Facilities firms could step into void left by Carillion’s collapse
Norfolk’s biggest facilities group is in discussions to step into the breach left by the collapse of outsourcing giant Carillion.
Norse Group is working with partners to pick up some of the multi-million pound contracts and has moved to reassure workers of the failed construction business they will be at the top of the hiring list where possible.
Norse Commercial Services (NCS) has said it will step in to support partner councils in the short-term as well as bidding for long-term contracts when they are put out for tender.
Carillion held around 450 government contracts which were worth 38% of its £5.2bn revenue in 2016, according to the Office for National Statistics.
Dean Wetteland, managing director of NCS, which is owned by Norfolk County Council, said the group is considering taking on school meals or cleaning projects, but Carillion’s construction schemes were not of interest.
“There is one particular contract with one of our joint venture partners which we are looking at but we would consider taking on more if it works for both parties,” he said.
He put the value of the contracts at between £2m and £3m, which would represent a significant boost to Fifers Lane-based NCS’s turnover of £164.4m to April 2017.
Mr Wetteland said: “I think you are going to see a lot of temporary arrangements, and we will help out where we can, as a lot of these things, such as cleaning schools, have to be continued with as little disruption as possible.
“In six to 12 months time you will see those contracts go to tender for the long-term.”
Ipswich-based Vertas has also said it would be happy to talk to businesses hit by Carillion’s demise.
Group commercial director Jo Lardent said the company would be interested in catering, cleaning, property maintenance and fleet management work.
Mr Wetteland said there had been a “race to the bottom” in price competition among providers, leading to unprofitable contracts being taken on to bolster turnover.
“When you used to go out to tender you would see a weighting of 50/50 in price to quality, but in the last few years we have seen the focus move to 80/20 and I have even seen cases of companies choosing 100% based on the lowest price.”