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Revealed: Impact of Carillion collapse on local government

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At least 25 top-tier councils held major contracts with the contractor Carillion, LGC can reveal.

Of those, 11 contracts were related to major civil engineering works, eight were for school meals and cleaning services, four were for library management, while the remaining two contracts relate to ICT and road gritting.

Of those civil engineering works contracts, the majority were for road construction works, with many projects left for completion by subcontractors.

Somerset CC reported it remained in dispute with Carillion, which went into liquidation on Monday, over “major delays” to its completed ‘Northern Inner Distributor Road’.

David Fothergill (Con), Somerset’s leader, said: “Today’s announcement would seem to reflect the difficult relationship that we have had with them as a contractor.

“We… have repeatedly and robustly resisted its excessive and inflated claims for costs.”

Leeds City Council said it was “confident” that contingency plans for the £115m ’East Leeds Orbital Route’ had proven effective after signing a tender document with Carillion only one week before it went into liquidation. The council is also reconsidering its Carillion contract on a city centre cycle superhighway project, worth £4m and only 20% completed.

Harrow LBC was due to renew its Carillion-subsidiary contract for its library services at a cabinet meeting on Thursday but members will now need to rethink those plans.

Paul Walker, corporate director of community, recommended the renewal with a £485,000 break clause due to a “limited” market in the UK for library services management.

A spokesperson for Harrow LBC said: “Our priority is continuity in our library service and that is what we are working to achieve.

“Our commercial relationship with Carillion’s CCS, which run our libraries, was working well.

“We are now in intense discussions with Carillion and its liquidators PWC about the best way for us to deliver continuity for staff and residents who use these services.”

LGC reported yesterday how Carillion was responsible for libraries services via its subsidiary in the London boroughs of Croydon, Ealing, Harrow and Hounslow.

Most councils told LGC they had enacted contingency plans for their services to ensure the smallest break-down in delivery.

Oxfordshire CC said it placed firefighters on standby to distribute school meals to 18,000 children across the 90 schools involved. The emergency responders’ services were not needed, however, as the large majority of catering staff agreed to transfer to a council contract and keep working.

Representatives from Nottinghamshire CC, and Barnsley, Rochdale, South Tyneside, Stockport, and Tameside MBCs said school catering staff had accepted similar advice to continue working as normal.

Carillion reports responsibility for facilities management services at 875 schools, many organised under PFI contracts.

“We clean more than 468,000m2 of school accommodation in 245 schools and provide mechanical, electrical and fabric maintenance services to 683 schools,” Carillion’s website said.

Labour reported that Carillion held around 700 local government contracts around the country in a number of different sectors. 

 

 

 

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