Carillion collapse sparks political war of words in Sunderland

Conservative and Liberal Democrats say they both raised concerns over Siglion, the firm created in partnership between Sunderland City Council and the now out-of-business construction company, for months in the lead up to Monday’s announcement that the builder and services organisation had gone into liquidation.

Work has halted on the Vaux site office building.

The council has said Carillion had paid its investment to the company in full before ceased trading due to debts of £1.5billion.

In a statement, Councillor Harry Trueman, deputy leader of the council, said on behalf of the Labour Group: “Hindsight and hypocrisy are marvellous things that the Conservative and Liberal Democrat are now specialising in about Carillion.

“Oh, how the worm has turned, when in December 2014 the Tory and Lib Dem Coalition were lauding the merits of public and private partnerships and throughout their term of office.

“This council helped create the Siglion joint-venture to attract investment and continue our city’s regeneration, and went to the private sector to achieve this in 2013 completing the arrangement in November 2014.

“The council’s joint-venture means that councillors represent this city’s interest on the board.

“Now, with their usual misguided hindsight, Conservatives and Liberal Democrats are again making cheap distraction comments to deflect the blame.

“Absolutely, this council will work with the utmost haste to resolve this urgent issue.

“Their comments would be better directed at their masters in Government and the role they have taken in exposing our city and workers up and down this country to unnecessary risk.”

The council’s Tory members say they had urged the council to make the arrangement between the parties clear to reassure residents over the future of the Vaux site, as well as the regeneration plans for Seaburn, while Liberal Democrat Councillor Niall Hodson said he believed the council had been “alarmingly short on specifics” on details about the legal and finance arrangements.

Today, Councillor Robert Oliver, leader of the council’s Conservative group, said work should start again on the Vaux plot with a new developer.

He added: “The Government has been making contingency plans since the first profit warning issued by Carillion and it is right that public sector contracts and services are supported, but the joint venture with Sunderland council is a different matter.

“We are now asking the council to make it clear whether the taxpayer - locally or nationally - will be liable for any joint venture costs incurred by Siglion so far now that Carillion has been liquidated and whether another developer can be contracted.

At a meeting of the council’s Economic Prosperity Scrutiny Committee in December, Conservative Councillor Michael Dixon asked Siglion’s chief executive, John Seager, whether Carillion’s problems could have an impact.

In response, Mr Seager advised the committee “that he was not in a position to answer questions about Carillion” and said Siglion was not reliant on continued investment to facilitate its business plan.