Carillion secures £700m first-of-its-kind contract from local authority

SUPPORT services group Carillion has been awarded a 10-year contract by Oxfordshire County Council for property and facilities management services which could be worth up to £700m during the lifespan of the agreement.
 
The initial contract is worth £500m, during which time the local authority is expected save around £550,000 per annum. The agreement is the first time the council has grouped all of its property services into one contract and this is the first local authority contract of this kind in the UK.
 
A framework agreement has also been put in place through which other local councils and bodies within Oxfordshire can procure services from Carillion, which could boost the contract’s value by an additional £200m over the 10-year contract period.
 
Oxfordshire County Council also has the option to extend the contract for a further 10 years, based on performance.
 
Wolverhampton-based Carillion will provide routine property management, facilities management, energy management and capital works services.  Carillion has appointed Capita Symonds as a key sub-consultant to deliver strategic asset management, estates management and multi-disciplinary design services, which are expected to generate approximately £42m of revenue for Capita over the 10-year life of the contract, with the potential for additional revenue from the framework agreement.
 
Carillion will also take on the council’s schools catering business (Food with Thought) and in-house cleaning service (QUEST Cleaning Services) as part of the new contract, with the transfer of over 700 staff. Both services are a key focus of Carillion’s growth plans going forward.
 
The framework agreement will allow participating bodies other bodies such as health and other public sector organisations, the district councils, schools (including academies) and further education colleges to procure similar services for their own estates, without the need for further procurement processes or costs.    
 
Richard Howson, Carillion chief executive, said: “We are delighted to be chosen for this exciting partnership with Oxfordshire County Council. This builds upon Carillion’s strong track record in delivering integrated service solutions to Local and Central Government customers.  We will continue to work closely with Oxfordshire County Council to ensure we deliver high quality, value for money services to the people of the county.”
 
Huw Jones, the authority’s director for Environment & Economy, said: “The council has taken advantage of the opportunity to combine a number of contracts that had previously operated independently of each other to provide comprehensive high quality services that also operate more cost effectively, not only improving consistency and resilience, but making financial common sense.”