Carillion collapse has libraries and hospitals counting the cost

All work on the £12m upgrade at St Helier Hospital has stopped, following the collapse of Carillion

Croydon’s libraries have survived their brush with Carillion, although they had to endure a couple of days of IT outages and other issues as council staff worked and negotiated behind the scenes to replace services which had gone unpaid by their erstwhile outsourcers.

But at St Helier in Sutton, all construction work on the biggest refurbishment project in that hospital’s history has come to a grinding halt, while the NHS Trust’s management sort out replacement builders for the failed corporate giant.

Carillion – a massive corporation formed from mergers including road builders Tarmac and construction firms Mowlem and Alfred McAlpine – went into liquidation on Monday with debts of £900million and a pension deficit of £600million.

A subsidiary, CCS, had been running Croydon’s library service since 2013 following an outsourcing, or privatisation, process run by the previous Tory council administration. That handover saw a significant number of staff lose their jobs and the libraries’ book stock run down, while complaints about disinvestment and a decline in the service had been mounting.

But council staff and Councillor Timothy Godfrey, the cabinet member for books and stuff, had been preparing for Carillion’s demise for months, since the company first started sending up distress signals with profits warnings announced to the London Stock Exchange in July.

Thornton Heath Library: now firmly back in public control

Croydon’s libraries stayed open throughout the past week, though there were a number of problems to iron out as a consequence of the Carillion failure.

“Staff doing an amazing job behind the scenes sorting out IT, taking back our buildings and starting to sort out the issues that Carillion failed to sort out – like the heating at Norbury Library. Still lots to do, but great drive to do this right,” Godfrey tweeted on Tuesday.

By the following day, library staff, who had been on CCS’s books since the handover five years ago, had received a letter from Croydon explaining the process and paperwork of their transfer back to the council’s staff.

And on Thursday, council engineers were on site at 7am at Norbury Library to fix the heating, a long-standing problem which, apparently, was beyond the capacity of building firm Carillion to get repaired.

In a news report in the tabloid Grauniad, Godfrey said of Carillion’s library management in the borough, “They hadn’t been paying paper suppliers and photocopier engineers. Their annual library plan was always behind schedule. It’s been really unfair on the staff on the front line because they were the poor souls holding the service together, and they had no managerial support.

“There were staff paying out-of-pocket for things like for craft materials for activities with kids.”

This week was still a rocky few days, with library staff having to go back to old-school manual checking in and out of books because the computer system had been cut off by Carillion’s contractors, who had been left unpaid.

Council Tax-payers in Croydon will be relieved to know that, according to Town Hall sources, the council had paid no money up front to Carillion for its library services.

Timothy Godfrey: preparing for Carillion collapse for six months

So while library staff will now be taken on to the council’s pay-roll – at London Living Wage rates, too – the expectation is that not having to deal with the profit-driven outsourcers any longer will be close to cost-neutral for Croydon, with the £4.2million annual budget that previously went to CSS now being used to manage the borough’s 13 libraries.

“And no more costly lawyers’ fees,” the source said. “Lawyers were needed for every small change with Carillion. It took ages to review anything and get it agreed. That now won’t be the case, and with the new library to be built in South Norwood, there won’t need to be any expensive legal fees incurred to negotiate the move, it can just happen.”

The Carillion saga has exposed the neocons’ dogmatic pursuit of the principle of privatising public services and property as the multi-billion fraud that it always was.

Nowhere more so than in the perverse privatisation of the nation’s public libraries, as library campaigner Tim Coates told the Grauniad: “The government and local councils have been trying to delegate library services… for 15 years. It has been a complete waste of time and effort and it was never going to work.

“Libraries don’t make money – the whole point is that they’re free. Councils palming them off to someone looking for some kind of gain is a waste of time and doesn’t make for a great library service.”

Extracting the public sector from this gigantic private sector fuck-up might take a little longer over at St Helier, however, where the £12million refurbishment on the 80-year-old buildings was underway.

The Save St Helier Hospital campaigners welcomed the long overdue upgrade to the buildings, though there remains some scepticism about the purpose of spending such a large sum on a site where, under current Tory plans, they intend to knock the whole thing down in two years’ time.

“One has to wonder if the bigger picture here might be to dress up an asset at huge public cost before handing it over to someone else?” one suggested this week.

Because outsourcing the NHS to for-profit private contractors is bound to work as well as it did for … Carillion, isn’t it?

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1 Response to Carillion collapse has libraries and hospitals counting the cost

  1. derekthrower says:

    You have to think where on earth do these Tories find their ideas to run public services as private business cash cows? It must be the USA? No the idea of publically funded library has not even been challenged by Donald Trump amongst all the lunacy. This is simply a transfer of public funded wealth to a small number of individual companies without any rational assessment of the risks the taxpayer is exposed to. Now the taxpayer is bailing it out without any of these individuals running the company paying any financial penalty for there complete mismanagement. Pure corporate welfare.

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