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Government checks on associations potentially affected by Carillion collapse
The Regulator for Social Housing has been in touch with housing associations that could have been affected by the collapse of Carillion.
During a debate in parliament yesterday, David Lidington, minister for the Cabinet Office, said: “The Department for Housing, Communities and Local Government [MHCLG] has been in touch with those housing associations that we think might have been affected by the collapse of Carillion.
So far, we have not been alerted to any immediate difficulties, but this is something that the secretary of state for housing, communities and local government will be keeping under close watch.”
A spokesperson for MHCLG later clarified that the Regulator for Social Housing – the new name for the regulatory arm for the Homes and Communities Agency – was responsible for this work.
Today the government has announced the investigation into the company’s collapse will be fast-tracked and extended in scope to include previous directors.
Carillion Amey, a joint venture between Carillion and construction firm Amey, manages housing for military veterans on behalf of the Ministry of Defence. Amey has said it will continue the services itself.
In a statement, the company said: “Both legal entities get paid directly by our customers and we have our own banking facilities, therefore we have no concerns about our ability to continue to operate our businesses and our staff and suppliers will continue to be paid as normal.
“For the past few weeks, Amey has been working on detailed contingency plans with the Defence Infrastructure Organisation and the Cabinet Office to ensure we can effectively continue to manage our contracts and these are being implemented today.”
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In July 2016, the Public Accounts Committee found that Carillion Amey was “badly letting down” Armed Forces’ families by giving them “poor accommodation”.
Carillion went into liquidation yesterday morning, sending shockwaves across the sector. Northern Ireland’s housing authority has confirmed it will implement contingency arrangements for its heating services contract with the company.
David Linden, SNP MP for Glasgow East, said in the parliamentary debate that West of Scotland Housing Association is “in the process of transitioning its maintenance contract from Carillion to Robertson Facilities Management, so there is no need for its tenants to worry”.
Carillion has signed a number of joint ventures and development partnerships with councils, though the highest profile of these appear to be related to infrastructure – such as roads, prisons and hospitals – rather than housing.
Simon Underwood, business recovery partner at accountancy firm Menzies, said: “With a number of major infrastructure projects and large service contracts, Carillion’s liquidation could be complicated and messy.
“Despite news of the liquidation, it is unthinkable that Carillion’s liquidators would call a halt to operations immediately. We would expect the business to continue, potentially propped up by government or other funding.”
Update: at 15.00 on 16.1.18 This story was updated when the government clarified that it was the Regulator for Social Housing, not MHCLG, as David Lidington originally stated, that has been in touch with housing associations over Carillion.
