Survival of Carillion crucial for Tameside
Saturday 12th August 2017 14:29 Business Community Denton & Audenshaw Education News Tameside Posted by Nigel P.

 

The recent and ongoing problems of Carillion, the construction and maintenance support firm has surely exercised a few minds at Tameside Council.

The company’s share price tumbled sharply three weeks ago and despite winning a government contract on the rail project HS2,they continue to struggle with refinancing.

Consequently the survival of the Wolverhampton based company is by no means certain.

The HS2 deal is said to be worth £450 million, but the payments for that contract will not start to flow until 2019.

In the meantime the firm has debts of £700 million and a pension shortfall for staff of £800 million.

The demise of a large company like Carillion (annual turnover 4 billion pounds) would be a blow for the construction industry nationally.

What then would it mean for the borough of Tameside being so entwined with the company should the worst happen and Carillion go into liquidation.

Carillion is of course Tameside Council’s preferred developer and it is not only facilitating major building projects such as the new council offices through Vision Tameside, it also provides school meals for thousands of Tameside children and manages and maintains, council owned buildings and schools.

Some of the schools are dependent on Carillion for remedial work that the firm must carry out on buildings the firm constructed and delivered, when some work was found to be unsatisfactory or problematic.

This has certainly been the case with Russell Scott School in Denton.

The school was built by Carillion and signed off two years ago, but it has been beset with problems, including sewage back flow and a once serviceable playing field which was deemed unfit for purpose.

Parents at Russell Scott school demonstrate the condition of the playing field following heavy rain last autumn(2016)

The field is now undergoing further work to restore it to it’s pre development condition.

When the new school was signed off, the field was found to be a metre higher than when work started and filled with rubble.

It has been suggested that for the level of the field to be higher than before the pre construction level, the rubble (that included small pieces of brick and glass ) must have come from other building sites and placed on the school’s playing field.

After the school was signed off, the field was simply topped with turf, but it has flooded with every major rainfall filling the adjoining paths and playground with a film of sludge.

Parents continually complained and in April work has begun to restore the field to its original state at a cost of £400,000 borne by the Council, the school and Carillion itself.

Work began in April to restore Russell Scott’s playing field to it’s former condition.

If Carillion did cease to operate what would happen to work such as this and the provision of school meals? and the still to be delivered building projects such as the new council offices in Ashton which will not expected to be completed for at least late Autumn?

We asked Tameside Council if in the event of such circumstances there was a contingency plan in place?

Tameside Council have so far declined to respond to our request.

Without any plans there are fears that the borough could be beset with chaos and increased expense at filling the gaps left by Carillion.

Not that Carrillion has necesarily proved value for money for Tameside in several areas of it’s operations.

The provision of school meals came in at 26 pence per unit more than central government gives to council’s to provide them.

This has meant that one school is is having to meet the difference with £16,000 from its own budget over the year.

It is understood that around 90 other schools across Tameside are having to meet a similar financial shortfall.

Carillion are said by Russell Scott’s governors to still owe the school £100,000 for energy costs incurred during the building of the new school.

It is fair to say that Carillion despite their global reach as a major player in construction and support services, has endured major criticism resulting from sub standard work across a range of contracts nationally.

In 2016 a petition containing 7,500 signatures was raised calling for Carrillion and fellow company Amey, to be stripped of their contract to maintain accommodation for Army personnel.

An MoD spokesperson speaking in 2016 said of both companies joint performance: “It is not acceptable that Carillion /Amey have fallen short of expectations”

Members of Pentonville prison board also criticised the firm who were charged with the maintenance of the ageing Victorian jail which was exposed as filthy and rat infested saying: “Carillion failed to respond in time to jobs.”

The dilemma for Tameside now is should it begin to divest itself from its exclusive relationship with Carillion and ask itself is it wise gong forward to have all the council’s eggs in one basket with one firm, on whom it depends too much.

Mr Bell has been critical over the lack of scrutiny of the deal between Tamesdide and Carillion.

Tameside Tory leader John Bell speaking of Tameside Council’s relationship with Carillion  said: “The problem with this deal is it cannot be monitored because there is no scrutiny committee holding it to account.

Therefore there is no way to ensure we are getting value for money and Carillion are delivering efficiently.

“Where is the accountability? We are including the back bench Labour councillors here, they do not know anything (more than the opposition).

Due to the lack of lack of transparency we get to know nothing.”

Carrilion’s share price points to continued concerns from the City, it currently stands at around 57 pence which is up from it’s recent low of 55 pence following the share’s dramatic fall from around 200 pence last month and a high of 434 pence six years ago.