A failing contractor has been given a second chance to rescue its multi-million pound deal with Leeds City Council.
Morrison PLC, which looks after 37,000 council homes in south and west Leeds, had already been given a three month period to improve its service in April but after continued failings, the firm now has until December 31 to prove its worth.
The announcement comes after a payroll dispute with employees brought the threat of strike action from around 220 of the firm’s Leeds workers.
Morrison is 18 months into a five year £35m-a-year contract with the council, which was expected to save the council up to £4m a year after taking over from a collection of firms.
Coun Peter Gruen, the council’s executive member for neighborhoods and housing, said: “Every option is on the table, I have ruled nothing in and nothing out.
“What I will say is 18 months into the contract we clearly are not in the place we wanted to be.”
Asked if the council could cut the contract short, Coun Gruen said: “You can’t keep on having improvement plans.”
He added: “I think the repairs service as a whole concerns me at the moment, never mind strike action, and I think if there is strike action it certainly can’t make things easier for the company.”
In recent weeks the Paragon Community Housing Group terminated a £10m-a-year five year maintenance contract with Morrison after just two years, while Thurrock Council announced its contract with the firm would not be extended due to “disappointing” results.
All three unions representing the firm’s Leeds workers – GMB, Unite and UCATT – have said they disagree with the council outsourcing maintenance work to private firms.
Jon Smith, GMB regional officer, said: “I think they (Morrison) have made promises to the council that ultimately there are question marks as to whether they can keep them.”
He added that neither Morrison employees or union representatives have been made aware of a second improvement plan and fears that Morrison may use it to impact on the workforce.
A Morrison spokeswoman said that the firm had nothing further to add.
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