Public sector looks for ways to plug gap left by Carillion

17 Jan 18

Councils around the country are scrambling to identify the full extent of their exposure to Carillion after Monday’s collapse of the construction and facilities management firm.

Everything from road building to school meals is affected as Carillion, originally a construction contractor, had branched into providing support services.

It collapsed having run out of money and the government refused to bail it out. The Official Receiver and administrators are liquidating Carillion.

Concerns already raised by councils showed the wide range of services hit.

Leeds City Council said it had implement contingency plans for building the East Leeds Orbital Road, where Carillion’s contract was not finalised, and was working Carillion’s administrators over the £4m city centre cycle superhighway, which was only 20% complete.

A PFI contract for Carillion to supply cleaning, catering, porterage to seven schools had seen contingency plans activated “and can confirm staff arrived for work and were undertaking their duties as expected today”.

Oxfordshire County Council took over Carillion’s school support services and urged staff to report for work normally, saying the council would ensure they were paid.

It said Carillion had supplied meals to 90 schools but this, together with school, cleaning, had anyway been due to transfer to the council on 31 March.

Parks were the problem at London Borough of Hounslow, where leader Steve Curran said Carillion’s contract to run parks, cemeteries and allotments had been due to end on 9 April when these services would transfer to a council-owned trading company, a step the council would now try to take earlier.

The London Borough of Croydon has ended its libraries contract with Carillion and plans to take the service in-house.

Sunderland City Council faces uncertainty over its flagship regeneration of the Vaux brewery site in a joint venture with developer Siglion.

A statement said the liquidator had stopped the project and the council was in talks to resume work as soon as possible.

Somerset County Council was in dispute with Carillion over delays to its Northern Inner Distributor Road and leader David Fothergill said news of its collapse “would seem to reflect the difficult relationship that we have had with them as a contractor”.

He added: “We remain in dispute with Carillion and have repeatedly and robustly resisted its excessive and inflated claims for costs. We also still have a substantial claim against Carillion for delays and will continue to pursue this.”

The Scottish Government said it would work with the two other firms building the Aberdeen Western Peripheral Route.

NHS Improvement also activated contingency plans, but said the NHS was “a relatively small customer of Carillion, with 14 trusts receiving services”.

Network Rail said it was working with the Official Receiver to ensure the continuity of its projects. 

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