Fountains contract collapse: How the Norwich City Council contract saga unfolded
In April 2010, Norwich City Council awarded eight contracts to Connaught after the break-up of the CityCare contract.
The old CityCare contract had been plagued with controversy, with the Evening News revealing how 17,000 tenants and leaseholders had been charged over the odds for building and maintenance work on their homes.
After CityCare’s 10-year contract came to an end, the city council chose Exeter-based Connaught to take on responsibility for services ranging from fixing and repairing the city’s council homes to managing asbestos and recycling. The various parts of the contract added up to £125m in total, but eyebrows were raised that the amount Connaught said the contracts could be delivered for was so much lower than other bidders.
The city council also had to reach a financial settlement with Morrison, the parent company of CityCare, after it challenged the decision to award Connaught the £17.5m a year contract for housing maintenance in the High Court.
At the High Court hearing Mr Justice Arnold said Morrison had a “seriously arguable” case that Connaught’s bid for the housing maintenance contract was “abnormally low” and that the council had not properly investigated it.
There were problems with Connaught from the start, including missed appointments and workers not being fully paid, which were initially blamed on teething troubles.
However, Connaught’s share price tumbled and a profit warning was issued, before, in September last year, Connaught Partnerships went into administration, leading to the loss of 300 jobs. Connaught Environmental, which at that time employed 200 people, was saved by administrators KPMG and was rebranded as Fountains.
But the company, which also had council contracts with the London Boroughs of Wandsworth, Camden, Hillingdon and Tower Hamlets, continued to have problems.
It was taken over in March last year, in a move which bosses hailed at the time as securing its long-term future.
However, unfortunately for the Norwich workers, that turned out not to be the case.
While much of Fountain Group’s assets and contracts have been sold, securing more than 1,500 jobs, the Norwich contract is not among them.
That leaves the city council trying to find a way to provide services and the workers hoping their skills will be required by whichever company takes over the contracts.