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Collapse of Connaught Group proves a headache for councils

The collapse of social housing company Connaught Group has left many councils around the UK with a major headache today. This is a multimillion pound company which was in charge of various large contracts up-and-down the country in relation to social housing and other local authority services. The company recently suspended its shares after failing to plug a £220 million funding gap and indeed the company has now called in administrators.

Local authorities, who are also working on a shoestring budget, are frantically attempting to find new contractors to take over the business which was ultimately in the hands of Connaught Group. The administrator for the group has confirmed a number of companies have stepped forward to take over existing contracts although this will take some time to resolve and some time to complete.

In simple terms, the recently announced austerity measures are starting to hit home in the public services sector with many local authority services already contracted out to various companies in the UK. There will be much anger and much concern in local council offices as carefully laid down plans begin to unravel. There's no doubt that companies will step forward to take over existing contracts and existing services but this will not happen overnight.

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