Oxfordshire County Council might owe even more money after Carillion crash

Auditors believe Oxfordshire County Council may have understated the money it owes to the collapsed outsourcing giant Carillion.
Oxfordshire County Council's base at County Hall in Oxford NNL-180920-115911001Oxfordshire County Council's base at County Hall in Oxford NNL-180920-115911001
Oxfordshire County Council's base at County Hall in Oxford NNL-180920-115911001

The council said it paid Carillion about £118.7m in its outsourcing contract from 2012 – until it terminated the deal with the company in December 2017.

Carillion collapsed a month later, meaning trouble for public services across the country as major infrastructure projects, including a new hospital in the West Midlands, were delayed.

Auditors have told the council that it believes it may be understating the amount it needs to pay and overstating the money it is owed by the collapsed firm.

According to a freedom of information request returned by the county council, the scale of work completed by Carillion is laid bare.

Projects range from a value of £10m at Great Western Park in Didcot to £54 at St Mary’s Catholic School in Bicester across the term of the contract. The FOI request notes a total of 599 projects were completed by Carillion or its contractors.

The average cost of a project completed by Carillion was nearly £200,000, according to the figures.

The council previously said it will need to redo some projects to correct ‘latent defects’ in some sub-standard work that Carillion would have been responsible for, had it not collapsed.

It had said the cost of the work would be ‘substantial’ – but a final bill has yet to be shared with councillors.

A county council spokesman said the assessment by the auditors had been expected as part of its work overseeing its accounts.

Auditors EY state in documents filed on the county council’s website over anticipated costs: “There is ongoing discussion with Carillion’s liquidators (PricewaterhouseCoopers) relating to monies PwC claim are owed by the council. The council is simultaneously quantifying the costs of rectifying known defects and estimating the potential for latent defects.

“Given the level of estimation involved we have identified that there is a risk that the amounts owed by the council may be understated and that the amount due to the council may be overstated.”

Other major projects assisted by Carillion included the Longford Park development in Banbury. That totalled £8.75m.

Other substantial bills included work at Bicester Eco Town, which set the county council back £7.5m.

At a council meeting in October, senior council officers told members that ‘some have unreasonable expectations regarding what the council can do’ over the Carillion contract.

They added they ‘would welcome members’ help in dealing with that’.

At the time, Alexandra Bailey, the council’s director of capital, investment and delivery, said Carillion’s liquidators were still working out how much it was owed.

Minutes state: “[PwC] will tell [the council] how much they think we owe Carillion and we will tell them how much Carillion owes us.

They continue: “Officers are confident the figures owed to [the council] will be the higher one.”

Nathan Briant, Local Democracy Reporting Service