Carillion liquidators demand local authorities pay 20% and maybe up to 70% extra for company’s contracts

“Councils with Carillion contracts are being hit with steep new charges in the wake of the outsourcing giant’s collapse, HuffPost UK can reveal.

PWC, which is overseeing Carillion’s liquidation, is demanding local authorities stump up on average 20% extra for contracts such as library services and construction work as the Official Receiver attempts to claw back the firm’s losses, according to the Local Government Association (LGA).

It is understood town hall chiefs are now scrambling to take services back in-house amid fears that bills for ‘weekly charges’ and ‘contributions to overheads’ could climb by up to 70% in some cases, the LGA said. …

The LGA, meanwhile, has urged ministers to intervene, underlining that cash-strapped councils can ill afford the price hikes.

Bosses at London’s Ealing Council have told HuffPost UK the authority has already taken its £2m contract with Carillion for library services back in-house. The alternative was closing libraries, they said.

“We did receive a figure from PWC suggesting a weekly charge for running the library service, including a ‘contribution to overheads,’” said a council spokesman.

“We are waiting on their latest figures and clarification of how they have been calculated. In order to secure the most efficient, value for money and high-quality library services for residents and the future of the service, the decision was taken to bring the service under the direct control of the council.”

The council is withholding payment, saying PWC must spell out how the charges were calculated.

PWC said new charges reflected the cost of the work, but stressed that councils can contest them.

It is thought around 20 top tier councils had contracts with Carillion, for services from major civil engineering works, school meals and cleaning services to library management, ICT and road gritting. …

Carillion, which had public sector contracts worth £1.7bn and employed 20,000 British people, went into liquidation in January after a major profits warning last year.

The group’s portfolio included providing school dinners, cleaning and catering at NHS hospitals, building HS2 and maintaining 50,000 army base homes for the Ministry of Defence. It folded with a reported £5bn of liabilities and just £29m left in cash.

Its directors will face MPs on Wednesday to explain, among other things, why shareholders continued to be paid while there was a pension deficit of £587m and how the firm’s finances were allowed to deteriorate so rapidly.

A spokesman for the LGA urged councils facing new charges to make a “pacy transition to new arrangements” as ministers had confirmed the extra charges would be 20% and could climb higher.

“Some councils have raised concerns about being charged substantial increases in contract fees by the Official Receiver,” he said.

“We raised this issue with central government who have advised that all customers will be required to pay more than the contract price with Carillion to reflect the direct cost for ongoing provision of service including support functions. This additional cost is estimated to be around 20% although it is likely to increase as contracts are re-let or taken in house.

“We have advised councils that a pacy transition to new arrangements is likely to be the best way to minimise exposure to escalating costs.”

It comes as the Official Receiver announced a further 452 jobs will be lost – bringing the grim total to 829 – in the wake of the firm’s collapse in January. …

“It’s not just the fact so many are being made redundant – it’s the callous way PWC are going about it which is so outrageous.

“Some people received emails on Saturday simply telling them not to bother turning up for work on Monday.

“Others have been given less than a day’s notice.

“And the ones that still have a job are in limbo – like some horrific zero hours contract they turn up to work each day not knowing if they’ll still have a job at the end of the day.

“Both the Receiver and PWC must follow proper procedure and consult over redundancies.” The Official Receiver insisted it began consulting with employers as soon as the company went into liquidation.

A spokesman for the Official Receiver said: “In his role as liquidator of Carillion, the Official Receiver is independent of government. “He is required to ensure the costs of providing ongoing services for Carillion’s customers are covered during this interim period before contracts are sold or transferred to new providers.

“The amounts being charged for ongoing provision of services are being forecast on a regular basis. “Where customers can show that the uplift being charged is wholly unrepresentative of the current cost, the Special Manager will review those charges to ensure that an appropriate amount is charged. This is already occurring in some cases.”

A Government spokesman said: “Government is providing funding for the official receiver to minimise the impact on public services. “The collapse of the company does not threaten the viability of councils who held contracts with Carillion, and we are monitoring the situation closely to ensure this remains the case.”

Business Secretary Greg Clark has previously called for the Insolvency Service’s investigation into Carillion’s collapse to be fast-tracked. “

A retired East Devon staff nurse writes …

Save Our Hospital Services East Devon Facebook page:

“I worked as a staff nurse in the East Devon community hospitals. From 1986 -2005 gradually the number of beds were eroded and reduced, staff restructuring reapplying for their own jobs, management reorganisation after reorganisation, closure of elderly confused units at Seaton and Sidmouth areas, the gradual care in the community increased, far less respite care for stressed and fatigued careers often elderly themselves. The patients were on the whole admitted for medical surgical social and rehabilitation were thus releasing beds in the acute sector ie RD& E, Bristol and other areas in the Uk.

