Lovell takes over Connaught's social housing contracts

10 Sep 10
Social housing provider Lovell has paid £28m to acquire the majority of Connaught Partnerships' social housing contracts and assets, it was announced today
By Vivienne Russell 

10 September 2010

Social housing provider Lovell has paid £28m to acquire the majority of ConnaughtPartnerships' social housing contracts and assets, it was announced today.

Connaught’s social housing division provided maintenance services to housing associations across the UK. It went into administration on September 7, blaming its problems on the government’s public spending cuts.

The agreement with Lovell was announced this morning by Lovell’s parent company, the MorganSindall Group. It will allow essential maintenance work to continue without interruption. Under the agreement, around 2,500 of Connaught Partnerships’ 4,400 employees will transfer to Lovell.

John Morgan, executive chair of Morgan Sindall, said the acquisition represented a ‘step change’ for Lovell.

‘[It] significantly increases the scope and scale of our planned and reactive maintenance activities and further develops our market-leading position.

‘Our focus now will be to ensure a smooth handover of the contracts and to minimise disruption to essential maintenance services.’

Meanwhile, Connaught Partnerships’ joint administrators have confirmed 700 redundancies.

Brian Green, restructuring partner at KPMG and joint administrator, said: ‘Immediately following the appointment we conducted a commercial review of the staffing needs of the business and shortly thereafter took the decision to make around 700 staff redundant.’

Green added that the administrators are continuing to negotiate the future of remaining contracts and ‘remain hopeful that further staff with Connaught Partnerships will be transferred to alternative providers’.

The Trades Union Congress today warned that the spending cuts to be announced in next month’s Spending Review would mean further heavy job losses, which would not just be confined to the public sector.

TUC general secretary Brendan Barber said: ‘Spending cuts will cause further private sector job losses, not just because the state will buy fewer goods and services, but those who lose their jobs will stop spending too.’

But local government minister Bob Neill this week told Public Finance that he had not seen a ‘shred of evidence’ to suggest that Connaught’s collapse could be linked to the government’s spending restraints.

Also this week, military aircraft manufacturer BAE Systems announced 740 job losses caused by reductions in the Royal Air Force.

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