Dear Mike
Following the announcement that Westminster City Council face losses of £17 million after the collapse of two Icelandic banks, Westminster UNISON welcome your assurance that there is no threat to Council jobs.
You also stressed that there is absolutely no threat to the delivery of any Council services, however given that the City Council has outsourced a great number of its services to the private sector, please can you confirm what assurances you have been provided with that these companies are financially sound are not similarly exposed to vulnerabilities in the financial markets?
Earlier this year Erinaceous Group, who were responsible for running the City Council's Housing Options Service, went into administration as a result of their share price plummeting by 95% in 12 months. The company was then taken over by Caley Ltd, an investment company established by HBOS, HSBC and LloydsTSB banks. Given the current collapse of the banking industry, what reassurances have the City Council been given by Caley Ltd that their finances are sound?
In the current uncertain climate it seems unlikely that banks such as HBOS, HSBC and LloydsTSB will be in a position to expand and take over companies faced with administration, what contingency plans are in place should more companies providing services to Westminster residents fail?
I would be grateful of your response to these questions, and whether in light of this crisis you have considered bringing any Westminster services back in house.
I look forward to hearing from you soon.
Regards
Phil Vaughan
Branch Secretary
Westminster UNISON
