RBS in firing line after firm's collapse
Bankers at RBS are in the firing line after hundreds of workers lost their jobs when a Shifnal building company went into administration.
Wrekin Construction said it had to tell its 530 employees they had lost their jobs the same day as it received confirmation of £50 million of new orders, because Royal Bank of Scotland would not extend credit to cover cash flow problems.
The company and Wrekin MP Mark Pritchard have attacked Royal Bank of Scotland for "inflexibility" in providing funding.
Administrators Ian Best and Tom Lukic of Ernst & Young were appointed at the Wrekin Group and Wrekin Construction yesterday after the company became subject to a number of winding up petitions.
Mr Pritchard said: "This is a long-standing and successful company with a large order book which has been driven into administration by the inflexibility of RBS.
"Some of the blame has to fall on the doorstep of 10 Downing Street, given the Government's majority shareholding in RBS."
In the House of Commons yesterday Mr Pritchard told MPs that he had alerted Business Secretary Lord Mandelson to the company's plight late last year.
Accusing ministers of failing to safeguard the jobs of a profitable company, he said it was an "absolute scandal" that the Government had not stepped in.
In a statement Wrekin Construction said, in addition to a £40 million order book this year, the company yesterday received confirmation of two new orders each worth £5 million a year for the next five years.
"All Wrekin Construction needed to keep going in a very competitive market was £2-£3 million," it added.
But Royal Bank of Scotland said: "We have given very careful consideration to their situation and regrettably concluded that the business was unsustainable due to the extent of creditor pressure."
