A Canadian firm has pulled out of a deal to acquire a suite of UK public sector contracts previously held by collapsed Carillion, putting 2,500 jobs formerly thought safe at risk.
In surprise announcement yesterday, facilities management (FM) and real estate group Brookfield Global Integrated Solutions (BGIS) said the deal to buy FM contracts serving hospitals, prisons, schools, transport and emergency services was off because "certain closing conditions have not been met".
The deal had been arranged last month with the UK government’s official receiver, which is managing Carillion’s liquidation.
BGIS did not say what those closing conditions were, but they appear to involve guarantees of continued business, since a statement from the government’s Insolvency Service said the agreement had been conditional on "ongoing support from customers for continued provision", adding, "but this could not be secured", FM World reports.
This has led to speculation over why those public sector contracts could not be guaranteed.
"It is understood that the customers include special-purpose vehicles used by government to manage public services," commented newspaper The Guardian, "but it is not clear why a promise of continued support for those services was not forthcoming."
BGIS chief executive Gord Hicks said he still wanted the company to expand in the UK.
"While we are disappointed at this outcome, we are continuing to pursue opportunities to grow our global business into the UK and welcome continued dialogue with prospective customers as we build out our platform for future growth opportunities," he said.
In the seven weeks since Carillion was forced into liquidation on 15 January the official receiver, through deals such as BGIS’s, has been steadily adding to the number of jobs saved for Carillion’s 19,500 UK workforce.
This week the total hit 8,216, but the failure of this deal could shrink that to around 5,700. The number of confirmed redundancies also reached 1,458 this week.
The government’s Insolvency Service told FM World that the 2,500 jobs affected by deal’s collapse "are safeguarded for now".
In its heyday Carillion’s FM business managed 200 operating theatres, 11,800 hospital beds, made more than 18,500 patient meals per day, and staffed help desks handling 1.5 million calls a year, according to a list compiled by the Guardian.
It also managed infrastructure and 50,000 homes for the UK’s Ministry of Defence.
Image: As well as building things, Carillion had expanded into facilities management, including catering, for schools and hospitals (Carillion)