It’s not easy these days for a council to complete cherished projects. Threats to finance are liable to jump out of the woodwork from unlikely sources — quite apart from the longer term Government cuts that are beginning to bite.

As a case in point, Oxford City Council leader Bob Price’s immediate reaction when I told him this week of the financial collapse of building and maintenance contractors Rok, the self-styled “nation’s local builder”, was: “I am surprised that administrators have been called in, given the high quality of Rok’s services.”

But his immediate concern was how Rok’s troubles would affect one of his pet projects, namely the £3.5m conversion of former theatre the Old Fire Station in George Street into an education and arts centre for young homeless people.

He said: “It is particularly worrying because we aim to open the new centre in July 2011.

“And that date is important because much of the Government funding we have received for the project must be spent by July. So any delay could cause problems.”

He added: “We hope that we shall be able to work with the administrators. The builders have stripped the place out and were about to start on the conversion itself. So not a lot of the money has been spent yet.”

The Government’s Homes and Communities Agency provided £2.9m towards the project, along with £200,000 from homeless charity Crisis and £413,000 from the city council itself.

Some hours after our first conversation, and with something approaching a sigh of relief, Mr Price rang me again to say that by and large the council had no other “exposure to risk” from Rok’s collapse. But somehow the episode shows how hard it is for councils to plan ahead, particularly as the latest collapse comes just ten weeks after Rok’s social housing competitor Connaught went into administration — leading to about 1,400 redundancies nationwide.

But how did Rok, which employs about 3,500 people nationwide and 17 at its Eynsham office, so suddenly end up in a place so hard that it was forced to appoint administrators PricewaterhouseCoopers on Monday?

The company’s difficulties apparently stem from its dependency on public sector-funded projects. Its sales for September are reported as being 30 per cent below internal forecasts, and it chalked up £3.8m half-year losses earlier this year.

The losses came after an independent review by accountants BDO uncovered “serious failings” at its plumbing, heating and electrical business.

The group finance director Ashley Martin was suspended following the review. He was later reinstated “without reservations”, and completely cleared of blame, but resigned immediately.

Mike Jervis, joint administrator and partner at PwC, said: "Our immediate priority is to urgently review the financial position of the company and seek a buyer of the businesses.

“Employees will naturally be concerned about their position, but they will continue to be paid if they attend work and perform their duties as normal.”

Rok has worked closely with Oxford City Council to improve the city’s social housing through rewiring, installing gas central heating systems, new kitchens and bathrooms in people’s homes.

It was also closely involved with the refurbishment of the Barton, Ferry Pool, and Blackbirds Leys leisure centres.

City council spokesman Fiona Colcutt said: “Rok has carried out the major redevelopment work at three of our leisure centres. There is still some minor work to be done at Barton leisure centre.

“This is a potentially significant development for the Old Fire Station and we are currently evaluating the impact and consequences of this news.”

Over at the county council, meanwhile, spokesman Louise Mendonca said they had worked with Rok in the past but had no ongoing projects with the company.

The plans for the Old Fire Station include a help centre for homeless people called the Skylight Centre, to be run by Crisis, and an arts project to be run by a group called Arts at the Old Fire Station.

The problem for local councils is how to nurse such projects, initiated long before Government cuts were announced, through to fruition.

But whether or not Rok is bought up quickly — and the administrator is optimistic on this front — financial difficulties in large private companies, in the present financial climate, are likely to affect people living in care homes and social housing in unforeseen ways.

For instance, Britain’s largest housing association Anchor, which began life back in 1968 as Help the Aged (Oxford) Housing Association, owns seven rented retirement housing schemes and one leasehold housing scheme within a five-mile radius of Oxford, all maintained by Rok.

Jill Barlow, head of property services at Anchor, said: “We are saddened to hear the news that Rok has entered administration.

“The wellbeing and safety of all our customers is paramount.

“We therefore have arrangements with a number of contractors for all our services for occasions such as these. We will be turning to one of our alternative contractors to fulfil Rok's functions, which will keep any disruption to an absolute minimum.”

Whatever the news on the unfolding story of Rok, which has made some of its Oxfordshire staff redundant over the past year, these must be worrying times for the remaining staff.