Latest Public Sector News

25.01.18

Leeds council calls in bank bond to deal with contract left unfinished after Carillion collapse

Leeds City Council has this week decided to call in contingency plans to deal with the recent collapse of construction giant Carillion, who has left a contract it was delivering for the authority unfinished.

The council awarded the contract for the Leeds city centre cycle Superhighway City Connect 2 (phase 1) to Carillion in October.

However, at the time, the award was subject to receiving an ‘On Demand Bond’ from HSBC that would protect the public purse in the case that Carillion goes into liquidation.

“As part of the original contract for work on the Superhighway City Connect contract we made sure that public funds were protected by making it a condition that a bond was woven into the Carillion contract in the event of the contractor becoming insolvent,” said Leeds City Council chief executive, Tom Riordan.

“Consequently we are in contact with the bank, HSBC, who provided the bond to confirm that Leeds City Council are calling-in the payment of the guarantee.”

Riordan added that Leeds was contacting the official receiver to let them know that as Carillion has had a winding up order made against it, the city council was terminating the contract with the company.

“The council is arranging to use our own staff and subcontractors to make the site safe and do any necessary work so the highway can be reopened,” he concluded.

The news also follows Oxfordshire County Council agreeing a deal to terminate its own contract with Carillion this week.

Comments

Stephen CD Carter   26/01/2018 at 12:00

Excellent Risk Management and Contingency Planning by someone. It would have been so very easy to say "Carrillion is too big to fail" and not bother with the offset.

Add your comment

 

related

public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News

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. Bei... 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 t... more >

interviews

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 ... more >

the raven's daily blog

Northern Powerhouse Partner aims to connect the North once again

02/09/2019Northern Powerhouse Partner aims to connect the North once again

In February this year, official Northern Powerhouse Partner, Cognitive Publishing, delivered EvoNorth 2019.  The two day event was designed to amplify and highlight futur... more >
read more blog posts from 'the raven' >

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 feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >