WIP & Debt Recovery Northern Powergrid Contract

Phoenix Consulting provided contract and commercial management support to The Clancy Group Ltd on its Northern Powergrid contract, with a focus on reducing Work in Progress (WIP) and debt to align with the Board’s financial year-end targets for 2023/24.

Part way through the financial year, the introduction of a new works management system resulted in a build-up of aged WIP during the transition phase from the legacy system. This contributed to a combined net WIP and debt position of approximately £4.1m by the end of 2023.

Phoenix was engaged to bring structure, clarity, and momentum to WIP management. This included developing a clear WIP Action Plan, improving data quality and job status accuracy, and strengthening collaboration between commercial, operational, and client teams to drive efficient conversion of WIP into cash.

Phoenix Consulting delivered:

• Development of a WIP Action Plan
• Weekly WIP reporting and data analysis
• Chairing weekly Commercial and Operational review meetings
• Improving job status accuracy within the works management system
• Aligning backup documentation with Northern Powergrid requirements
• Supporting application, invoicing, and cash conversion processes
• Weekly engagement with Northern Powergrid to reduce disputes and accelerate approvals

Between December 2023 and April 2024, the net WIP and debt position reduced from £4.1m to £3.1m. WIP held by Clancy was halved from £2.1m to £1.1m, including a reduction in historical WIP from £678k to £33k associated with the legacy system that had not previously been applied for.

Enhanced data analysis and regular operational updates enabled improved visibility of WIP requiring full scheme completion, supporting better forecasting and earlier engagement with Northern Powergrid engineers. This facilitated joint measures prior to completion, reducing disputes and delays to payment.

As a result, Northern Powergrid release rates improved week on week, cashflow strengthened, and a previous £1.2m payment on account was successfully reversed. Post year-end, WIP has continued to reduce, with disputes falling from circa £400k to £35k.

The Clancy Board commended the team’s performance, with the WIP Action Plan adopted as a template across other contracts within the business.