The impact of Carillion going into liquidation on Leeds City Council – update
Following the announcement today (Monday 15th January 2018) about Carillion going into liquidation, the council have been reviewing how this will affect the city, and what can be done to reduce the impact on people in the city.
The council is very concerned for the future of all those affected by the announcement. We are confident our contingency plans have been effective in the three main areas involved. These are:
East Leeds Orbital Road
Recently the council tendered a contract for the East Leeds Orbital Road and Carillion were the successful tenderer. However, the final contract had not been awarded and we will now review the tender process before determining how to proceed without Carillion.
The procurement process for ELOR identified Carillion as preferred bidder and we had robust mechanisms to protect us should there be any problems with Carillion, although as the contract was not awarded these were not required.
The Council is now looking at options regarding future procurement strategy for ELOR, which are likely to include using the existing procurement exercise to secure an alternative contractor or re-tendering.
The council has only one current contract with Carillion, the City Connect 2, City Centre Cycle Superhighway (Construction) with a value of around £4 million. To date about 20 per cent of works on the ground have been delivered, in line with the intended programme. The council is liaising with the staff and the Administrator to make sure the impact of Carillion’s situation is managed with the minimum of disruption to both the project, and all those involved. Again, the Council undertook a risk-based due diligence exercise and put measures in place to protect public funds and we are now looking at using these arrangements.
The works in and around the city centre are being looked at with key sub-contractors and suppliers (such as traffic management and fencing contractors) to ensure continuity, so safety around the work areas is not compromised. Highways and Transportation’s Direct Labour Organisation will also be used when necessary.
Leeds 7 Schools PFI Contract and Carillion
The council entered into the Leeds 7 Schools PFI contract in 2001, for the following schools:
• Lawnswood High School
• Roundhay High School
• Oakwood Primary Academy
• Hilltop Primary Academy
• Five Lanes Primary School
• Asquith Primary School
• Spring Bank Primary School
The PFI contract is with the Education Support Company (ESCo) who had contracted with Carillion to provide ‘soft services’, (including cleaning, catering, porterage) to all the schools listed above.
Given concerns over Carillion, the council and ESCo prepared contingency plans to ensure critical operational school services are maintained and that Carillion staff are able to work as normally as possible. We worked closely with ESCo, the Infrastructure Managers Limited, (IML) and each of the schools involved and can confirm staff arrived for work and were undertaking their duties as expected today.