New leisure centre hit by delays after subcontractor entered administration

Caerphilly’s new leisure centre could be delayed by four or five months after building firm ISG went into administration.

Caerphilly County Borough Council’s regeneration committee was told, on Tuesday October 5, that the local authority did not have any direct contracts with ISG, but the firm had been subcontracted to work on the town’s leisure centre project.

ISG entered administration on September 20 and its UK operations ceased to trade with immediate effect.

“No further work will be undertaken on existing UK contracts, including for construction, fit out and engineering services,” the firm’s administrators said in a joint statement published on the ISG website.

Ahead of the Caerphilly Council committee meeting, a report stated the tender for the build of the £33.6m leisure centre project, at Caerphilly Business Park, had been “awarded to ISG”.

“However, they subsequently went into administration requiring the project to go back out to tender”, according to the report, which added that £12.2m of the project’s budget, which had been allocated for the current financial year, “is now forecast to be slipped into 2025/26 due to this delay”.

Cllr Gary Enright asked whether the council would be able to recoup any money it had spent on the deal.

But he was told the council had “never had a contractual relationship with ISG” for the project and hadn’t “paid anything” to the firm.

Instead, the council’s contractor for the leisure centre is Alliance Leisure, which in turn had subcontracted ISG for some work, the committee heard.

However, ISG entering administration had “left quite a void” in the project, which is “probably looking at a four to five month delay” while a new subcontractor was found, an officer told Cllr Enright.

Corporate director Richard Edmunds told the committee the council had done its “due diligence”.

Liz Lucas, the council’s head of customer and digital services, added that Caerphilly Council had followed a “pre-established” procurement system for the leisure centre contract.

“As soon as we knew there was a problem… we acted very quickly,” she said, adding: “Due diligence was done and will continue to be done.”

The new “leisure and wellbeing hub” will replace the town’s existing sports facilities at Virginia Park, which have been deemed “dated” and “not considered viable” to keep open.