I doubt that the passage of time has seen a huge increase in Care in the Community just a huge reduction of service to save vital funding and line manager‘s pockets – let’s just think about the impact about the closure of the said beds and the amount of money raised by the League of Friends who paid for buildings, staff equipments and legacies from patients used to advance staff s professional development.

A really talented experienced Ward Sister/Manager tried to implement the setting up of a chemotherapy unit at Seaton hospital – it never happed but would have benefitted extremely ill patients, keeping them close to their communities and lessens the workload at RD&E.

It saddens me greatly that these very vital hospitals providing the core of what nursing stands for are no longer available to those greatest in need.

We have seen what privatisation has done to other Goverment departments – the simple solution is to raise tax by a relevant amount to accommodate the rapid advances in medicine, surgery and social care when those needs will never go away!

The cost of privately funded healthcare is hardly within the reach of the majority, these days it’s often a very last resort, people do prefer to stay in their own homes with the support and assistance they require, a huge expense to themselves.

I came across a lot of poverty amongst the elderly despite the fact of working hard, saving for their futures and being home owners, the Goverment is far too out of touch with the real world of the public sector.”

Claire Wright to Hugo Swire: please vote against more local government cuts tomorrow

From the blog of Claire Wright:

“I have just sent the email below to East Devon’s MP, Hugo Swire….

Dear Hugo

It has just come to my attention that tomorrow the House of Commons will be debating and voting on the settlement handed down by government to councils.

I am writing to you, as I have done every year for many years, to urge you to support your constituents by speaking and voting against the huge cuts that are proposed, in the latest round of austerity measures.

For Devon County Council, your government’s cuts means a cash reduction of around £20m. That’s more than a 76 per cent cumulative loss of income since austerity began in 2010.

Around 3000 staff posts have been made redundant during that time and so many services have gone there are almost too many to mention.

This year, the following is clear:

– 30 health visitor posts are set to be lost

– The council funded schools counselling service is set to be cut

– Devon residents are unhappy with some vital aspects of social care, according to a survey, including no longer feeling safe, see the following:

o How good is the social care related quality of life of service users? (bottom of the SW league table).
• Do service users feel safe? (Third from bottom of the SW league table)
• Do the services that people receive help them to feel safe? (bottom of the SW league table)
• Do carers have as much social contact as they would like? (third from bottom of the SW league table)
• What is the impact on their quality of life of the services that people receive? (bottom of the SW league table)

• Foster carers are set to suffer cuts to their income, at a time when they are desperately needed

• Local schools are being forced to cut teaching posts through not replacing staff, class sizes are growing and subjects are being cut at A-Level

Finally, and importantly, I should also take this opportunity to highlight just how much council tax has rocketed since austerity began and how this (along with other inflationary rises) is causing yet more hardship to many of your constituents.

Devon’s council tax (combined public services, not just DCC) has soared by almost 20 per cent in just seven years. That’s £250, for an average band D property.

So people are being taxed increasingly heavily for far fewer services, which is horribly unfair.

This year Devon County Council’s council tax element alone is set to rise by further 5.99 per cent.

No wonder people are finding it hard to make ends meet.

I urge you, once again, to speak up for the people of East Devon, against the latest set of services that are set to be lost, and support those who are struggling because of these service cuts. Please back the concerns of local people instead of towing your party’s line on the dreadful and miserable austerity that this country is in the grip of.

I look forward to hearing from you.

Best wishes
Claire Wright”

Our independent councillors: constantly standing up for our local NHS

ITV West Country News, with interviews with:

Claire Wright – DCC Independent Councillor (Ottery St Mary)
Martin Shaw – DCC independent East Devon Alliance Councillor (Seaton and Colyton)
Cathy Gardner – EDDC East Devon Alliance Councillor (Sidmouth)

continually fighting for our local NHS:

Not a single EDDC or East Devon DCC councillor attended the protest, nor did either of our MPs.

Parish questions community bed closure figures – too little and far too late

Owl says: how come WE knew all this and FOUGHT it whereas Parish, seeing votes lee h away from him, only sees it when it is FAR too late?

Where was he last Saturday when hundreds of people protested bed cuts and underfunding?


“situation reasonably good”
‘big concerns”
“figures not necessarily correct”
“strong representation”
“being looked at”
“necessary resources”
“not convinced”
“a little bit worried”
“watching very carefully”


“Devon MP has raised fears over the closure of beds in community hospitals across the county.

Speaking to Mid Devon District Council, Tiverton & Honiton MP Neil Parish said that although the situation in Tiverton was reasonably good, he had a “big concern” over the closure of beds in both Honiton and Seaton.

“I’m not happy with it because I don’t necessarily think they’ve got the correct figures,” he said.

