MORE than 500 South West staff at Connaught face the threat of redundancy now the firm is in administration.

The jobs risk relates to Connaught Partnerships, the social housing sector of the building services group, which employs 4,400 staff across the UK. Both were placed in the hands of KPMG’s Richard Heis, Richard Hill and Richard Fleming on Wednesday.

While it is not clear at this stage how many redundancies there will be, a KPMG spokesman said some jobs could be saved by transferring staff with existing contracts.

Trading in Connaught shares was suspended on Tuesday, after it failed to secure funding to pay �220m of debt. The firm started life in 1982 as a concrete repair specialist in Sidmouth. It provides services to the environmental, social housing, public sector and compliance markets.

Around 10,000 people are employed by the firm, with around 180 multi-million-pound social housing contracts in the UK.

Connaught Environmental and Connaught Compliance are not in administration and continue to trade normally. Connaught Environmental principally comprises the Fountains business acquired in 2009; Connaught Compliance includes the National Britannia business acquired in 2007.

Shares in the Exeter-based company have lost about 90 per cent of their value since late June. A review of Connaught’s businesses and cash flows was made by the board and its advisers, and an additional �15m overdraft granted by the group’s bankers.

Mr Heis said: “Notwithstanding the additional overdraft, it became clear that the Partnerships business was no longer sustainable and had a substantial cash requirement significantly beyond its available lending facilities. The directors therefore have placed Connaught plc and Connaught Partnerships Limited and one smaller company into administration.

“We will work closely with customers, employees, subcontractors and alternative providers to ensure services are maintained as far as possible and contracts and employees are transferred to alternative providers.”

Have you been affected by the demise of Connaught? If so we would like to hear from you. Email ellen.cook@archant.co.uk