Interserve administration will not affect delivery of public services, government says

The parliamentary secretary of the Cabinet Office, Oliver Dowden, has reassured government and Interserve suppliers that the company’s refinancing deal will not affect the delivery of public services.

Interserve, one of the UK’s largest government contractors, announced that they were going into administration on 15 March and control has passed to a new company. http://www.infrastructure-intelligence.com/article/mar-2019/%E2%80%9Cbus...

In response to a question from shadow cabinet office minister, Dowden said: “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.”

Dowden added: “I reassure honourable 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. The company has executed a contingency plan that it had prudently developed in case shareholders rejected the proposed refinancing deal. This was a pre-agreed transaction, known as a “pre-pack” administration. Hundreds of pre-pack administrations are performed every year, including by well-known companies. It is a well-established and normal process, typically used when a shareholder is blocking a business’s restructuring.”

Dowden said that the operating companies responsible for the delivery of all Interserve’s services, public and private, have remained wholly unaffected. As a result of the company’s administration those operating companies were then almost immediately purchased by a new company, Interserve Group, said Dowden and he sought to reassure the House that the government had “learned from the collapse of Carillion” and were “implementing changes to our procurement and commercial processes”.

That learning includes the publication of The Outsourcing Playbook, developed with industry, which outlines a range of measures designed to ensure that outsourcing projects succeed. “We are now asking suppliers of critical contracts to provide detailed information to help to mitigate any risk to service delivery in the rare event of corporate failure. These “living wills” are now being piloted by five strategic suppliers, including Interserve,” Dowden said.

Dowden also told MPs that the government were taking action on prompt payment, including excluding suppliers from government procurement if they cannot demonstrate prompt payment to their supply chain. He also said that steps were also being taken to embed social value in government procurement, with the launch of a consultation last week.