Camden News: Office of Fair Trading accuses Town Hall contractors over bills

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Camden News - by PAUL KEILTHY
Published: 24 April 2008

Builders ‘rigged prices’

Office of Fair Trading accuses Town Hall contractors over bills

LEASEHOLDERS stung by soaring bills for council-run works have called for a full inquiry after building firms used by Camden were accused of rigging prices by Office of Fair Trading.
The council’s approved list of contractors passed as fit to bid for large Town Hall tenders includes nine companies accused by the Office of Fair Trading of “cover-pricing”, an illegal practice by which bidders for contracts keep prices artificially high.
Two-thirds of the accused firms have already admitted some forms of price-rigging.
If the allegations are founded, taxpayers may have footed millions of pounds worth of extra bills – leaseholders may have been hit even harder as they are billed for their share of over-priced work.
Former chairman of the Association of Camden Council Leaseholders, David Auger, is fighting a county court battle with the council over charges.
He said: “Historically Camden has overcharged. But this is an ongoing problem. People with street properties in particular have never understood how it is that they get a quote from a builder down the road that is many times less than the price that the council is quoted. We need to know what Camden is doing to review where the money has gone.”
Among the accused companies are Haymills (Contractors) Ltd and Apollo Property Services Group Ltd, which both have clearance to work on Camden schools.
Kier Group Ltd, Carillion Plc, and Balfour Beatty – which has asked for leniency from the regulators – also feature on Camden’s list.
Dr Peter Wright, chairman of the Camden Leaseholders Forum, said: “The council has a fiduciary duty to consider whether they should sue any companies that have been involved in malpractice.”
The Construction Confederation, which represents many of the accused firms, said on Tuesday that it had written to local authorities to clarify that most were alleged to have engaged only in cover-pricing – putting in bids that were too high to win contracts because they were too busy to do the work.
Confederation chief executive Stephen Ratcliffe said: “The OFT’s public statement that contract prices were typically artificially inflated by 10 per cent is quite simply unproven and unsustainable – the OFT has no such evidence and their statement is pure supposition.”
A council spokesman said: “We need to remember that these are allegations only at this stage and we will be seeking clarification from the OFT as well as our own legal advice about the impact these allegations have on our procurement activities.
“Currently we have had no indication that any Camden contracts are included within those under investigation.”

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