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Islington Tribune - by PAUL KEILTHY
Published: 18 April 2008

HOW MUCH ARE THESE DEALS REALLY WORTH?

Companies responsible for £3m school contracts accused of ‘price rigging’

CORPORATE giants with contracts worth £300 million for rebuilding the council’s schools and houses were accused of price-rigging yesterday (Thursday).
Leaseholders forced to pay swingeing bills for repairs led calls for an immediate investigation after the Office of Fair Trading (OFT) named Kier Group Plc and Balfour Beatty – two of the council’s biggest contractors – among 112 builders accused of forming cartels illegally to rig bids for work.
An unknown number of companies on the full list are accused of faking invoices to rig prices.
Balfour Beatty – which has a £140 million contract to rebuild Islington’s schools as well as a £22 million slice of the £157 million contract to refurbish the council’s houses – has already asked for leniency in respect of the allegations.
Yesterday, Michael Read, from the Islington Leaseholder Action Group, said: “We have said this has been going on for years.
“The prices we are charged by the authority bears no relation to the prices that could be obtained in the private sector. [Council housing chief] Councillor Stacy should surely order an immediate independent audit of all the building contracts currently under way.”
Hundreds of millions of pounds worth of work will be called into question by the announcement, including repairs made to bring council houses up to decent homes standard across the borough.
Labour councillor Gary Doolan said: “If this [price-rigging] has been going on I hope [those involved] get caught, and where taxpayers’ money has been overpaid, residents should be entitled to get their money back.”
Islington housing chief Cllr Terry Stacy said all the council’s contracts were procured within government guidelines and said: “We would be extremely concerned [...] if any of the companies had overcharged for work in Islington.”
Kier Group Plc – the biggest player in the Homes for Islington PFI, trading as Kier Islington – said last night it was “digesting the contents” of the OFT’s accusations but declined to comment.
A spokesman for Balfour Beatty said the company had co-operated with the OFT investigation and did not condone anti-competitive conduct.

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