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Legal row over Norwich CityCare contract

PUBLISHED: 11:02 10 February 2010 | UPDATED: 08:03 02 July 2010

Sarah Hall

Contingency plans are being put in place to ensure the city's streets get cleaned and rubbish collected - because Norwich City Council is involved in a High Court challenge over its CityCare contract.

Contingency plans are being put in place to ensure the city's streets get cleaned and rubbish collected - because Norwich City Council is involved in a High Court challenge over its CityCare contract.

CityCare, which employs more than 650 people in the city, has provided these services and others, including fixing council houses, for the past decade,

But its parent company, Morrison, was today due to seek an injunction to stop the council awarding a £24.2m contract to take over its work to a rival company.

Legal action has been launched through the Chancery Division of the High Court, with Morrison claiming the process by which the new contractors were selected was unlawful.

The new contractors are due to take over on April 1, so if a judge does grant an injunction the process could be held up and the city council could find itself in a situation where contracts have not been signed in time.

It is understood the city council is working hard behind the scenes to ensure services such as rubbish collection and street cleaning are not disrupted should the legal challenge succeed.

However, council bosses today pledged to fight the legal challenge, saying they were confident the process to award the new contracts was fair.

Philip Hyde, head of legal services for Norwich City Council, said: “We will strongly contest this legal challenge as we believe the contracts were fairly awarded and the successful contractors will provide better services for local residents.

“The aim of re-letting our major contracts is to ensure the best possible services and value for money for our residents and local businesses. It was absolutely essential this was a rigorous exercise and was conducted properly.

“It should be pointed out that Morrison was awarded three separate contracts - building maintenance, street cleansing and water testing - only to withdraw its bids.”

CityCare was told in November that City Hall intended to award the bulk of the contract to Exeter-based Connaught.

Connaught's winning £24.2m bid included the £2.8m seven-year contract to collect waste, refuse and recycling along with the £17.4m contract to repair, improve and maintain Norwich's council houses.

But a spokesman for Morrison confirmed legal proceedings in the High Court were going ahead: “The company has taken this action as a result of considerable concern regarding deficiencies of the procurement process. This is an entirely unprecedented move by Morrison and is a decision which has not been taken lightly.

“Morrison's concerns are that the people of Norwich could suffer from a decline in services compared to those they currently receive and that the future job security of the CityCare workforce could be at risk.

“Morrison hopes these legal proceedings will help to mitigate these risks and provide protection for the CityCare workforce.”

The legal challenge comes on the same day that Norwich City Council is expected to hear whether it can become a unitary authority and take on a sheath of extra responsibilities.

If a judge decides that the procurement process was flawed, the cash-strapped city council, which already has to make £8m of savings over the next two years, could have to start the process all over again, or could face a compensation claim.

The authority's planned council tax increase for this year, of 2.4pc for a Band D home, has been based partly on savings the authority would make by giving the former CityCare contract to other companies.

The council's executive was due to rubber-stamp that budget tonight, along with the award of the contracts. However, an injunction would make them unable to award that contract to the frustration of the company lined up to replace CityCare.

Peter Jones, chief executive of Connaught Partnership Limited, said: “In order to win these contracts we went through a lengthy and extremely rigorous process.

“The mobilisation of the contract is already under way to ensure a seamless transfer of service on the April 1.”

Do you have a council story? Call Evening News reporter Dan Grimmer on 01603 772375 or email dan.grimmer@archant.co.uk

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