Around 2,200 workers have been made redundant and operations have stopped at all projects after the ISG Group collapse.

The fallout from the collapse of ISG in the Bonding market is likely to be less severe than many firms feared.

Sources say Surety providers have managed to contain losses at around £60m.

While it still represents a big hit for the bonding market after two already torrid years, the exposure is well below the £160m body blow suffered by Bond providers when Henry Projects collapsed.

It is also well below the level of bonding exposure at ISG Group two years ago, which stood at around £140m, indicating Bond providers were winding down their exposure for many months.

Critically this has impacted the supply chain leaving many more subcontractors and suppliers exposed to ISG’s collapse.

The surety market has settled into a new reality in the last six months after the squeeze following previous big contractor failures like Henry, Buckingham and Readie.

The surety market is going to be challenging but not impossible for at least 12 months as a direct result of ISG. While premium rates may harden, it’s going to be the reduced appetite to support businesses with weak balance sheets and cash that will cause problems for some in the market.

Final accounts posted by ISG Group before its collapse into administration show the company owed more than £700m to suppliers.

The trade and other payables total for the year to December 31 2022 was £710.3m and is an indication of how much could be owed to creditors now the contractor has collapsed.

The 2022 annual report showed a turnover of £2.18bn generating a pre-tax profit of £11.5m.

Latest returns from submissions to the Government’s Duty to Report on Payment Practices and Performance published at the start of this year had ISG as the industry’s third fastest payer to subcontractors

But the controversial self-reporting data, which is collated and published by trade body Build UK every six months, has been challenged by subcontractors who complain it is open to gaming because it is based on the number of invoices paid rather than value.  This means that if many small sums are paid promptly, large payments could still be delayed without seriously impacting payment records. Suppliers have also been complaining for months about withheld payments by ISG Group.

The annual report reveals directors of the company were paid £8.6m during the year.

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