Carillion contracts deal fails putting 2,500 jobs at risk

A Canadian firm has pulled out of a deal to buy a host of public sector contracts from collapsed outsourcing firm Carillion, putting at risk 2,500 jobs due to be saved.

Real estate and facilities management company BGIS said last month it had agreed a deal with the official receiver to buy Carillion contracts to provide services to hospitals, the education sector, justice, transport and emergency services.

But in an unexpected announcement on Thursday, BGIS said the deal “will not be proceeding, as certain closing conditions have not been met”. It did not elaborate on why the deal fell apart.

“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,” said Gord Hicks, chief executive of BGIS.

The deal would have saved 2,500 jobs, boosting the official receiver’s efforts to find new employment for Carillion’s 19,500-strong UK workforce.

The official receiver said earlier this month that 8,216 jobs have been saved and 1,458 jobs have been made redundant during the liquidation process.

Q&A

What government contracts did Carillion hold?

NHS

• Managed facilities including 200 operating theatres and 11,800 beds

• Made more than 18,500 patient meals per day

• Helpdesks dealt with 1.5m calls per year

• Engineering teams carrying out maintenance work

Transport

• Built ‘smart motorways’ – which ease congestion by monitoring traffic and adjusting lanes or speed limits – for the Highways Agency

• Major contractor on £56bn HS2 high-speed rail project

• Upgraded track and power lines for Network Rail

• Major contractor on London’s Crossrail project

• Roadbuilding and bridges

Defence

• Managed infrastructure and 50,000 homes for Ministry of Defence

Education

• Designed and built 150 schools

• Catering and cleaning contracts at 875 schools

Prisons

• Maintenance and repairs at about half of UK prisons

Libraries

• Managed several public libraries in England

Energy

• Built substations, overhead cables and other works for National Grid

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A further 7,500 are being retained while the liquidation continues, to ensure public services are not interrupted.

It is not clear whether the 2,500 staff due to transfer to BGIS were included in these numbers.

The Guardian has approached the Insolvency Service, the government unit that houses the official receiver, for comment.