Engineering Company Faces Administration Following Carillion Collapse

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  Posted by: electime      22nd March 2018

Part of leading mechanical and electrical building services company, Vaughan Engineering Ltd, is facing administration following the collapse of building giant Carillion.Construction.

The GB-based part of the company, which has bases in Edinburgh, Warrington and Newcastle was a prinicpal sub-contractor on several projects run by Carillion Construction. The company employs 160 people across its sites, all of whom are now facing redundancy. The Northern Ireland-based part of the business continues to trade strongly, with a three-year forward order book, worth in excess of £40 million.

Following Carillion’s collapse earlier this year several smaller contractors immediately got into difficulties and many were helped through various schemes which provided emergency assistance. However, slightly larger sub-contractors, many of whom have more than 100 employees, tried to weather the storm using their own resources in the hope that they may receive payment for the work they had carried out, which in Vaughan’s case was an order book worth more than £1.5 million.

Vaughan is currently owed in excess of £600,000 for works which they have completed for Carillion and, prior to the collapse, had been contracted for a further £1.1 million in work for this quarter alone.

The company has continued to pay their workforce for the many weeks since the Carillion announcement, despite the fact that there has been no work and no payment forthcoming from Carillion, the administrators or the local authorities and government organisations which had commissioned the various projects.

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

“We are a family-owned firm and started our GB business 50 years ago. It is a terrible blow not just for all of the individuals and their families but also for the economy. We have three sites in England and Scotland, employing 160 people and paying more than £6 million 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.

“We have tried everything we can to save our business, despite approaches to Scottish Enterprise, the Scottish Government, MPs, local and national government authorities, no assistance has been forthcoming. Instead, we are facing situations where we are actually being asked to honour clauses in our contracts which would mean we would be responsible for several years for warrantying and maintenance of work which we carried out should any problems occur, yet we haven’t even been paid for these installations.

“It is especially painful for all of us involved in this to know that none of it is our fault. At Vaughan Engineering we have always taken great pride in what we do, just last week we won another two industry awards. We did the work we were commissioned to do, to our usual extremely high standard and as usual we completed it on time and to budget, yet this is the result.”

Vaughan’s business in Northern Ireland is a separate company, which is not reliant on Carillion contracts and which continues to trade strongly. Brankin, a ventilation ductwork contractor operating throughout the United Kingdom and Ireland, which is also part of the Vaughan Group, continues to trade unaffected.