Update on the County Council's response to Carillion liquidation
Photo credit: Oxford Mail
Following an announcement this morning that Carillion PLC had entered liquidation, the county council put contingency plans into action to ensure that services would continue to be delivered.
Read our initial response here and to find out more look at the FAQs at the foot of this page
Schools reported that staff came to work and had no issues feeding children. The county council sent a message via schools before the weekend to reassure Carillion staff that we would ensure they are paid, and asking them to continue working in the event anything happened to Carillion.
Oxfordshire County Council remains ready to step in to deliver lunches
Firefighters spent the day on standby to deliver lunches if needed and will remain on standby for Tuesday 16 January in case of any issues with staffing or food deliveries. However following contact with all of our suppliers the county council does not expect this to be necessary.
The county council ordered 500 packed lunches, which were not needed today and have been offered to homelessness charities. Of these 30 were donated to the Aspire charity in Oxford. The rest have been properly refrigerated by our caterers, with around half to be donated to the Pathways charity in Oxford and the remaining ready for schools use if required (if not they will also be donated to Pathways).
Cllr Lorraine Lindsay-Gale, Cabinet Member responsbile for Property, said:
“I visited Fire HQ in Kidlington today and saw that we were well prepared for Carillion’s collapse. I’d like to thank Carillion staff in our schools for coming to work as usual and making sure that children were fed, and their school cleaned. I know this has been a worrying time but I would like to reassure all staff that we will ensure they are paid. Thanks also to the fire service who were on stand-by though fortunate weren’t needed today.”
Response to national media coverage
In response to national media coverage we were asked why we had ended our contract with Carillion early.
Alexandra Bailey, Director of Property, Assets and Investment, said:
"In spring 2017 we decided to begin negotiations to end our contract with Carillion. We had concerns over their performance, particularly in respect of construction projects, but we also wanted to deliver a more ambitious agenda around property than the contract allowed.
“We worked on a mutual agreement with Carillion to end the contract but in a phased way, so services were brought back in house one by one, the first being construction.
“We had already agreed with Carillion to bring facilities management (including cleaning and school meals) back in house on 31 March 2018.
“It was only after we’d reached agreement with Carillion to end the contract that the company’s financial difficulties became clear, and this news helped to explain some of the poor performance we had experienced. We then accelerated the process of ending the contract and bringing services back in-house.
“That work will continue now that Carillion has been liquidated."
FAQs on Carillion
(updated 23 January)
What is the position with the council’s contract with Carillion?
On 22 January the county council announced it was termintaing its contract with the company as from 1 February 2018 - it had planned to terminate the contract at the end of June 2018.
The county council had signed a 10-year agreement with Carillion in 2012 to provide a range of services including key support services such as routine property management, facilities management, energy management and the design and build of capital works such as building new schools and new classrooms.
There were, however, some issues with the Carillion contract, particularly on the construction side. This was reported to the county council’s Cabinet in March 2017 and we intended to work with the company to address the problems.
Around the same time, our property strategy started to change and we worked on a mutual agreement with the company to end part of the contract, including school maintenance. That was announced in July 2017, and we said then that we would look at the remaining part of the contract, which included school meals and cleaning.
Following that review, we agreed with Carillion to end all remaining parts of the contract.
When the company’s financial position became clear, it helped to explain some of the performance issues we had. We then accelerated the process of ending the contract
Are your suppliers affected by this news?
Yes. Our immediate need has been in facilities management, to contact suppliers of school meals in time for lunchtime on 15 January, of which there are six main suppliers. We have since been contacting all other suppliers which includes those supplying cleaning materials to schools. We are covering all ongoing deliveries from 15 January, the date the company entered liquidation. Our message to suppliers has been to place their orders as normal, as it is business as usual. We cannot deal with any monies owed by Carillion for deliveries before that date.
How many schools have been affected?
The county council has 101 schools who are supplied school meals or cleaning services, or both through Carillion, to around 18,000 students.
Of these, 56 schools are maintained schools (i.e. council-run) and have an agreement with the county council to receive school meals, with the work sub-contracted to Carillion. Those contracts were due to be brought in-house, including staff, on 31 March 2018 but this will now happen from 1 February, as mentioned.
The other school meals contracts are directly with Carillion and cover both maintained schools and academies. Academies may decide to bring their staff in-house directly.
We are providing legal and HR advice and support, as appropriate, to affected schools and have set up advice lines and email contact addresses for schools to use.
What other facilities management has Carillion been providing for you?
The service has included some routine building maintenance which will also be transferred back to the county council.
What about construction and maintenance work at schools?
For those schools currently signed up with Carillion they are being advised to use Carillion’s help desk while they source other suppliers. This is available 24 hours a day and can be reached by calling 08081 566659 or emailing: firstname.lastname@example.org. The county council is providing assistance if schools need help in arranging an alternative maintenance solution.
You ended a large part of the contract last July. Are taxpayers having to pick up any costs?
There are no costs to the council tax payers of Oxfordshire arising from the early termination of contracts, then and now.
There is concern that pensions for Carillion staff may be affected. What is the position?
Many of the staff affected have Oxfordshire local government pensions which are not affected by the liquidation. We can’t answer for what will happen to Carillion and other third party pensions but the Government has now issued the following guidance:
“Anyone worried about their pension situation can ring The Pension Advisory Service (TPAS) on 0300 123 1047 for free and impartial guidance. TPAS has also set up a special helpline number for members of these pension schemes: 020 7630 2715. Those already receiving their pensions will continue to receive payment.”