CEO Iain McIlwee of Trade Body Finishes and Interiors Sector (FIS) has spoken openly to the BBC about millions of pounds being owed to companies following the collapse of ISG last year.

The investigation by the BBC follows the failing of Project Bank Accounts which the MOJ said were being used on projects to upgrade three prisons in England.

At least 40 companies are believed to be owed the money for work they carried out in Birmingham, Liverpool and Dorset, and claim they should have been protected because the Ministry of Justice (MoJ) promised to pay for the projects through ring-fenced Project Bank Accounts (PBAs).

Project Bank Accounts were designed to safeguard smaller suppliers by holding payments in dedicated accounts that can only be used to pay them.  Money paid into PBAs should be handed out to suppliers almost automatically.  However, administrators EY-Parthenon insisted that when appointed the accounts had “nominal funds” in them, meaning the money was probably never paid in by the MoJ, with FIS CEO Iain McIlwee, describing the situation as a “mystery”.

Iain added:

“This is having a huge impact on small business owners, with some facing bankruptcy themselves and others struggling with significant mental stress and heartache.

“They are fighting to get back what they should have been paid 12 months ago. Companies are people and these are people in trouble that need the support of our government.”

FIS is supporting some of the businesses that are owed money by co-coordinating legal action alongside law firm Hill Dickinson.

Sarah Emerson, partner at Hill Dickinson, said they were engaged in pre-action correspondence with the MoJ on behalf of seven firms who worked on the projects. She said that her clients were small companies who felt let down and could not understand what had happened to the money they were owed.

“They were told this was a positive thing because [PBAs] would protect them from an insolvency event,” she said.

“They are set up as a trust mechanism which means funds are ring-fenced.  This means money in those Project Bank Accounts legally belongs to those that are due to be paid.”

Sarah Emerson said her firm could take the MoJ to court over the dispute

You can read the full article on the BBC website at https://www.bbc.co.uk/news/articles/c4gwz8gg6plo

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