Carillion collapse left council with £13.5m defects bill

Oxfordshire County Council has had to spend more than £13m on fixing defects in buildings once worked on by Carillion.

The council found problems with dozens of schools that required remediation in the years following the company’s collapse, the BBC reported yesterday.

Carillion was the UK’s second-biggest contractor by turnover when it went under at the start of 2018, causing financial problems for multiple local authorities and subcontractors.

After the business folded, the council spent £13.5m on remediating 24 schools, the main fire station in Thame, and Didcot’s park-and-ride facility.

Carillion and the council had entered into a 10-year contracting deal in 2012, which included school building work and council building maintenance, as well as the provision of school meals. In total, the agreement covered 600 projects valued at around £148m.

The two parties had already agreed to end the contract early when Carillion went under, after which the council recommissioned the uncompleted work.

Following Carillion’s downfall, the council launched an audit of services provided by the contractor.

Surveys conducted as part of the audit identified a range of issues, including missing contract certification, building control certification, health and safety manuals, and operational maintenance manuals, as well as unsatisfactory fire strategies and unfulfilled planning conditions.

Carillion’s collapse prompted a wave of investigations into how it covered up its struggles in the lead-up to its demise, prompting the introduction of a new code of conduct for company directors last year.

The collapse also delayed substantial development projects at hospitals in Liverpool and the Midlands.

Last year, former Carillion chief executive Richard Howson was banned from being a director for eight years, shortly after the Financial Conduct Authority fined him £397,800 for “recklessly” publishing misleading accounts.

It also issued fines to two other former directors, and said it would have fined Carillion £37.8m had it not been in liquidation.

Carillion’s former auditor, KPMG, was last year landed with a £21m fine for its faulty auditing of the firm.

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