Unions reaction to Interserve rescue plan
Unions have responded to plans to rescue Interserve, one of the UK’s largest providers of public services.
Some 70% of the firms’s £3.2bn turnover comes from government contracts. Its market value has plummeted to £17m, down from £500m in 2017, prompting fears it would become another Carillion. The rescue plan involves cutting the firm’s debts from over £600m to £275m by issuing new shares.
GMB national officer Kevin Brandstatter said: “The deal Interserve reached with creditors leaves a lot of unanswered questions for GMB members working in the NHS, the Ministry of Defence, the probation services, schools and local authorities. It appears that under the plans to convert debt to equity, Interserve will continue to make losses for at least another seven years.
“GMB is concerned in order to pursue this strategy Interserve will seek to attack pay, pensions and other terms and conditions of employment. We fear rather than resolving Interserve’s issues, this deal will simply delay the company’s inevitable demise.
“Irrespective of the manoeuvring of the shareholders and creditors, the jobs of some 45,000 Interserve employees, and thousands of others in the supply chain remain under threat. The government has still not taken on board any lessons from the collapse of Carillion.
“The outsourcing sector is descending into carnage as companies underbid each other for contracts in a race to the bottom which will see a serious decline in public services.
“The rot must stop; GMB calls on the government, NHS trusts, local authorities and schools to end the menace of outsourcing, bring contracts back in house, and use the savings to improve public services for all, rather than provide profits and bonuses for the tiny minority of executives and shareholders.”
Prospect national secretary Ben Middleton said: “News that the Interserve deleveraging plan has been agreed in principle will be cautiously welcomed by our members. If implemented it should avoid a Carillion-style collapse and provide some employment security for workers.
“We call on all parties involved to work together and ensure this plan is successful and jobs are safeguarded.”
- Like this story? Please support our work here.