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Carillion liquidation places doubts over services in hundreds of schools

Stricken company delivers caretaking and cleaning services to hundreds of schools, provides 32,000 school meals a day, and had sponsored an academies trust

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Stricken company delivers caretaking and cleaning services to hundreds of schools, provides 32,000 school meals a day, and had sponsored an academies trust

Meals and services in hundreds of schools have been thrown into doubt today after news that troubled support services company Carillion has gone into liquidation.

The company delivers more than 32,000 school meals a day, according to its website, as well as facilities management to 875 schools, cleaning for 245 schools and mechanical, electrical and fabric maintenance services at 683 schools, and has sponsored an academies trust.

Carillion is also involved in PFI deals with schools. Today the chief executive of one of England's largest academy chains said he hoped the company's collapse would release schools from "ludicrous" PFI contracts. 

Ministers held crisis talks last week as they worked to ensure that contingency plans were robust.

Today it was announced that the company had gone into compulsory liquidation as talks failed to find another way to deal with the company’s debts.

Unions are calling for urgent reassurances over the jobs, pay and pensions of thousands of workers following the "disastrous" news that Carillion has gone into administration.

The stricken firm, which employs 20,000 workers across Britain, said crunch talks over the weekend aimed at driving down debt and shoring up its balance sheet had failed to result in the "short-term financial support" it needed to continue trading while a deal was reached.

Jon Coles, chief executive of the United Learning academy and private schools chaim said: "Hoping this morning that the collapse of Carillion allows a couple of schools to escape the ludicrous PFI contracts that currently burden them."

The Carillion Academies Trust has run two primaries in Tameside, Greater Manchester - Inspire Academy in Ashton under Lyne, and Discovery Academy in Hattersley, Hyde. But the trust recently seperated from the company.

The trust's annual report for 2015/16 shows it has have been given a £100,000 interest free loan by Carillion Services Ltd and that it paid the Carillion £72,370 for "facilities management support services" and £24,002 for school meals.

Today chief operating officer Nicky Wise said that the link between Carillion and the trust had ended in the last few weeks.

“We had been looking at the relationship between the sponsor and ourselves and discussion started in September about moving away from Carillion’s sponsorship and changing the name of the trust," she said. "Members have taken that resolution and we don’t have any formal link with Carillion anymore."

On Friday Discovery Academy sent children home with a letter saying that the trust had taken steps to “decouple from sponsorship over the last few weeks” and the trust was now known as the Victorious Academies Trust.

Carillion, which has been struggling under £900 million of debt and a £590 million pension deficit, has seen its shares price plunge more than 70 per cent in the past six months after making a string of profit warnings and breaching its financial covenants.

Its collapse poses questions as to why the group continued to receive government contracts despite issuing a number of profit warnings.

The government has urged staff to keep going to work and said "those already receiving their pensions will continue to receive payment".

Officials from several unions representing workers on the railways, construction sites, prisons, hospitals and schools are seeking information from the company and ministers.

Jim Kennedy, Unite's national officer for local government, said a public inquiry was now needed.

"Public services, vast amounts of public money, thousands of jobs - including in a lengthy supply chain of insecure agency workers who are also at risk - and workers' hard-saved pensions are all in danger of being dragged under by yet another bout of reckless corporate irresponsibility.

"Why did the government continue to hand over public money to a company that had issued repeated profits warnings?"

 

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