Social housing servicing group Connaught 'nears administration'

vivatifosi

An interesting one this.

The good news is that local authorities are absolutely gagging to negotiate down contracts and this will give some wiggle room to do that. The bad news is the Exeter jobs market is going to feel the pain as its already seeing restructuring at Rok and potential job losses at the Met Office.

The interesting thing with the maintenance sector is some of the work is mandatory - gas inspections for example - whereas some such as fitting new kitchens is not. That side of the sector heavily involved in regulatory work will likely do ok, whereas that involved in domestic refurbishment will do less well. There are plenty of good mid-sized companies in the industry winning contracts for HAs for gas fitting, electricals etc. What will be interesting is whether the government buyers take a step back and move more towards that model, or continue down the Connaught type route of picking one provider for everything.

Looking forward and anticipating future job losses and company failures, I'd expect them to be where companies have based business models around more discretionary capital spend from the government: office furniture, maybe computer projects, refurbishments etc. I'd imagine that those such as gas fitters will do better. Then the likes of Serco will pick up anything that can be outsourced and any staff that can be TUPE'd.

Graham_Devon

julieq wrote: »

On the cuts in social housing maintenance incidentally, my next door neighbour used to make a very good living doing this for local authorities. He also has a lockup filled with the perfectly good fixtures and fittings he had to rip out of social housing between tenants because the rule was that the housing had to meet a particular standard precisely and the fact that it already exceeded that standard was irrelevant. The public sector is (or was) a very very bizarre place.

Can back you up on this. Completely true.

My entire kitchen is made up of social housing rejects

For instance, 6 foot of worktop with a chunk out of the corner was simply rejected. Of course, not every area needs 6 foot of worktop. You cut it down. Kitchen cupboard doors have scratches on the inside, so were rejected. I personally don't care if there is a scratch on the inside. My sink has a slight scuff in the top corner, which you can't see as it's the side that doesn't show.....and my tap literally had a cap in one of the taps missing so was rejected. Just went and bought a cap!! Tap itself is around £130.

I have interior panelled doors which had a bit of mould on the bottom as they got damp. Simply rub them down with some fine sandpaper, mould is gone. Then undercoat and gloss them (which you would do anyway as they were brand new). But they didnt do that, they simply chucked them.

People could take what they wanted, only provision was that they did not sell it on. If caught, the fines (and loss of job) was severe.

vivatifosi

Well its now official. KPMG appointed as Connaught administrators.

eamon

I would be surprised if Connaught isn't the last to fail. This particular sector is stuffed full of hoops and hurdles coupled with surprisingly many uncooperative service users.

cavework

Many companies such as Connaught work to a schedule of rates for repairs and refurbishment.These are unbelievably tight
There are also turnaround times for empty properties dictated by a lot of the the HA,s. Some are more lenient than others but they usually vary from between 3 days to 14 days with an extension if major problems are found.
These companies are financially penalized if they don't complete in the time given.
HA's are taking advantage of this situation as it is reducing their costs, but TBH are becoming more and more unrealistic on the time scale they allocate to each property
Some are also playing one contractor off against another by splitting the contract and awarding it to two companies.
The end result is a poorer service for tenants.

tomterm8

Generali wrote: »

It's because they're not a HA at all but provide maintenance services to HAs. They don't own the houses.

As I understand it they are a general public sector building contractor, not just maintaining HA housing.

JasonLVC

From what is begining to emerge, the collapse is more to do with bad management rather than government cutbacks.

The comapny has 2 seperate FSA investigations into insider trading, the business brought forward future year contracts to increase the profitability of it in the current year.

This boosted share prices and three Directors then cashed in their chips shortly before the real values for the current year were released causing the share price to collapse. They also seemed to have priced some contracts at a level that were not profit making at all and so thrown into the mix, this gives a very poorly run business which was living on borrowed time (and money).

The government cuts have speeded up the demise of Connaught but only shows how fragile Connaught actually were.

It is unfortunate, but not the last time, we'll see the bigwigs walk away with pockets full of cash whilst the subbies and hard workers get minimum redundancy and a flea in their ear.

Degenerate

JasonLVC wrote: »

From what is begining to emerge, the collapse is more to do with bad management rather than government cutbacks.

The comapny has 2 seperate FSA investigations into insider trading, the business brought forward future year contracts to increase the profitability of it in the current year.

This boosted share prices and three Directors then cashed in their chips shortly before the real values for the current year were released causing the share price to collapse. They also seemed to have priced some contracts at a level that were not profit making at all and so thrown into the mix, this gives a very poorly run business which was living on borrowed time (and money).

The government cuts have speeded up the demise of Connaught but only shows how fragile Connaught actually were.

It is unfortunate, but not the last time, we'll see the bigwigs walk away with pockets full of cash whilst the subbies and hard workers get minimum redundancy and a flea in their ear.

Word on the street is that there were quite a few manilla envelopes flying around too.

cavework

JasonLVC
I am pig sick of these money grabbing suited and booted idiots playing with peoples livilihoods .
They walk away before the s*** hits the fan pocketing anything they can and leave 1000,s of workers unemployed.

Dylanwing

The_White_Horse wrote: »

how can these HA not have unpayable debt? they borrow 220m and then how do they make money to pay this back? surely renting the flats to subsidised filth doesn't raise enough money - especially when they have to give the scum M&S vouchers to pay rent on time, and print idiotic magazines for the filth to read. why don't they simply evict people who don't pay rent rather than spend money trying to enduce payments????

I would just like to point out that my Mother & Father-in-Law are not scum, nor are my many friends in social housing, most of whom work. May I respectfully suggest that you remove your head from your anal passage and try reading something more grown-up than the Daily Mail. Maybe then you will be less of an anally-!!!!!! bigot.