Another one hits the rocks

Around 1,800 jobs are to go at broken Rok, administrators have announced, after efforts to find a buyer for sections of the business fell through, bringing the tally of redundancies to around 2,700.

The latest redundancies have hit the maintenance and improvements division operating throughout the UK and the Scottish construction business. However, the construction and social housing division in England remains unaffected and the administrators are continuing in their efforts to sell this part of Rok’s business.

“Regrettably, the redundancies were necessary as it became clear that we were not going to be able to find a purchaser for these parts of the Group,” said joint administrator Rob Hunt, a partner with PricewaterhouseCoopers (PwC). “Operations cannot continue and hence we have had to take steps to close both the maintenance and improvements division as well as the Scottish construction divisions. We have retained a small workforce to assist us in this process.

“We have set up an employee relations helpline and are working closely with employees affected by this decision to ensure they receive the support they need during this difficult time to assist with their claims for redundancy and other compensatory payments. Staff affected by this will be paid for the period since we were appointed.

“As we have already committed, those employees who continue to be employed by the company and attend work will continue to be paid, as normal. We continue to maintain a dialogue with parties interested in the construction and social housing business in England. This division employs approximately 500 people.”

Reacting to the announcement, general secretary of the trades union UCCATT said: “This is a devastating blow for the workers and their families. It is becoming increasingly clear that the Government’s spending cuts are having a highly detrimental effect on the construction industry.
“Already this autumn two major construction companies have collapsed and thousands of jobs have been lost. The Government must urgently re-think its spending policies in order to ensure that further high-profile corporate failures and major job losses are averted.”

The latest job losses bring the total to around 2,700 redundancies. Last week, 10 November, the administrators announced 268 redundancies in Rok’s Scottish plumbing, heating and electrical (PHE) business, after it proved unable to find a buyer for the business. The same day, a further 711 redundancies were announced: 82 in the construction part of the business, another 69 in the Scotland PHE business, 558 in the maintenance and improvements business and two in the head office.

The self-styled ‘nation’s local builder’ hit the rocks on 8 November when Rok plc and Rok Building Ltd was placed in administration. The collapse was sudden and unexpected, but had echoes of the demise of Connaught only a couple of months before. Rok had experienced problems in the financial performance in its PHE business earlier in the year, leading it to issue a profit warning, but it sought to reassure stakeholders that it had addressed the problems and remained on an overall good footing for the future.

Rok’s collapse into administration prompted UCATT to call for an “urgent rethink on how maintenance contracts on local authority and housing associations properties are conducted”.

PricewaterhouseCoopers says further updates will be forthcoming.