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Government moves to reassure over Interserve public services

Parliamentary Secretary of the Cabinet Office Oliver Dowden has issued reassurances over public services in relation to the difficulties being experienced by Interserve.

The outsourcing giant, which went into administration on March 15th and has already completed the sale of the Group, other than Plc, to newco Montana 1 Ltd, is a big provider of services to the public sector.

However, it was revealed that the government had handed £660m worth of public contracts to Interserve in the run-up to it going into administration.

It also, like Carillion before it, has significant suppliers of its own who will be naturally extremely concerned.

This prompted Shadow Cabinet Office Minister Christian Matheson to request a statement from government on the situation.

The Dowden statement read: “As I have said repeatedly to the House, the government are not responsible for decisions taken by companies in the private sector.

“What the government are responsible for is the continued delivery of public services, and I assure the house that has happened in this case. Schools continue to be cleaned, roads continue to be repaired and improved, and services in Government buildings continue to run as normal.”

“I reassure hon. members that nothing in Interserve’s refinancing will affect the delivery of public services. No staff have lost jobs and no pensions have been affected.”

Dowden went on to say that the government had learned lessons from the collapse of Carillion, including revision of its procurement processes.

Interserve has appointed Alan Hudson and Hunter Kelly of Ernst & Young LLP as administrators for its PLC business.

Meanwhile, experts have pointed out that the Interserve situation differs from Carillion’s in that the latter fell immediately into liquidation, with no chance of investors recovering assets. Conversely, Interserve’s administration is being viewed as relatively orderly, with creditors in full control.

Government to continue with Interserve contract tenders

The UK government will continue to award contracts to embattled FM provider Interserve, which has seen its share price tumble following publication of its rescue plan earlier this week.

The Interserve Board says it’s working with advisers to look at all options to deliver the ‘optimum capital structure for the group to support its long-term, sustainable development’.

In a statement issued Monday, the beleaguered company said it’s targeting a leverage of approximately 1.5x net debt/EBITDA.

The discussions also involve proposals to amend the Group’s current financing agreements, including the extension of the maturity dates and repayment profiles of the existing facilities.

Interserve said it ‘continues to trade well and in line with its expectations for the year ending 31 December 2018’.

However, shares in the firm nosedived at the announcement, which has many in the education space worried at the possible future implications of another Carillion-style collapse.

Regardless, Government sources have told The FT that it would consider Interserve for further tenders, including a contract to provide housing for asylum seekers and a back-to-work programme for unemployed people.

And in more positive news, Interserve was this week awarded a £25m contract by Cwm Taf University Health Board, as part of the next phase of the £36m redevelopment of Prince Charles Hospital in Merthyr which is funded by Welsh Government.

Works should start on the project in December 2018 with completion by spring 2021.

Interserve wins £3.6m East Sussex Academy contract

Interserve has won three-year contract to cater for an academy school in East Sussex.

Hastings Academies Trust in St Leonards-on-Sea is a multi-academy trust consisting of two secondary schools, six primary schools and one infant school.

The Department for Education secondary school league table has placed The St Leonards Academy in the top 7% of all secondary schools in the country for progress.

Interserve beat three other tenders to win the contract, valued at £3.6m. At the end of the term, Hastings Academy will have the option to extend the contract by a further two years.

The Academy has asked Interseve to provide a range of meals to the pupils and staff across the complex.

UK-based Interserve has gross revenues of over £3.6 billion and a workforce of circa 80,000 people worldwide. The company offers design, construction and consultancy, alongside facilities management that includes cleaning, catering, security and maintenance.

CCS awards Interserve with £40m TFM contract…

Interserve has secured a new five-year total facilities management (TFM) account with six central government departments worth over £40 million.

The deal, awarded through the Crown Commercial Services (CCS) Framework Agreement for Facilities Management Services, will see Interserve deliver a broad range of services including catering, security, front-of-house, as well as mechanical and electrical maintenance.

It is the first time that all six departments’ facilities management services will be handled by a single provider. 

John Manzoni, chief executive of the Civil Service said: “Bringing the support services together under a single overarching account will deliver significant benefits for each department and for the government as a whole. Thanks to the efficiencies that our partnership with Interserve will deliver, we will achieve consistent service level across the estate whilst bringing savings; ensuring we are delivering real value to taxpayers.”

Known as the ‘Affiliate Cluster’, the account covers: the Cabinet Office; the Department for International Development (DFID); the Food Standards Agency (FSA); the Government Actuary’s Department (GAD); the Health and Safety Executive (HSE) and the Office for Standards in Education, Children’s Services and Skills (Ofsted).

Alongside the new cross-departmental deal, Interserve also has pre-existing partnerships with the Home Office (HO), the Foreign & Commonwealth Office (FCO), the Department for Environment, Food and Rural Affairs (DEFRA) and the Health and Safety Laboratory in Buxton (HSE). 

Workplace experience report published by Interserve…

According to a recent report developed by the international support services and construction group, Interserve, the noise, smell and temperature of the workplace are among some of the main indicators that greatly influence an employee’s working experience.

Forming part of the organisation’s ‘workplace experience science series’ – initially launched in July of this year alongside the work environment change professionals, Advanced Workplace Associates – this first report details how by improving employees’ physical and emotional response to their working environment – from the look and feel of a workplace to non-visual sensory inputs such as smell, noise and temperature – can significantly improve productivity and cognitive performance.

Managing director, Commercial at Interserve, Jeff Flanagan, commented: “The environment may be different in the workplace, but the way we process experiences and how this affects our behaviour is the same. By understanding employees’ physical and emotional responses to their working environment – which this report seeks to explain – workplace professionals can design and deliver positive workplace experiences that will contribute to improved productivity and performance for the organisation.”


You can download a full version of the report here

JLL awards Interserve with £60m FM contract…

The support services and management company, Interserve, has landed a three-year facilities management contract worth an estimated £60 million with the commercial and residential property services company, Jones Lang LaSalle (JLL).

Currently managing 60 shopping centres across the UK, the contract will see Interserve provide integrated facilities services to 18 of JLL’s shopping centres, and more than 300 people will TUPE transfer to Interserve to deliver security, customer services, cleaning, window cleaning, pest control and electronic security system maintenance.

Chief executive at Interserve, Adrian Ringrose, commented on the deal: “We have a strong relationship with JLL having provided a range of facilities management solutions to them for many years. We look forward to helping JLL create the best possible experience for visitors and employees at their nationwide shopping centres and workplaces across the capital.”