Construction firm collapses into administration with majority of 340-strong workforce made redundant
A Cramlington-based offsite construction firm has fallen into administration, resulting in the majority of its 340 employees being made redundant.
James Lumb and Will Wright from Interpath were appointed joint administrators to Merit Group Services Limited, and Merit Health Limited and Merit Holdings Limited (together, Merit) on 17 and 18 November 2025, respectively.
The company worked with customers across the healthcare, life science, education, battery technology, and aerospace industries.
In recent months Merit experienced "contractual issues and delays to a number of its major contracts, which in turn had a significant impact on cashflow".
As liquidity pressure mounted, Merit Group Services Limited became subject to an unexpected winding up petition, which adversely affected new work awards and resulted in delays to a number of projects.
Directors undertook a thorough exploration of their options, including options for sale, refinancing and investment. However, when it became clear that a solvent solution could not be found, they took the decision to seek the appointment of administrators.
Operations have now ceased and the joint administrators have made the majority of Merit's circa 340 members employees redundant.
James Lumb, managing director at Interpath and joint administrator, said: "The UK construction industry continues to face tremendous headwinds, with rising costs, high interest rates and subdued private sector demand having an impact on larger contracts in particular.
“Although Merit has developed an outstanding reputation for the quality and innovation of its specialist offsite solutions, these broader challenges proved to be insurmountable."
He added: "We continue to explore options in order to find a solution that works for Merit’s customers, employees and creditors. In the meantime, we are prioritising providing support to all those who have been affected by redundancy, including supporting them with claims to the Redundancy Payments Service."