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Council uncovers major Carillion failings on £123m deal

Oxfordshire County Council has found a catalogue of failings including missing certificates and fire safety issues following an audit of work conducted by Carillion.

The council commissioned an assessment of services Carillion supplied in a 10-year contract with the authority worth £123m.

Its contract commenced in 2012 and covered 602 projects valued between £5,000 and £10m, including building maintenance and property services as well as school meals and cleaning.

The council cancelled the contract in summer 2017 and began transferring services back under the local authority’s control.

The audit, which was undertaken at a cost of £1.7m, is yet to finalise the total cost for remedial works, with those figures expected to be published next year.

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

The council report also stated that: “While the assessments have provided a sound basis for determining the immediate costs of rectification, given the scale and extent of the issues already identified, it is considered expedient to review these costs to confirm the overall capital provision required to fund the defects programme.”

Carillion’s collapse left work on 17 schools in the county only partially completed.

The council noted that it was exploring options to recover costs from “other contractors involved in the Carillion contract”.

The report said: “In the absence of the contractor, the council is taking on the responsibility for dealing with latent defects. The nature of these is unknown at this point, but where they occur, the council will assess what rectification work is required and manage its delivery.

“Several options for funding these costs have been considered, including insurance from third parties, enforcing the warranties of subcontractors involved in the projects, or provision by the council – in effect self-insurance.”

The authority is also involved in a legal dispute with PwC, which is acting on behalf of the official receiver to recover unpaid debts owed to Carillion for works prior to the firm’s collapse.

The council report stated: “Since March there has been a continuing discussion and exchange of correspondence relating to monies PwC claims are owed by the council.

“The council is in turn claiming the costs of rectification of project defects.”

An Oxfordshire County Council spokesman said: “The council’s audit and governance committee meets on 14 November to review progress in estimating the council’s financial liabilities that emerged following the collapse of Carillion.

“The council’s cabinet is expected to receive an assessment of the costs in coming months, along with a long-term plan for dealing with the problems identified in surveys.”

Readers' comments (2)

  • Surprise surprise
    Where were they in all this,who is running with this for the local authority.
    I’m sure all aspects of health and safety were all in place and correct though

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

    And meanwhile the exceedingly well paid Non-School employees at OCC (100 of them earn over £65,000) were doing what? Don't they have any accountability?

    Nothing in the list above is more important than the care of the elderly, the funding of education and the quality of life of rate payers in Oxfordshire.
    And you spent another £1.7 million pounds of taxpayers money to prove you are not doing your own jobs properly. I hope you didn't pay this £1.7m to any of the Big 4 auditors who were giving Carillion a clean bill of health.

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