Thursday, 18 January 2018

Why the left has always been right to oppose PFI deals for public infrastructure and service provision

I worked for Llew Smith, the now retired left wing Labour MP for Blaenau Gwent for 20 years, and did the background research for all his speeches in Parliamentary debates. Here are some of his critical views on  PFI contracts. They embody some of the reasons he and Jeremy Corbyn so often voted against the Blair/Brown-led  Labour Governments so many times - because New Labour was so wrong in deferring disaster to future  generations, while taking the plaudits for public provision in its obsession with  indiscriminate PFI contractorisation.

I think in light of the Carillion catastrophe, Mr Smith’s speech is worth republishing

10 Feb 1999 : Column 287

Private Finance Initiative

12.59 pm



Mr. Llew Smith (Blaenau Gwent): When my right hon. Friend the Member for Camberwell and Peckham (Ms Harman) was shadow Health Secretary, she stated:


"When the private sector is building, owning, managing and running a hospital it has been privatised".

I agree with that sentiment. Many organisations that I shall mention later in my speech have said that that position has been realised by the implementation of the private finance initiative, under which public facilities are owned and run by private-sector companies that either lease them back or charge the public authority for providing the service.

Some time ago, Unison, which is the largest public service trade union and has considerable expertise on the subject, warned that the PFI was the latest Conservative scheme for privatisation and argued:


"Under the PFI the private sector pays for replacing or refurbishing public assets, such as computer systems or a new hospital, and is given a very long contract to operate the assets or to run the associated services and the jobs involved are transferred to the private company. The private sector recoups the money it has spent through a charge for the services it provides."

We have heard the views of my right hon. Friend the Member for Camberwell and Peckham and of Unison, the major trade union within the public services. Will Hutton, the editor of The Observer, has done considerable research on the subject. He concluded that the


"PFI is becoming the means of literally privatising the state"

and called for


"it to be scrapped".

So there is unity and agreement between my right hon. Friend the Member for Camberwell and Peckham, Unison, the editor of The Observer and me. That is quite an achievement on a Wednesday morning.

As someone who is neither old nor new Labour, but just Labour and who represents Blaenau Gwent, the birthplace of the national health service, I would have expected a Labour Government to scrap the PFI, which, understandably, was introduced by the Tory Government, who hated the idea of public service. Yet instead, the present Government are increasingly putting our future into the hands of PFIs.

Other Opposition parties also supported Labour's position in opposition and in government. Surely a Labour Government, whose party constitution describes itself as "Democratic Socialist", should value public services and seek to extend their role in society, recognising that they enhance life chances in communities such as mine.

If the Minister is not willing to accept the views of my right hon. Friend the Member for Camberwell and Peckham, Unison, Will Hutton or me, perhaps he will accept the report of the Treasury task force on PFI, which states:


"The PFI transforms Government Departments and Agencies from being owners and operators of assets into purchasers of services from the private sector. PFI firms become long term providers of services rather than simply upfront asset builders, combining the responsibilities of designing, building, financing and operating the assets in order to deliver the services demanded by the public sector."

10 Feb 1999 : Column 288


Given the views of such a wide group of people and organisations, it is not surprising that the Trades Union Congress also condemned PFI in principle, instructing


"the General Council to campaign for the ending of PFI . . . and to press the Government to reinstate proper capital funding to ensure the future infrastructure of the public services in a way that does not damage jobs and services."

Indeed, I remember a Labour policy document in 1995 describing PFIs as "creeping privatisation" and, as always, I support the position of my party. However, now it appears that the PFI is being presented as some kind of miracle cure to overcome the problems of financing our public services.

Peter Riplett, former group economist of Tarmac [Now Carillion- DL]and hardly a member of the hard left, or even the campaign group, recognised that


"the initiative will cost taxpayers much more in the long term than the traditional system of paying for the public investment, either out of current tax revenues or from borrowing".

The reason is obvious. The cost of obtaining the funds from the private sector will not be as low as the Government could borrow from the national loan fund which comes with Government guarantees, is backed by tax revenues and borrowing and is inevitably and intuitively the cheapest way of raising funds.

Once again, if the Minister rejects my opinion and that of Peter Riplett, perhaps he will listen to Graham Watts of the Construction Industry Council, who estimated that an average hospital project could cost the final selected bidder as much as 4.3 per cent. of the total project value. As I said, that is because it costs far more for the private sector than for the public sector to borrow money because of higher interest rates and the need to make a higher rate of return.

