HUNDREDS of workers at one of Shropshire¹s biggest building firms, Wrekin Construction in Shifnal, have lost their jobs after Royal Bank of Scotland bosses refused financial help to the company.
Wrekin Construction staff were called to a meeting at the company¹s head office in Shifnal on Tuesday, where the majority of workers around 450 were made redundant with immediate effect.
The news has provoked anger among business leaders and local politicians who feel the company should have been helped through its cash flow problems because it had an order book worth £40 million.
News of the redundancies came shortly after administrators Ernst and Young were officially appointed and one day after Royal Bank of Scotland bosses called in receivers to the firm and refused to offer further financial help.
Joint managing director at Wrekin Construction, Peter Greenwood, has blamed the company’s collapse on the lack of support from RBS.
Local MP Philip Dunne has raised the ‘tragic loss’ of jobs in the House of Commons during a debate on unemployment, and said it was ‘a devastating blow to the local economy’.
“My sympathies are with those who have lost their jobs and are now struggling to look for a new job and keep a roof over the head of their families,” he said.
Shropshire County Councillor for Shifnal, Stuart West, said that the collapse of Wrekin Construction was a tragedy, and a major loss for the town.
“I am not an accountant, but in view of the healthy order books I cannot see how this bank, owned by UK taxpayers, should have allowed it to go to the wall.
“This is a very bad state of affairs for the people of Shifnal and Shropshire, and a tragedy which I fear will be repeated because the banks are not delivering what they have been instructed to do.”
RBS said they decided the business was ‘unsustainable due to the extent of creditor pressure’ and that the decision ‘was not taken lightly’.
The administrators said the business had run into financial difficulties as a direct result of the economic downturn, despite having a successful track record of winning a number of new contracts worth a significant value.
Ernst & Young also said the company had recently been subject to a number of winding up petitions which had led to the appointment of the joint administrators.
The company employs 530 workers in total over its four sites, which include offices in Wellingborough, Bradford and Runcorn.
Councillor Andrew Eade, leader of Telford & Wrekin Council, said: “This makes a mockery of the whole Government plan to try to inject cash into local industries and shows the way that the banks, even with Government ownership, are failing to respond to the needs of local communities.”
