A Norfolk engineering firm's collapse has had a devastating knock-on effect, leaving hundreds of people without jobs and local businesses on the brink.
But experts now say the influx of skilled workers actively looking for employment, in the wake of Specialised Management Services (SMS)-Alderley in Gorleston going under, could help improve the region's skills shortage.
SMS-Alderley went into administration on July 24, causing hundreds of redundancies. The firm owes dozens of suppliers across the region thousands.
The company, based at Gorleston's Beacon Park, manufactured equipment and provided maintenance and installation services for the oil and gas industry.
READ MORE: Rig workers left stranded offshore after Norfolk firm crashed into administration
Kevin Keable, chairman of East of England Energy Group (EEEGR), said: "SMS employed many highly skilled individuals, who are being picked up by local companies now to fill gaps in their workforces.
"SMS carried a lot of work overseas, so we might also see workers come back into the local workforce, which would obviously benefit local companies."
SKILLS SHORTAGE
Industry leaders say there is a skills shortage in the east, as well as a widening skills gap.
The skills gap refers to the disparity between the skills employers expect their staff to have and the actual skills employees possess.
"There remains a skills shortage, which is only going to get worse as people retire and fewer young people are entering the industry," Mr Keable said.
"This is why it is so important to find new employers for apprentices now left without training, and work to get them qualified.”
By 2030, a projected 20pc of workers in East Anglia will be underqualified for their positions according to the Norfolk Chambers of Commerce.
Both the skills shortage and skills gap are due to a variety of factors, including a lack of investment from the government and employers, and a lack of interest in certain industries.
ABANDONED APPRENTICES
There were many apprentices in the hundreds of staff who lost their jobs when SMS-Alderley entered administration. Some were more than three years through their four-year courses.
The college coordinating their training - East Coast College, which has campuses in Great Yarmouth and Lowestoft - told students they had just 12 weeks to find a new employer, or lose their apprenticeships.
READ MORE: The apprentices left high and dry after Norfolk firm goes into administration
The government provides 12 weeks of funding for apprentices who are made redundant, to allow them to continue their off-the-job training.
Paul Wright, project director at not-for-profit apprenticeship agency TrAC, said it has previously supported apprentices who have been made redundant by employing them and placing them with companies to enable them to complete their training.
"The challenge is always finding sufficient placements, particularly where a business employing hundreds of workers has entered administration as the local jobs market can quickly become saturated," he said.
"Ideally, we would be able to support every redundant apprentice through our not-for-profit agency approach, but we simply don’t have the resources to be able to help everyone without some form of funding or support, either from government or from other sources."
Acknowledging the government's 12-week funding period is "frustrating", he said: "Unless there is a limit some apprentices could be in limbo for months or even years, while they try to find alternative employment."
Mr Wright added: "There is a perceived skills shortage, but in reality it is often difficult to persuade businesses to take the plunge and employ an apprentice rather than to seek fully skilled labour for a role, especially where they have a choice.
"More needs to be done to support businesses to train the next generation, as we see huge numbers of young people seeking an apprenticeship every year.
"Demand for places always outstrips supply."
THE SUPPLY CHAIN
Some local businesses owed hundreds of thousands of pounds by SMS-Alderley are now facing the prospect of closure.
S&G Fabrications, in Lowestoft, claims it is owed £250,000. Director Dave Hayes said this left the company in a hole it "might not come out of".
READ MORE: Business facing closure after Norfolk firm goes into administration owing it £250,000
More than half of S&G Fabrications work came through SMS-Alderley. The Lowestoft firm had not been paid in more than four months.
Candy Richards, development manager for East Anglia at the Federation of Small Businesses (FSB), said: “When any business goes into administration it can have a devastating impact on small businesses in its supply chain.
"One large unpaid invoice can be enough to tip them over the edge and, worryingly, we know late payments are on the rise.
"That is why it is vital that the government gets to grips with putting forward legislation to tackle poor payment practices by big businesses to their small suppliers."
Research by the FSB found a third of all payments to small businesses in the UK are late.
As a result, 37pc of small businesses run into cash flow difficulties, 30pc have been forced to use an overdraft, and 20pc have seen a slowdown in profit growth.
"During their election campaign, Labour pledged to crackdown on late payments as part of their Small Business Plan," she added.
"Now that they are in government, we need to see their promises put into action."
SMS-ALDERLEY
Formed in 1999, Specialised Management Services (SMS) manufactured equipment and provided maintenance and installation services for the oil and gas industry, specialising in hydraulic, pneumatic and electrical control systems.
It was headquartered at Starling House, off Lancelot Road, at Gorleston's Beacon Park.
SMS was acquired by its parent company Alderley PLC, based in Gloucestershire, in 2003.
Both Alderley Plc and Alderley Systems entered administration alongside SMS-Alderley on July 24.
Alderley was founded in 1989 by Bristol businessman Tony Shepherd, who named the business after his home village, Alderley. Mr Shepherd died in 2020.
Alderley had bases in the UK, India, Saudi Arabia, Singapore, United Arab Emirates and Qatar.
The exact number of job losses at SMS-Alderley is unknown but is believed to be in the hundreds.
READ MORE: Norfolk firm collapses into administration - leading to hundreds of job losses
A statement on the SMS and Alderley websites reads: "The affairs, business and property of Alderley Plc (APLC), Alderley Systems Ltd (ASL) and Specialised Management Services Limited (SMS) are being managed by Alistair Wardell, Richard Lewis and Rob Parker appointed as joint administrators on 24 July 2024.
"The Joint Administrators act as agents of APLC, ASL and SMS and without personal liability. Alistair Wardell, Richard Lewis and Rob Parker are authorised by the IPA to act as insolvency practitioners."
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