The financing of the PFI can also have serious implications for public bodies such as local authorities. That was recognised in the Audit Commission report entitled "Taking the Initiative--A framework for purchasing under the Private Finance Initiative". It discusses the long period of contract in PFI on public bodies and argues that it could


"restrict the future flexibility of the body to determine the way the services are provided".

It continues:


"Not only is this commitment likely to limit the ability to switch resources in the future but, in the event of the need to cut spending, the PFI contract payment is likely to be protected from any cutbacks. The corollary is that non-PFI expenditure may have to carry proportionately deeper cuts."

Putting aside all those criticisms, we are expected to believe that the PFI was intended to be additional to public provisions, yet the Tory Government left us in no doubt that they intended to substitute for publicly financed capital expenditure, enabling them to cut the capital budget.

It is not surprising that the Treasury Committee concluded:


"In our view the PFI is now being treated by the Government as substantial. It is enabling the Government to cut capital budgets in future plans."

As that was the conclusion of the Treasury Committee in respect of the Tory Government, how could the position be different under the present Government, who for their first two years in office have retained the same public expenditure plans?

10 Feb 1999 : Column 289

Let us be in no doubt that the PFI is not providing a public service; it is about making money and profits by cutting the service provided or the costs involved. For example, eventually fewer staff are employed--on inferior pay and conditions. New staff are not protected by the agreements that applied previously.

Allyson Pollock, in an article published in the British Medical Journal, states that her research shows that PFI


"schemes are characterised by a marked reduction in available bed capacity of about 25 to 30 per cent."

An example of the deterioration in service was given by Will Hutton, who stated in The Observer:


"PFI hospitals have adopted very high throughput ratios to compensate for their dramatic bed reductions that imply no spare capacity whatsoever."

The Welsh Institute for Social Health and Care recently produced a preliminary examination of three PFI projects in Wales including the new hospital at Mount Pleasant, Chepstow, in the constituency of my hon. Friend the Member for Monmouth (Mr. Edwards). It stated that a private consortium was chosen to design and build the facility on the sight of the former Mount Pleasant hospital. The trust granted the consortium a peppercorn lease for the land and paid an advance capital sum of £3.2 million to the consortium in order to reduce the annual revenue cost of renting the facility. Without that capital advance, the annual charge would have been £1.2 million. With the advance, the consortium will receive £756,000 per annum, to make the facility available.

The report went on to say that, as part of the overall deal, the NHS was able to release land--27 acres in all--at St. Lawrence hospital and at Mount Pleasant hospital. By selling the land directly on the open market, the NHS was able to make £440,000 per acre. Consequently, that cash was available to the national health service.

The report said that the outline building case for the new build at Mount Pleasant estimated that the cost would be £13.7 million to provide an 84-bed unit with minor treatment, X-ray, community deal and out-patient facilities. Thus--this is the important point--the income from the land sold, which was equivalent to £11.8 million of the assumed capital cost of the public sector comparator, would have financed 86 per cent. of the new build cost if the trust had been allowed to retain it.

The scheme therefore did not have to take the PFI route to acquire most of the necessary capital funds, as the land equity was almost sufficient to provide them. Moreover, under the rules currently operating in the national health service, most of the income--less the £3.2 million advance payment--was forwarded to the Welsh Office, presumably to be used in other parts of the NHS. The Welsh Office should examine that practice, and consider changing it.

Before entering the Chamber today, I was speaking to a fellow hon. Member, who approached me and said that a school in his constituency was being built under the PFI. He said that the project's legal costs were about £45,000. His community did not benefit from that money, although I suppose that the lawyers did. The people in his community lost a benefit, as two teachers could have been employed with that £45,000. The Labour Government--who have a different set of priorities from the previous

10 Feb 1999 : Column 290

Government--must appreciate that £45,000 spent on two teachers is better than the same sum paid out to a set of lawyers.

Loss of accountability is another problem with the PFI. Often, information on PFIs is withheld because of excuses of commercial confidentiality. We all know that commercial confidentiality is often used as an excuse in preventing the public from finding out what is happening in certain areas.

If there is a problem with a PFI contract, who will be responsible for dealing with it, especially if the firm originally involved in the project and holding the equity is sold on to another company? Accountability is affected also if a council's cash and other assets are transferred to a company gaining control of a PFI project. For how long will contracts be monitored, especially if a council has lost many of its own staff to the company taking over a PFI?

