Thousands of construction workers face losing their jobs after the collapse of a company responsible for maintaining huge numbers of council houses. Connaught, which employs 10,000 staff, called in administrators KPMG last night after bankers, who are responsible for the austerity programme, refused to give the struggling group more money: http://www.google.com/hostednews/ukpress/article/ALeqM5in44Cnux4QYR2Q5HttEIo3-d9kew
The Royal Bank of Scotland agreed to lend Connaught £15 million after bosses said it was struggling to meet debts, which stand at £220 million. But discussions between the bank and company broke down and the administration was announced last night.
Norwich City Council, with which Connaught had a £125 million contract - one of its biggest - has been forced to draw up contingency plans to maintain the city's 17,000 council houses and waste collection services. Councillor Judith Lubbock said: 'Connaught going into receivership is extremely worrying, especially knowing that there are elderly and vulnerable council tenants waiting for essential repairs to their heating and hot water.'
The council and housing association housing maintenance firm has been suffering a cash shortfall since announcing in June that 31 of its contracts with local authorities were under threat following the Coalition's austerity budget.
The potential for 10,000 job losses would make Connaught the most dramatic casualty of the Government cuts programme. At least 5,000 jobs in the group's social housing division are under the most direct threat.
Up to 150 councils and housing associations employ the firm to carry out repairs and its collapse risks causing huge disruption in maintaining council-owned and housing association homes across the country. Yesterday some councils said that subcontractors working for Connaught had not turned up for work, fearing that they will not be paid.
Go here to listen to Connaught workers: http://www.bbc.co.uk/news/business-11215985
See also "Call for probe into housing contract shambles" - Herald Scotland April 2009 http://www.heraldscotland.com/call-for-probe-into-housing-contract-shambles-1.906503
And UNISON's Mike Kirby says 'Chickens have come home to roost' in today's Herald http://www.heraldscotland.com/news/home-news/jobs-blow-as-housing-repair-firm-connaught-goes-bust-1.1053594
And http://unisonactive.blogspot.com/2009/10/public-works-quality-public-services.html
