London council axes contractor
A London council has cancelled a multi-million pound repairs and maintenance deal, two months after the contractor was handed a warning to improve its service.
Morrison had been due to continue its work with Southwark Council, worth up to £9.5 million a year, until 2016. It is the second major deal the contractor has lost in the space of a week after a £3.8 million contract with Kensington and Chelsea Tenant Management Organisation was also terminated.
The Southwark contract will officially come to an end in October, when it will retender for its repairs and maintenance work.
‘This is not a decision that the borough has taken lightly,’ said Ian Wingfield, cabinet member for housing at Southwark. ‘But we feel that to move repairs performance on to the next level we need a new approach to service delivery.’
The council will put in place an interim contractor for one year from October, before procuring a longer-term deal in October 2013.
Mr Wingfield added: ‘It is very important to the council that any new repairs service is focused on residents and a new contract gives the council the opportunity to design the service around the customer.’
Morrison, which suffered pre-tax losses of £12.7 million in the first six months of the 2011/12 financial year, said it would bid for the new contract with the London council.
A spokesperson said: ‘We have enjoyed a positive relationship with Southwark Council over the last 12 years and we will continue to offer our full support, as well as contributing our ideas and experience during this procurement process. It will certainly be our intention to retender for this contract when it returns to the market.’
In January, Birmingham Council also threatened to ‘reconsider’ a five-year contract with Morrison after just two years unless there was ‘a significant improvement’ in its performance.