The region’s biggest social housing group is lining up contingency measures to ensure repairs at 8,300 Midland homes served by collapsed contractor Connaught still go ahead.
Midland Heart has a £45 million ten-year repairs contract with Connaught, covering 2,000 homes in Birmingham, 3,800 in Coventry and 2,500 in Leicester.
More than 70 local people are employed as a result of the deal.
Connaught has called in administrators KPMG, ending months of turmoil which started when it revealed in June that government spending cuts could blow a £200 million hole in revenues.
But Midland Heart said its residents would see “minimal disruption” to the repairs service and its emergency service would continue as normal.
Michelle Musgrave, customer and communities director for Midland Heart, said: “Clearly the situation is that we still have a contract with Connaught, but we have been monitoring the situation closely. We have the capacity to provide emergency serves to our customer instantly and we have contingency plans in place. There will be minimal disruption in the short term, but we should be able to return to business as normal relatively quickly.”
Ms Musgrave declined to give details of the contingency plan, but said that if the organisation’s contract with Connaught did come to and end, it would have to seek another contractor.
When the contract began two years ago, Connaught recruited more than 70 local tradespeople to work with Midland Heart. Their jobs are among thousands of positions at risk at Connaught.
Nearly 10,000 people across the country work at the firm, but subsidiaries including Connaught Compliance, National Britannia Holdings, Fountains and Connaught Environment will continue to trade as normal.
Over the past few months the debt-ridden Exeter-based firm has been in discussion with its lenders and other potential financiers in a bid to keep the company afloat.
But these initiatives ‘‘failed to reach a satisfactory conclusion in the time available’’, a statement from the board read.
As a result it became ‘‘clear that sufficient support would not be extended to the group as a whole to enable it to continue trading as a going concern’’.
Following the announcement, construction union UCATT called on local authorities to step in fill the void left by Connaught’s demise.
‘‘We are talking about essential services and councils must provide solutions to ensure that these services are delivered,’’ a UCATT spokesman said.
UCATT general secretary Alan Ritchie added: ‘‘Outsourcing is expensive and leads to poorer services. With private contractors, unlike council services, there is always a danger they could go out of business. Councils need to consider taking essential services such as housing maintenance back in-house.’’
Mr Ritchie added: ‘‘The biggest losers are tenants who have genuine fears that vital repairs and maintenance work will not be completed. Councils have a duty of care to ensure that these services are fulfilled.’’