VSG provided engineering and maintenance staff for Network Rail and London Underground

Rail contractor in administration avoids job losses

A railway engineering and maintenance contractor has gone into administration, but has avoided redundancies.

Vital Services Group (VSG), which provides staff for Network Rail and London Underground, has appointed Deloitte to manage the issue and Morson Group – another workforce provider – has already bought the assets and contracts of the seven affected companies.

The administrators said this has secured all the jobs, with employees transferring across, and will enable essential services to the rail industry to continue.

Vital Services was founded by John Smith 30 years ago and provides permanent and temporary staff for a range of industries, but it has suffered cash flow problems.

In a statement Deloitte said VSG directly employs 208 people in Manchester but through its supplier relationships it contracts about 2,000 more, mainly in the rail sector. It is the largest supplier of labour for Network Rail.

Dan Smith, joint administrator and partner in Deloitte's Reorganisation Services practice, said: "The group has suffered recently from cash flow pressures. The sale of the trade and assets of these companies minimises disruption in the continued delivery of these essential services to the rail industry and secures jobs."

The deal involves Vital Services Group Limited, Vital Rail Limited, Ematics Limited, Vital Resources Limited, Quality Recruitment Limited, Vital Consulting UK Limited and Vital Power (UK) Limited.

Three other companies in the group – Vital Skills Training Limited, Sicura Systems Limited and Vital Technology Limited – are not affected.

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