Why have successive Governments been so eager to support the PFI? Unison and the Welsh Institute for Health and Social Care agree that there are two main reasons for the support. The first is the requirement to reduce the public sector borrowing requirement, so that we can meet the Maastricht criteria. Governments hope that the PFI will remove investment from the public sector balance sheet. Therefore, as a community, we are expected to forgo services so that we may fulfil the Maastricht criteria. It is therefore not surprising that some hon. Members continue to oppose Britain's entry into the single currency.

The second reason for Governments' support of the PFI is their desire to introduce market-type incentives into public services, as a means of improving productivity. Most people welcome improved productivity. However, the type of productivity increases that I have mentioned today and that has been documented by many researchers in hospitals and other establishments receiving PFI funding has been achieved only to the detriment of the person--the patient, for example--using the service.

I should like to think that all the concerns expressed by the organisations that I have mentioned today are unfounded, but I do not believe that they are. My position is identical to the position taken by Labour in 1995, when we said that the PFI was equivalent to "creeping privatisation". I therefore support the TUC's campaign to end the PFI.

I want a Labour Government who defend public services and believe in the concept of service. Public services enhance the life chances of our communities, and not the life chances of a few people who think of public service as a way of making money--profits--at the community's expense. We are asking the Government to put people before profit.

Tuesday, 16 January 2018

Carillion: too greedy to succeed

On 18 November 2014 the then Coalition Justice Secretary, Chris Grayling MP, made a dry written statement to Parliament on ‘Prison Competition and Efficiency. It was barely noticed, and politics moved on.

He told Parliament “In November 2012 the Government announced the start of a new programme of work to drive down costs across prisons in order to deliver value for money for the taxpayer, accelerate cost reductions, maximise savings and to improve outcomes without compromising public safety. The programme included applying a new public sector staffing benchmark that had been developed by the Prison Service in competition with private sector bidders during prison competition phase 2 and the competition of ancillary and through-the-gate resettlement services in public sector prisons.

This approach allows HM Prison Service to focus on core custodial functions, with private and third sector partners adding their expertise and experience by delivering efficient and innovative ancillary and resettlement services.

In June 2013 we announced a competition for the management of a range of works, maintenance and facilities management services in public sector prisons. The competition was formally launched in January 2014, and included: maintenance; works and building projects; management of prison stores; waste disposal and collection; energy and environmental management; cleaning; and escorting of contractors and their vehicles.”

He then stressed: “I can today announce the outcome of the competition. After a rigorous evaluation of bids, Amey and Carillion have been selected to run the services across four geographical areas. (emphasis added)

These are:

Lot 1. Amey—North East, North West, Yorkshire and Humberside

Lot 2. Amey—East Midlands, West Midlands, Wales

Lot 3. Carillion—East of England, London

Lot 4. Carillion—South West, South Central, Kent and Sussex

He concluded: “We intend to award five year contracts, with expected savings from these contracts in the region of £115 million over that period. This represents an impressive saving for the taxpayer. We expect the new providers to start delivering these services on 1 June 2015, following a period of mobilisation. Robust arrangements will be in place to manage the new contracts.” (Hansard, Column 7WS)

Two years later the Carillion Annual Report 2016 included the following paragraph

Our risk management framework


The Group’s policy is to ensure that all risks are identified, evaluated and an appropriate response determined prior to any

commitment being made to any other party.

This policy is supported by clear guidance on process and procedures, risks that are unacceptable to the Group and practical guidance for the management of risk at all levels throughout the business.  (emphasis added)


The Board continues to be responsible for determining the Group’s risk appetite in pursuit of its strategic objectives and for maintaining a robust system of risk management (including regular reviews of principal risks)

to mitigate any potential impacts associated with these  risks.


Our principal risks Group’s principal risks are analysed on a gross and net risk basis The occurrence of the above risks could have a significant impact on the ...

Operational risk management – Carillion

Our risk management process

The Group has a long-established process and methodology for the identification, quantification, monitoring and management of the principal

It concluded: “During 2016, the Group has maintained its comprehensive

approach to contract management and there has been no change in the nature of contracts being delivered by the Group.” (emphasis added)

The Annual Report outlined the following glowing future for the conglomerate:

Performance in line with expectations

·         Total revenue growth of 14 per cent, primarily organic

·         Performance led by growth in support services

·         Support services contributed over two thirds of total operating profit and more than offset expected reductions in profit from Public Private Partnership projects and Middle East construction services

·         Underlying operating margin lower as expected at 4.9 per cent (2015: 5.3 per cent)

