MORE than £9 million will be returning to Glasgow City Council after its arms-length construction firm grew underlying profits by 34 per cent to £7.25m, new figures have shown.
City Building has grown the amount it returns to Glasgow City Council by 71 per cent from last year’s £5m return after revenue increased by more than five per cent to £219m.
Results for City Building’s 2016/17 financial year show the return represented a greater proportion of turnover than the previous year, amounting to 4.1 per cent compared with 2.5 per cent.
City Building saw its net liabilities increase to £51m, from £16.1m last year. This is because of an increase in the net pension deficit of the Strathclyde Pension Fund, to £51.3m from £17m. Through its relationship with the council, City Building employees are part of this fund.
On April 1, at the start of the current financial year, City Building entered into a £3.7 billion joint venture with Wheatley Group, the social landlord which is the parent company of Glasgow Housing Association.
The deal safeguarded hundreds of jobs and meant the council's repairs and maintenance contract with the Wheatley Group did not have to go out to tender.
Over the duration of the 30 year deal, City Building said £225m would be returned to the city. In the last year of operations before the joint venture with Wheatley Group commenced, revenue in the repairs and maintenance divisions was up four per cent to £122m.
Revenue in the construction division was up 8.8 per cent to £64m.
Graham Paterson, executive director of City Building, said: “Despite challenging market conditions in the construction sector City Building has continued to grow and secure significant contracts in open competition with the private sector.
“We are pleased that our improved performance will help to support public services and create job opportunities across the city.
In the year City Building won more than £1.3 billion of new business. This included a £250m contract to build or refurbish more than 111 schools and other educational facilities across Glasgow continues to make a significant contribution to its financial results.
Among the new build facilities and refurbishment projects it is delivering are Avenue End Primary, Broomhill Primary School and Clyde Campus School.
The results also show that City Building’s manufacturing division, RSBi, achieved 8.8 per cent growth with turnover rising to £27.2m from £25m.
RSBi operates as a social enterprise and half of its 260 staff, which includes veterans of the Iraq and Afghanistan war, have a disability
New projects secured in the past year include several commissions within the student accommodation market, furniture supply to the NHS, Scottish Prison Service and Scottish Fire & Rescue as well as a range of timber kits for various housebuilder clients.
City Building employs more than 2,200 staff. Since it was established in 1996 it has recruited more than 1,100 apprentices.
“Our success is a testament to our hard-working staff and apprentices and they should all be proud of their contribution to our strong results,” said Mr Paterson.
A study commissioned by City Building to celebrate its 10th year since breaking away from the council found that through its economic impact, the business supports 3,877 jobs in Glasgow.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here