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.