·         Underlying profit from operations fully cash-backed – cash conversion 117 per cent

·         Net borrowing of £218.9 million at 31 December 2016 (2015: £169.8 million) and average net borrowing for 2016 of £586.5 million (2015: £538.9 million) with the increases mainly reflecting adverse movements in foreign exchange rates

High quality order book and strong pipeline of contract opportunities

·         £4.8 billion of new orders and probable orders in 2016 (2015: £3.7 billion)

·         High-quality order book plus probable orders worth £16.0 billion at 31 December 2016 (2015: £17.4 billion)

·         Revenue visibility for 2017 of 74 per cent (2015: 84 per cent for 2016)

·         Expect over £1.5 billion of revenue from framework agreements not yet included in orders, probable orders or revenue visibility

·         Substantial pipeline of contract opportunities worth £41.6 billion (2015: £41.4 billion)

Proposed full-year dividend increased by one per cent to 18.45p (2015: 18.25p)

Strategic review

Chief Executive’s strategic overview

Building trusted relationships with customers and using all our resources and skills in an integrated way helps us to win high-quality contracts and deliver services safely, sustainably and to best-in-class standards.


As one of the UK’s leading support services companies with a substantial portfolio of Public Private Partnership projects, extensive construction capabilities and a sector-leading ability to deliver sustainable solutions, Carillion offers a wide range of services across markets in the UK, Canada and the Middle East.

This wide range of expertise enables the Group to provide bespoke, integrated solutions for buildings and infrastructure, from project finance through design and construction to life-time asset management, together with business support services that add value for our customers and the communities in which we operate.

In several key markets the Group performed well, notably in a number of our support services sectors in each of our geographies, while trading conditions in construction markets in the Middle East and in Canada, continue to be challenging.

In order to continue building a business that delivers sustainable, profitable growth, we have refined our strategy to focus on

  • winning high-quality contracts in our chosen markets
  • delivering contracts safely, sustainably and to best-in-class standards
  • developing and attracting excellent people and capabilities

Priorities for 2017

Our priorities for 2017 are to accelerate the rebalancing of our business into markets and sectors where we can win high-quality contracts and achieve our objectives for margins and cash flows, to manage the positions we have in challenging markets and to begin reducing full-year average net borrowing.

To accelerate the rebalancing of our business, we will become even more selective when choosing the contracts for which we bid and continue adapting to trends in our geographies and markets in order to focus on new and growing opportunities, such as those we expect in our infrastructure markets in the UK and Canada. To reduce full-year average net borrowing we will maintain strong cash generation, with an increased focus on managing working capital, and review the allocation of capital and other resources across the Group, which will also support the rebalancing of the business.

As always, there are risks and uncertainties, details of which are set out on pages 32 to 37, that may affect our ability to deliver these priorities. However, we have a strong and committed management team whose personal objectives and performance related remuneration have been specifically set to support the delivery of the Group’s priorities for 2017.

And here is how a tiny number of opposition MPs attempted to scrutinise Carillion contracts in Parliament in the past year.


Asked by Jon Trickett


Asked on: 05 January 2018

Cabinet Office




To ask the Minister for the Cabinet Office, when the position of Crown Representative to Carillion was vacant during the last 12 months.


Answered by: Mr David Lidington

Answered on: 10 January 2018

This Government recognises the importance of managing relationships with Strategic Suppliers and their performance on a cross-Government basis, and has developed a range of strategies to do this, including the use of Crown Representatives.

The role of Crown Representative for Carillion was vacant for three months between August and November 2017. During this period, the Crown representative responsibilities were covered by the Government’s Chief Commercial officer and the Cabinet Office Director of Markets and Suppliers


Asked by Jon Trickett


Asked on: 23 November 2017

Cabinet Office




To ask the Minister for the Cabinet Office, what risk was identified during the procurement process that identified Carillion as a service delivery contractor to (a) the operation of public services and (b) value for money of the potential effect of Carillion plc going into administration.



Answered by: Caroline Nokes

Answered on: 28 November 2017

It is the responsibility of the Contracting Authority to ensure it is compliant with EU procurement legislation during any procurement process. Contracting Authorities will assess the risk of appointing any given supplier, and this will be tailored to the requirements of the specific procurement.




Asked by Jon Trickett


Asked on: 22 November 2017

Cabinet Office




To ask the Minister for the Cabinet Office, whether a Crown Representative has been assigned to Carillion.


Answered by: Caroline Nokes

Answered on: 28 November 2017

As Carillion is a strategic supplier to Government, they have been assigned a Crown Representative.


