Bouncing back

The collapse of ISG in September 2024 threw a number of large-scale sports construction projects in limbo. Among those affected were Alliance Leisure developments. Paul Cluett, MD of Alliance Leisure, recalls how the company responded to ISG’s demise

When construction giant ISG went into administration in September 2024, it left more than £1bn worth of government construction schemes – 57 ongoing projects and 33 awarded contracts – in disarray. The collapse had a devastating effect on the sector and also saw 2,200 workers made redundant with immediate effect. ISG was involved in several sports and physical activity projects. Among those, it was the lead construction partner for a number of developments led by Alliance Leisure. The impact on these projects was severe and immediate. However, within 100 days of ISG’s collapse, Alliance Leisure had every affected project back on track.

Alliance MD, Paul Cluett, reflects on how Alliance navigated the challenges, the lessons learned and the power of relationships and collaboration.

Immediate response

When ISG Construction went into administration last September, in addition to all the employees and subcontractors who lost their jobs and income on that day, the potential impact on our clients and their committed build projects was immediate and profound. ISG was the principal contractor on several major leisure development projects, being delivered by Alliance Leisure through the UK Leisure Framework, and representing approximately £250m worth of investment. Overnight, these projects faced the threat of significant delays or even cancellation. Recognising this, we triggered an urgent and comprehensive response.

Our first priority was to stabilise the situation. With projects in various stages of development, we needed to act quickly to secure all sites and took specialist advice to ensure the legal and financial positions of our clients were protected. This initial phase was all about gaining clarity amidst uncertainty. Our teams moved swiftly to assess the impact on live projects and those in pre- construction, engaging closely with clients to understand their concerns and outline a clear path forward.

Simultaneously, we began engaging with alternative contractors. This rapid mobilisation was possible thanks to our established relationships and the robust mechanisms of the UK Leisure Framework, which is managed by Denbighshire Leisure Limited (DLL) and allowed us to respond quickly and effectively. Our goal was to minimise delays and cost escalations, ensuring continuity and confidence for all stakeholders.

As a relatively small business, we are more agile than larger organisations. Our team were just fantastic. During those first 100 days, we met every evening to report on the latest updates and set the following day’s actions. I felt like a conductor of an orchestra, I was just directing our immensely talented team and knowing that I could trust each individual to deliver. I didn’t have to ask twice; we were all on the same page and in harmony, which is what got us through. The experience was both challenging and exhilarating, but not one that I would want to repeat again.

Clay Cross Active Hub

One of the projects affected by the ISG collapse was the £24.1m replacement of Sharley Park Leisure Centre in Clay Cross, Derbyshire, with a new community hub. Designed by GT3 Architects, the new hub is set to deliver a swimming pool and learner pool with spectator seating and a large, modern health club with a gym area, indoor cycling studio and sports hall.

The project is part of North East Derbyshire District Council’s (NEDDC) Clay Cross Town Investment Plan, which aims to deliver a number of projects to ensure Clay Cross is a thriving place to live and work.

Matt Broughton, Director of Growth & Assets at NEDDC, said: “When we first heard the news about the ISG fallout, it was a shock. We were concerned about the potential impact on the Clay Cross project and the community.

“Sarah Watts, CEO at Alliance Leisure, personally rang me to inform me of the situation, which left us with many questions about the next steps. It was a time for cool heads and professional advice.

“Alliance Leisure’s response was swift and reassuring. They immediately provided advice and leveraged their extensive supply chain and framework partners to address the situation. During those early days, their clear communication and proactive approach were invaluable. They kept us informed at every stage and quickly appointed new contractors to ensure the project stayed on track. It was everything you could wish for from a true partnership.”

Tackling live projects

The live projects presented the most immediate challenges. Each site was in a different state of progress, and the sudden exit of ISG left behind an operational tangle that required meticulous unpicking. Our team undertook detailed reviews of each project to understand their exact status and scope, working closely with clients to keep them informed and reassured throughout.

Leveraging the UK Leisure Framework, we engaged alternative contractors to develop Contractor Proposals (CPs) for each project. These CPs formed the basis for new contracts, allowing work to resume without unnecessary delay. This phase was complex and demanding, but our team’s dedication ensured that every project moved forward efficiently in alignment with our clients’ objectives.

Tackling pre-construction projects

For projects still in the pre-construction phase, our focus shifted to ensuring they remained viable and set for progression. We engaged alternate contractors to conduct high-level cost reviews, providing clients with confidence that their investments were secure. Once these reviews confirmed the feasibility of proceeding, we began preparing CPs for these projects.

To maintain momentum, we also secured contractors to undertake enabling works where possible. This approach minimised programme disruption and kept projects moving forward, even as the broader construction industry adapted to the repercussions of ISG’s collapse.

PLACES

The power of collaboration

Reflecting on the past three months, I am immensely proud of how our team and our network of professional advisors rose to the challenge. Their resilience, resourcefulness and commitment ensured we found effective solutions to keep projects moving forward.

The success of this recovery is due to collaboration at every level. Internally, our teams worked tirelessly, pooling expertise and resources to deliver effective solutions under pressure. Externally, we relied on the strength of our partnerships with contractors, consultants and of course, our clients. Their trust and cooperation enabled us to implement solutions quickly and effectively. Open and transparent communication was key, ensuring that everyone involved had a clear understanding of the steps being taken and the outcomes we were working towards. The UK Leisure Framework also proved invaluable, providing a flexible yet robust platform that allowed us to navigate the complexities of the situation with confidence and agility.

Key learnings

The experience of managing the fallout from ISG’s collapse has reinforced several core principles for Alliance Leisure. First and foremost, it highlighted the importance of adaptability. The construction landscape is inherently unpredictable, but by staying agile and solution-focused, we can continue to deliver for our clients, even in the face of significant disruption.

It has also reinforced the importance of relationships. I firmly believe you reap what you sow. The relationships we have built with clients and partners over the years paid dividends. It was especially rewarding to see Sport England supporting affected schemes by providing additional funding to help ensure committed projects remained viable. People could see we were working exceptionally hard to achieve the best outcomes for all involved. They were understanding, supportive and despite everyone feeling some degree of pain during this experience, they were prepared to dust themselves off and stand shoulder to shoulder with us.

The experience also reaffirmed the value of the UK Leisure Framework as a tool for resilience. It allowed us to respond quickly, secure alternative contractors and maintain project momentum, ensuring that our clients’ objectives remained achievable.

Finally, it underscored the strength of our team. The professionalism, dedication and expertise displayed by everyone involved were nothing short of remarkable. Their efforts not only mitigated the immediate impacts of ISG’s collapse but also strengthened our processes and partnerships for the future.

The outcomes

Despite the challenges, the outcome has been overwhelmingly positive. We got all ISG-affected projects back on track, with minimal cost increases and disruption to timelines. This is testament to the effectiveness of our approach. As we move forward, we remain focused on completing these projects to the highest standards, ensuring they deliver long-term value for our clients and their communities. The lessons learned from this experience will continue to inform our work, helping us to navigate future challenges with confidence and clarity.

I am also very pleased that many of the ISG employees and sub-contractors that we have worked with over the years have found new roles with main contractors delivering Alliance leisure projects.