“I also think that the acute hospital in Exeter the RD&E is also overstretched. The community hospitals have enough ability to be able to take that strain, and so I have been making very strong representations.”

Mr Parish said that decisions had been made by the Clinical Commissioning Groups (CCGs), but that strong representation had been made.

He added: “Of course, the social care services and health are being looked at by the Government at the moment to be combined more than ever to be able to look after people longer in their own homes. I think it’s a really good idea, but you do need the necessary resources to be able to do it, and certainly, that’s what’s been happening in many areas.

“So far from what I’ve heard in Seaton, Axminster and Honiton areas are that it’s worked reasonably well and I think we need to keep a watching brief on that. I think whenever possible people want to stay in their own homes, but of course, there will be those who need hospital treatment and care. That’s where community hospitals come into the equation.”

The MP considered that care packages in his constituency were currently providing services well and he had been assured that there would be an improvement. He asked that incidents of care packages not being put in place satisfactorily in his constituency be reported to him so that he could make specific enquiries. He added that although he considered being cared for at home was the right thing for some patients; he was not convinced it would save money and that enough people were needed to undertake the work. With an ageing population it was essential to ensure that the resource was in place.

“My representations I’ve had in Honiton, Axminster and Seaton where hospital beds have gone so far seem to be getting those care packages in place reasonably quickly. What I’m a little bit worried about is that they’ve put a lot of resource in now to get it right and they don’t take it away later. Therefore I’m watching that very carefully.”

“Decline of local journalism threatens democracy, says May”

In East Devon we had two local newspaper publishers: “View from … ” titles – a campaigning newspaper which recently closed and Archant (Midweek Herald and Journal titles) which basically mostly prints press releases from EDDC and elsewhere almost verbatim and pads them with anodyne articles, often linked to advertisers.

It is left now to bloggers such as Owl and campaigning Facebook groups (such as Save our Sidmouth and Save Exmouth Seafront) to use local sources to root out the stories Archant chooses not to print. Local campaigning newspaper journalism in East Devon is therefore pretty much on its last legs.

“The decline of local journalism is a threat to democracy and is fuelling the rise in fake news, Theresa May said while launching a review into whether state intervention was needed to preserve national and local newspapers.

The investigation is set to examine the rise of low-quality “clickbait” news and whether more could be done by either the industry or government to undermine commercial incentives to produce such content.

Speaking in Manchester to mark 100 years since the Representation of the People Act, which extended the vote to all men over 21 and some women over the age of 30, May said advances in modern technology were having “a profound impact on one of the cornerstones of our public debate – our free press”.

The review will examine the supply chain for digital advertisers and whether content creators, rather than platforms, are getting enough of the revenue. May said the review would examine “whether industry or government-led solutions” were needed to help tackle the issue.

The prime minister, wearing a purple jacket and suffragette pin, called journalism “a huge force for good” but said its existence was under threat. “Good quality journalism provides us with the information and analysis we need to inform our viewpoints and conduct a genuine discussion,” she said. “But in recent years, especially in local journalism, we have seen falling circulations, a hollowing-out of local newsrooms and fears for the future sustainability of high-quality journalism.”

How technology disrupted the truth | Katharine Viner
May said that more than 200 local papers had closed since 2005, naming several in Greater Manchester including the Salford Advertiser, Trafford Advertiser and Wilmslow Express. About two-thirds of local authority areas do not have a daily local newspaper.

“This is dangerous for our democracy. When trusted and credible news sources decline, we can become vulnerable to news which is untrustworthy,” she said. “So to address this challenge to our public debate we will launch a review to examine the sustainability of our national and local press. It will look at the different business models for high-quality journalism.”

May said the review would consider whether “the creators of content are getting their fair share of the advertisement revenue” from the articles they produced. “Digital advertising is now one of the essential sources of revenue for newspapers, the review will analyse how that supply chain operates,” she said. “A free press is one of the foundations on which our democracy is built and it must be preserved.”

The culture minister, Matt Hancock, said the review would investigate the overall health of the news media, the range of news available and how the press was adapting to the new digital market, including the role of platforms like Facebook and Google.

In a statement after May’s speech, Hancock said the industry was facing “an uncertain future” and the review would ensure the UK did not lose a vibrant, independent and plural free press. Hancock said it would examine “clickbait” news to consider if action needed to be taken to reduce its commercial incentive.

The review would also examine how data created or owned by news publications was collected and distributed by online platforms.

David Dinsmore, chair of the News Media Association, said he welcomed the plans: “This review acknowledges the importance of journalism in a democratic society, the vital role that the press takes in holding the powerful to account and producing verified news which informs the public. Viable business models must be found that ensure a wide variety of media are able to have a long and healthy future.”

A panel of experts will be appointed to lead the review in the coming months, with a final report expected early 2019.”