Govt spending cuts produce first major casulty!

Property and environmental services giant Connaught is expected to formally enter administration later, putting thousands of jobs at risk.

The company, which specialises in social housing, said late on Tuesday it was "in the process of appointing administrators".

...It would be the biggest company bankruptcy in the UK since Woolworths failed in 2008.

Connaught employs almost 10,000 people, and around 180 outstanding maintenance contracts with local councils and housing associations.
BBC News - Connaught administration threatens thousands of jobs

I wonder how many other businesses were dependant on govt and local authority contracts? I bet we'll hear plenty more bad bews in the near future.

I suppose it would be the online equivelant of Google deciding you could no longer use adwords, adsense or recive any of its traffic

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I have to disagree with it being cutbacks, here is a company that appears to have chased one market, that in my opinion is a pretty sure bet that as a company you would be paid (as it's mainly councils etc) and yet they have managed to loose money.

You don't loose the kind of money they have in a short period of time, they could have trimmed their expectations in line with the councils and said this year we need to find 25 % savings.

Badly run company doing well because of circumstance, someone again will pick it for the nominal pound (3i or someone) and 2 years time will make £250 Million for the sale.

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The quality of their work was bad, my daughter who is a surveyor with a local council had to reject a lot of their work, this causes cash flow problems and extra paper work.

At the end of the day bad management and too many egg's in one basket?

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I think both the above posts are typical examples of why this business has failed, like Woolworths before it they failed to adapt to the emerging economies, business practice and the basic principle of providing a GOOD service and delivering a quality job for a fair price! And the fact that like most corporates they are ladened with excessive costs and spending.

We see this everyday in the education sector with ICT service providers. We started our core business (S4 ICT Ltd) a little over 2 years ago as the recession bit, we recognised that the education sector, particularly primary has been very badly serviced for decades by a cluster of poor IT companies (large and small) who cornered the market and were complacent in their public sector prowess.

Beating them was simple as Connaught's competitors may have found. Simply do a good job, for a fair price and really care about your customer! Get along side them and understand what they want, not what they've always got! A methodology that saw us win over 400 schools as clients in just over 2 yrs causing our main "long established" competitor to go under.

I'm sure they blamed the economy?

Apart from many SME's who have gone under due to cash flow issues and a lack of support from their banks and the government, corporates in many cases simply become complacent in their position and "history" and are unable to flex to the conditions of an economy than smaller businesses.

Long live the SME, britains biggest employer!

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Morgan Sindal have paid £28 million to buy market share over night - hows that good value, could the administrators not run it for a while and see what it could of fetched

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As already mentioned this did not have that much to do with the economy and more to do with poor management over a few years.

It should also be noted that only one division of the company were put into Administration and not the whole thing. They have 3 distinct divisions, it was the public one that got into trouble.

I advised a sole trader a few months back when they were having problems getting their loans restructured. He was in for £25K which would have sent him into oblivion. Thankfully a few months further on he managed to get his debt down to 4.5K and refused some work and instead was getting the same work from a sub contractor.

This one will see a fair few sub contractors lose their businesses and worse.

The administrators have taken the first (although it will be called the best) purely to save jobs. Their debts will be so large that nobody will see much, if anything, of a return in any case, so it is more about saving jobs than making some money back.

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Today I have recieved an email asking me to quote a client for a new boiler, they had previously been sent a quotation from Connaught which has been forwarded to me to see whether I can better it. When I read it I came to one or two conclussions, either I am totally under charging people and I really should be a millionaire by now. Or Connaught were massively over charging clients.

A new gas pipe + new combination boiler + split existing heating system in 2 plus fit secondary gas meter ... total cost of materials £1500 - £1800 two to three days work maximum. Connaught wanted £12066.55 plus VAT. So If they were charging clients this kind of money I can't see why they were having cash flow problems

Holy moly! Bet thats a quote were doing work for the local authority

I'd like to think your average home owner who has to foot the bill would be a bit more savvy...

Does make you wonder what they did with all the cash

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