Leeds-based contractor Irwins has collapsed with the loss of 56 jobs after falling victim to a sudden reductions in public sector work triggered by the government’s austerity drive, writes Michael Glackin.

The company, which has been in business for more than 140 years, relied heavily on public sector contracts in education and healthcare. It appointed KPMG as administrator last week.

The Yorkshire company becomes the latest casualty of the coalition government’s cuts, which have already forced repair and maintenance contractors Rok and Connaught into administration with the loss of about 4,000 jobs.

Irwins, which underwent a management buy-in three years ago, had a full-time staff of 125 people and a turnover of about £30m in 2007.

In its most recent set of accounts, turnover for the year to March 2009 was £24m. Pre-tax profit rose to £209,191, although it incurred exceptional costs of £280,120 following a series of writedowns on projects completed before the buy-in and redundancy payments.

Irwins is understood to have been working on 13 projects across Yorkshire, including a three-classroom extension at Windmill primary school in Belle Isle and a £3m scheme at Nostell Priory (pictured) to restore an 18th-century stable block and create a visitor centre.

Other projects, at Lambert Memorial hospital in Thirsk, the University of York and a number of other schools, have been affected by the builder’s sudden collapse.

Mark Firmin, KPMG restructuring partner and joint administrator, said: “Irwins suffered a significant drop in turnover over recent months as a large proportion of its work related to public sector projects. Given the limited order book of the business, a sale was not a viable option and the company has had to be closed.”

A number of Irwins’ schemes, including work at schools and a hospital, remain uncompleted.

The firm was also working on a £3m refurbishment of National Trust’s Nostell Priory, which remains unfinished.

Clients have been advised to look for an alternative contractor to complete projects. Those that have paid money to Irwins will become creditors.

Firmin added: “The flow of new tenders is significantly lower than the levels seen even over the past couple of years, so in time, work will decline, seriously straining cash flow at a number of businesses in this capital spend reliant industry.”

Despite spending cuts, construction insolvencies are down 19% year on year, according to Experian. There were 235 business failures in October 2010 compared with 290 in October 2009. There was also a drop in insolvencies among building materials firms with six firms going under last month compared with 11 in October 2009.

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