Deal with Hounslow Council covers 11 libraries and had six years to run
Carillion has lost a key contract to provide library services in west London.
The deal with Hounslow Borough Council, which covers 11 libraries, will end on 1 August with the council taking back responsibility for running its libraries.
Carillion inherited the 15-year contract, which was due to run until 2023, when it bought John Laing Integrated Services in 2013.
The company manages library contracts through its subsidiary Cultural Community Solutions, and according to council records the Hounslow deal is worth £5.1m a year.
The news of the Hounslow council contract being ended six years early comes barely a week after the company issued a profit warning, announcing £845m of writedowns and the resignation of its chief executive with immediate effect. It has suspended dividends for the year and is undertaking a complete review of its business.
In a statement to Building, a spokesperson for Carillion said: “The contract for Carillion to provide library services in Hounslow has been ended by mutual agreement and will transfer back to the council on August 1.”
Confirming the decision to end the library services contract, councillor Samia Chaudhary, cabinet member for green policy and leisure at Hounslow, said: “We believe that by bringing this back in-house, we can further improve what is a very valuable service for our residents and integrate this across our wider leisure and cultural services.”
She added: “Our intention is that the service to the public will not change, and there are no plans to close any of the libraries during the transfer.”
The termination of the deal leaves Carillion with three London boroughs where it provides library services – Croydon, Ealing, and Harrow.
A £50m contract Carillion has with Hounslow council to provide parks services, which is due to end in November 2018, will continue. The company spokesperson said: “Carillion continues to run the council’s parks and open spaces.”