Audit, Inspection and Safety

08.07.19

Amey to pay Birmingham City Council £300m to exit 25-year highways maintenance contract

Outsourcing giant Amey has struck a deal with Birmingham City Council to pay the authority £300m to escape its troubled road maintenance deal which was worth £2.7bn.

The deal will see Amey pay the city council £215m to cut short the 25-year highways contract, and pay another £85m in disputed fees and fines.

Both parties said they had reached a consensual settlement agreement, with an interim replacement contractor to be in place no later than 1 April 2020.

READ MORE: Amey tables £300m offer to escape 25-year Birmingham City Council contract

This brings an end to a long-running saga which has seen the contractor attempt to buy itself out of the £2.7bn contract multiples times. The new deal now clears the way for owners Ferrovial to sell Amey, averting a possible Carillion-style collapse.

A legal dispute over the contract ended last year when the Court of Appeal ruled in favour of Birmingham City Council and said Amey had applied “an ingenious new interpretation of the contract” which had left roads and paths unrepaired.

The city council received an offer of £200m to break the contract in February, and after this was rejected Amey said the council was “holding its own road network hostage” as relations between the two totally broke down.

Now, in a joint statement, the two parties said Amey would continue to provide services until an interim replacement contractor is found, with the search beginning immediately.

The full rendering of the project to find a permanent replacement contractor will take place during 2020/21, and the statement said all parties “will be working closely in the coming months to ensure the smooth transition of services and staff.”

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

latest public sector news

TSSA welcomes vote backing HS2 phase 2

17/07/2019TSSA welcomes vote backing HS2 phase 2

The general secretary of the Transport Salaried Staffs' Association (TSSA) has described the decision by MPs to approve the second stage of the H... more >
County council approves £153m link road amid climate change protests

16/07/2019County council approves £153m link road amid climate change protests

Norwich county councillors have formally approved a new link road for the Norwich bypass, despite the environmental group Extinction Rebellion st... more >
Lewisham Council appoint new chief executive from Hackney Council

15/07/2019Lewisham Council appoint new chief executive from Hackney Council

Lewisham LBC is set to appoint Kim Wright, currently a group director at Hackney Council, as its new chief executive. Wright will take up th... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
OFSTED report finds ‘purposeful progress’ at Barnet Council’s Children’s Services

19/07/2019OFSTED report finds ‘purposeful progress’ at Barnet Council’s Children’s Services

A report by OFSTED on Barnet Council’s Children’s Services have gone from inadequate to good in just under two years. The report highlights that the council is delivering improve... more >
TSSA welcomes vote backing HS2 phase 2

17/07/2019TSSA welcomes vote backing HS2 phase 2

The general secretary of the Transport Salaried Staffs' Association (TSSA) has described the decision by MPs to approve the second stage of the High Speed Two (HS2) as “wise and welcome&rdq... more >

the raven's daily blog

New rules to change the future of Social Value

05/06/2019New rules to change the future of Social Value

The government has announced the introduction of new rules to change the future of social value and make the way housing developers stump up the money for infrastructure both simpler and more transparent. These regulatory changes are designed to help achieve its ambition to deliver 300,000 extra homes per year by the mid-2020s.  ... more >
read more blog posts from 'the raven' >

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Being on the receiving end of some “thanks” can make communit... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues that community-led initiatives are a productive way of helping to solve... more >
Aberdeen's green transport fleet attracting international attention

19/06/2019Aberdeen's green transport fleet attracting international attention

Aberdeen City Council’s hydrogen spokesperson, councillor Philip Bell, highlights the Granite City’s determination to play a leading ... more >
A fifth of public sector workers have never received a thank you from the people they serve

13/06/2019A fifth of public sector workers have never received a thank you from the people they serve

A fifth of the country’s public sector workers say they have NEVER received a ‘thank you’ for doing their job as Public Service... more >

interviews

Digital innovation in the public sector: The future is now

17/12/2018Digital innovation in the public sector: The future is now

One of the public sector’s key technology partners has recently welcomed a new member to its team. Matt Spencer, O2’s head of public ... more >
Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need to invest in technology to help make better use of their resources. Bu... more >
New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

05/11/2018New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

The new chief executive of one of the new unitary authorities in Dorset has outlined his approach to culture and work with employees, arguing tha... more >
Keeping the momentum of the Northern Powerhouse

15/10/2018Keeping the momentum of the Northern Powerhouse

On 6 September, the biggest decision-makers of the north joined forces to celebrate and debate how to drive innovation and improvement through th... more >

public sector focus

View all News