Asked by Imran Hussain

(Bradford East)

Asked on: 10 November 2017

Ministry of Justice

Prisons: Repairs and Maintenance



To ask the Secretary of State for Justice, whether he has plans to review the prison maintenance contracts with GEOAmey and Carillion.


Answered by: Mr Sam Gyimah

Answered on: 23 November 2017

We are currently engaged in a joint review with providers and key stakeholders, to consider what changes in the current FM contract arrangements are required to deliver an improved service to HMPPS. Detailed design solutions are being reviewed by a Steering Group, composed of senior managers from the organisations involved, with a view to implementing changes which should result in a more responsive reactive maintenance provision, as well as improvements to the systems and processes required to manage the contracts effectively.

In the interim we continue to manage and monitor performance closely through the current contractual processes.


Carillion:Written question - HL1335


Asked by Lord Stunell

Asked on: 05 September 2017

Department for Transport




To ask Her Majesty's Government what discussions they have had with representatives of (1) HS2 Ltd, and (2) Carillion, about the use of discrete project bank accounts in relation to Carillion's HS2 contract, with regards to the protection of SME sub-contractors from late payments.


Answered by: Lord Callanan

Answered on: 14 September 2017

I can advise that the Department for Transport has not had any discussions with either HS2 Ltd or Carillion regarding the use of discrete project bank accounts in relation to HS2 contracts.



Asked by Lord Stunell

Asked on: 05 September 2017

Cabinet Office




To ask Her Majesty's Government what assessment they have made of the current financial situation of Carillion; and what consideration they have given to mandating the use of bank accounts in England for public infrastructure projects in order to protect smaller sub-contractors on such projects.


Answered by: Lord Young of Cookham

Answered on: 14 September 2017

The Cabinet Office tracks the financial status of all of HMG’s Strategic Suppliers and manages risks accordingly. Carillion plc is a Strategic Supplier to Her Majesty’s Government, publicly listed company and is required to comply with all rules and regulations of the London Stock Exchange. We are expecting the company to be publishing its half-year results on the 29th September.

The Government Construction Strategy, as set out by the Infrastructure and Projects Authority (IPA), does not mandate the use of Project Bank Accounts (PBAs) in England for public infrastructure projects. However, the policy states they are recognised as an effective mechanism for facilitating fair payment to the construction supply chain and that departments have committed to use them unless there are compelling reasons not to do so. The use of PBA’s can be found in the Government Construction Strategy, which can be found here:

Government Construction Strategy (PDF Document, 518.42 KB)



Asked by David Hanson


Asked on: 10 July 2017

Ministry of Justice

Prisons: Repairs and Maintenance



To ask the Secretary of State for Justice, what the cost was of contracts tendered out for prison maintenance by (a) prison and (b) private sector service provider in each year since 2010.


Answered by: Mr Sam Gyimah

Answered on: 18 July 2017

It is right that prison repair work is carried out in a timely and effective manner to ensure public protection. We always work to ensure we achieve value for money for the taxpayer and keep our costs under review.

The most recent applicable data available for the period requested is from 2012, when Mitie Care and Custody Ltd took over the provision of facilities management (FM) at HMP Brixton, later expanding to cover three sites. Until June 2015, FM services at the rest of the public-sector prison estate was delivered in-house by Her Majesty’s Prison and Probation Service (HMPPS). Since then, it has been delivered by Amey Community Ltd and Carillion Plc.

Below is a breakdown of the applicable tendered fixed costs for each of the three private sector service providers broken down by year as requested. These contracts were tendered on a ‘lot’ basis and as such costs are not broken down by establishment. The number of establishments/sites within each package has been included below for completeness:

Custodial Facilities Management: Tendered Fixed Costs (Excludes Indexation and variable works)
Mitie Care and Custody
Lot C: Various: 3 Sites
Amey Community Limited
From June 2015
Lot E: North East, North West, Yorkshire Humberside: 34 Sites
Lot F: East Midlands, West Midlands and Wales: 27 Sites
Carillion PLC
From June 2015
Lot G: South West, South Central, Kent & Sussex: 32 Sites
Lot H: Greater London and East of England: 22 Sites


Asked by Jo Stevens

(Cardiff Central)


Named Day

'Named day' questions only occur in the House of Commons. The MP tabling the question specifies the date on which they should receive an answer. MPs may not table more than five named day questions on a single day.

