Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

M&E firm faces administration after Carillion's collapse

M&E specialist Vaughan Engineering is on the brink of administration after losing £1.7m following Carillion’s demise, with 160 workers facing redundancy.

The £38m-turnover company has not been paid for a number of jobs across England and Scotland where it was a principal subcontractor to Carillion.

The firm was owed £600,000 for completed works, including £300,000 for its work on the Heath School in Runcorn, which was completed in December.

It also lost £1.1m-worth of work it had lined up with Carillion for the first three months of 2018. This included work on the Vaux Brewery site, which was being delivered by a JV between Carillion and Sunderland City Council.

Vaughan Engineering has now engaged an administrator and Construction News understands it will be formally appointed today or tomorrow.

A spokesperson for parent company Vaughan Group said its Northern Ireland business, Vaughan Engineering Services, and UK business Brankin, are unaffected and continue to trade strongly.

Vaughan Engineering finance director Gavin Vaughan said: “This is devastating news for all of the people who work for Vaughan Engineering.

“We are a family-owned firm and started our GB business 50 years ago.

“We have three sites in England and Scotland, employing 160 people and paying more than £6m annually in salaries and hundreds of thousands more in rates and to our many suppliers.

“I think sadly it is inevitable that several of those suppliers and their employees will also be seriously impacted.”

The company said it had not received the same assistance as smaller subcontractors from rescue schemes set up after Carillion went into administration on 15 January.

Mr Vaughan said the company had approached the Scottish government, MPs and other government authorities for assistance, but received none. Instead it had been forced to run down its cash reserves to pay staff.

“We have tried everything we can to save our business,” Mr Vaughan said.

“It is especially painful for all of us involved in this to know that none of it is our fault.

“We did the work we were commissioned to do, to our usual extremely high standard and we completed it on time and to budget, yet this is the result.”

In January, industry bodies claimed around 80 specialist contractors stood to lose £75m from Carillion’s liquidation.

Vaughan Engineering reported a £2.1m pre-tax loss on its turnover of £38.2m in its last financial year ending 31 March 2017, with most of the losses stemming from bad debt, progress write-downs and disputed final accounts on projects in Scotland.

Sunderland City Council has been contacted for comment.

Readers' comments (2)

  • Why are Carillion Plc being allowed to destroy so many livelihoods and businesses when they still have solvent subsidiary companies with reported asset values of over 500 million pounds.

    Unsuitable or offensive? Report this comment

  • Because they can...........

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.