm have been sent home, but more than 200 of them will be recalled to complete work on the order book.

Sister firm RJT Pennant has also been placed in administration.

The companies are the main parts of the Harte Construction Group, which has been operating since 1974, and undertook civil engineering and groundworks projects across Scotland. A separate company, RJT Excavations Limited, is not a part of the process.

Accountants and business advisers PKF have been appointed to both companies.

PKF said turnover at the Harte Group is down by more than half and the company has been saddled with “considerable levels of bad debt from creditors who themselves have gone bust”. Although revenue peaked in 2007/08 at £102m, it dropped to £40m over the past two financial years.

Anne Buchanan, corporate recovery partner at PKF, said: “The downturn in the construction sector means that the business is no longer able to operate and, unfortunately as a consequence, around 500 of the employees within the Harte Group are being made redundant.

“Harte Group is a long-established, highly-regarded firm servicing the construction industry.

“The firm has experienced a severe reduction in turnover over the last few years as well as considerable levels of bad debt from creditors who themselves have gone bust. Despite shedding jobs over the last few years to cope with this decline in turnover the firm is now unable to continue trading.”

She added that the “long term effect of the closure of a business like this may have a serious impact on the recovery of the construction sector in the future”.

Scottish corporate insolvency statistics showed that 138 businesses in the construction sector went under in the first three quarters of 2011 compared with 158 for the whole of 2010 and just 72 in 2009.

Harry Frew, regional secretary of UCATT, said earlier this week that he hoped a buyer could be found and jobs preserved. He said UCATT was seeking a meeting with the administrators “to establish what the future holds for our members”.

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