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Call for council contracts inquiry
Opposition leaders demand investigation following fines dished out by OFT
LEASEHOLDERS and taxpayers have called for a public inquiry after builders with council contracts worth more than £700m were fined millions this week for rigging prices.
Islington’s biggest contractors, Kier Group, Apollo and Balfour Beatty, were among 103 construction firms fined £129.5m by the Office of Fair Trading (OFT) for “cover-pricing” and other forms of collusion to artificially boost contract prices.
Schools, police stations, and housing authorities across the UK have paid millions over the odds because of the scams, the OFT said.
Although no Islington contracts have been named as price rigged, the OFT said in its official statement that it had ignored thousands of allegations in order to concentrate on a limited number of infringements, mostly in the Midlands, between 2000 and 2007.
Michael Read, from the Islington Leaseholder Action Group, said the charges faced by his members would have been inflated by any price fixing in council contracts. He said: “You have to suspect all contracts issued by Islington or any council. Housing for Islington’s [HfI] contracts have got to come under renewed scrutiny.”
Opposition housing spokesman Councillor James Murray called for a full investigation into Islington’s contracts.
Cllr Murray said: “The fact that Kier have been found to have so spectacularly messed around other councils it does make you wonder.
“We need to find out if the council did do their due diligence and an investigation to make sure that there have been no overcharges.”
Opposition leader Councillor Catherine West called for a review by the council’s Overview Committee, which scrutinises budgets and policy.
Kier Islington is the sub-group set up to bid for the borough’s £700m housing refurbishment contracts. Kier Regional Ltd and its parent company Keir Group Plc, which own Kier Islington, were fined £17.9m, the largest single fine in the industry.
Balfour Beatty Construction Ltd, who have a £140m contract to refurbish Islington schools as well as £22m worth of housing contracts, were fined £5.2m for deals relating to Mansell Plc, which they own. The OFT gave them a 50 per cent discount in their fine under leniency rules after they admitted some charges.
Apollo Property Services Group Ltd, another Islington housing contractor, was fined £2.2m.
HfI, the council-owned management agent that now runs Islington council houses, said it had carried out its own investigation last year.
A spokesman said: “Residents and leaseholders can have confidence they have not been overcharged. HfI always seeks to get the best value for money for its residents.
“For all our Decent Homes work, we use a framework agreement that significantly reduces any opportunities for contractors to engage in price-fixing.” |
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