Housebuilder collapse knocks North East supply chain

Housebuilder collapse knocks North East supply chain

The collapse earlier this week of housebuilder Southdale Ltd (Southdale Homes) is a second major blow to the North East construction supply chain in recent weeks. Sub-contractors and suppliers across the region will once again face significant losses as the full implications of Southdale’s insolvency become clear.

Administrators were called in to the Halifax based company on Wednesday afternoon and within minutes parts of the business, said to be a number of contracts across Yorkshire and the North West, were sold off to Kier Group. Meanwhile, administrators arrived at the Newton Aycliffe North East regional office and secured sites across the region.

Commenting on the impact of Southdale Ltd’s demise, Owen Pugh chairman, John Dickson, said: “This is another bitter blow for the construction supply chain in the North East. After the collapse of GB Building Solutions, there will be sub-contractors and suppliers across the region who are facing difficult times. At Owen Pugh, we are fine but there is no doubt that losses like these slow the pace of growth, reducing our ability to invest and create sustainable jobs.”

When asked what can be done about such problems, Mr Dickson said that these events are endemic in the construction industry and it is difficult to see how they can be avoided altogether, however he called for clients, particularly from the public sector, to take some responsibility to ensure that they place work with contractors who have the financial and managerial strength to complete the project, particularly when appointing main contractors from outside of the region. 

“The public sector in particular has a duty to exercise due diligence when it comes to investigating a company’s payment history, and if a company falls short, they should be removed from preferred suppliers registers.

“Once again, the local and regional supply chain is picking up the tab for the incompetence and poor administration of contractors from elsewhere.” he said.