Asked on: 22 February 2017

Ministry of Justice




To ask the Secretary of State for Justice, whether her Department carried out an impact assessment in the effect outsourcing repairs and maintenance in prisons to Carillion would have on the amount of work available to prisoners.


Answered by: Mr Sam Gyimah

Answered on: 27 February 2017

Owing to the variability of work available to prisoners across over 100 individual prison establishments, it was not possible to undertake an impact assessment on the effect on the amount of work available to prisoners prior to the contracts being implemented.

However, we have ensured that the contract with Carillion requires them to maximise the use of prisoner labour, subject to local security strategies agreed with the Governors for individual establishments. The specification for Prisoner Labour and Prison Industries in the contract requires Carillion to utilise as much prisoner labour in the delivery of services as was used prior to the contract coming into force.

Under the maintenance contract Carillion are told how many prisoners are available for work on a daily basis and are required to provide the necessary support and supervision resource to oversee the work of the prisoners.



Asked on: 07 December 2016

Ministry of Defence




To ask the Secretary of State for Defence, whether the Defence Infrastructure Organisation (DIO) has reimbursed CarillionAmey for the purchase of 3,000 boilers approved by DIO to ensure winter boiler breakdown requirements are met in accordance with key performance indicators; and if he will make a statement.


Answered by: Mark Lancaster

Answered on: 12 December 2016

The Defence Infrastructure Organisation (DIO) has not reimbursed CarillionAmey for the purchase of any boilers. The replacement of 3,000 boilers has been directly funded by DIO under a capital works life cycle replacement programme and are scheduled for replacement in Service Family Accommodation (SFA) by March 2017. Approximately 1,000 boilers have already been replaced under this programme.

This is in addition to approximately 1,000 boilers being replaced by CarillionAmey as part of the National Housing Prime contract. Boiler replacement is a core service under this contract and thus will be paid for under the normal contractual arrangements.

By the end of Financial Year 2016-2017 approximately 5,585 SFA boilers will have been replaced in total under the above works.

In line with previous years, DIO is monitoring closely the heating situation within SFA during the winter months to ensure any potential problems are identified and resolved quickly.


*The Cabinet Office's top brass officials gave oral evidence  to the Public Administration and Constitutional Affairs Select Committee on 15 January  2018 , and were grilled on Carillion contract mismanagement. It was like a scene from Alice in Wonderland!

Witnesses: Sir Jeremy Heywood, Cabinet Secretary, John Manzoni, Permanent Secretary, and Rupert McNeil, Chief People Officer, Cabinet Office

You can start from the beginning  at:

And here are two construction sector business press articles on Carillion, which were not being watched properly by decision makers.

Tenders open for £12bn government FM framework

Construction  News, 9 January, 2018

The Crown Commercial Service (CCS) is inviting tenders for its new £12bn facilities management framework.

The deal will replace the previous £4.1bn FM framework that was set up in 2015 and is due to expire in July 2019.

It will run from May 2018 to May 2020, with an option for it to be extended up to 2022.

CCS expects government departments, including the Ministry of Defence, the NHS and central and local government, to procure as much as £12bn of work through the framework, with individual contracts worth as much as £1.2bn.

The deadline for tenders is 12 February and a spokesperson for the CCS said it plans to announce the successful bidders in May, when the framework becomes operational.

Unlike its predecessor, the new framework is open to joint ventures and consortiums.

CCS said it has had a number of enquiries from companies interested in delivering services through such arrangements.

However, the client added that any JV or consortium will need to have a lead partner or be a new legal entity if it is to deal with the CCS.

The previous framework featured a number of major construction companies.

Carillion secured places on all three lots, while Amey, Bouygues, Galliford Try, Interserve, Kier and Mitie also won places.

The new deal covers hard FM, encompassing building and infrastructure works, as well as soft FM, comprising services for personnel and organisations.



Carillion named on £4.1bn government services framework

Construction News, 10 August 2015

Carillion has been selected for all three lots on a new government services framework worth up to £4.1bn over the next four years.

Carillion was selected alongside Emcor UK and Sodexo for all three lots of the new facilities management service agreement, designed to save the government more than £200m up to July 2019.

In total, 16 other suppliers secured one or more lots on the new framework, which includes total facilities management, hard facilities management such as mechanical and electrical maintenance, and soft facilities management such as cleaning and security.

It is hoped that the new framework, through which the government expects to spend between £1.3bn and £4.1bn, will create a more efficient and simplified system for public sector customers accessing facilities management.

They do not have the management to run the MOD estate, how will they manage this one?