Emergency contingency plans are being put into effect by councils following the news that construction giant Carillion has gone into liquidation.
Local services such as school catering, library management and general cleaning services provided under Carillion services were all reported being brought back in-house by councils.
Several councils have announced the implementation of contingency measures.
Library services in four London boroughs were brought back in-house, after Cultural Community Solutions Ltd, a Carillion subsidiary responsible for library services, stopped trading.
Croydon LBC was one of the first to announce it had taken libraries back in-house in order to “secure the long-term future” of its libraries.
Councillor Timothy Godfrey (Lab), cabinet member for culture at Croydon LBC, said: “The council has been considering its options over the past few months after it became clear that Carillion was running into difficulties.
“We are determined to protect and boost our libraries for residents now and for generations to come.”
Ealing, Harrow and Hounslow LBCs were also affected by the CCS libraries contracts.
Nottinghamshire and Oxfordshire CCs also announced measures to ensure that schools facilities management services - including school meals and cleaning - could continue.
Most of Oxfordshire’s contracts with Carillion are being transferred back to the county council early following an agreement made last July. A few facilities management services, involving the delivery of school dinners and cleaning services, were meant to continue under Carillion until the end of March. However, that agreement, which included the transfer of about 250 catering and cleaning staff, has now been brought forward.
A Local Government Association spokesperson said that “a relatively small number” of councils were affected by the collapse.
“They [the councils] have been monitoring the situation closely and are implementing contingency plans to keep services running as normally as possible,” the spokesman added.
“Councils are also working with other public sector partners in their local area to be ready for any wider knock-on effects of Carillion’s failure.”
Following failed negotiation with creditors over debts totalling £900mn and a pension scheme deficit of £580mn, Carillion stopped trading on Monday morning.
Backers refused to continue investing in the company after the government refused bail it out of its financial woes.
Carillion chairman Philip Green described today as a “very sad day” for the company’s employees and suppliers.