City Building, the arm’s length firm set up by Glasgow City Council, generated £5.29m in returns to the city council, to be reinvested in services across the city, its annual results published this week show.
The financial results for 2015/16 reveal the funds returned to the city council are up 5.8% on last year’s figures, despite a fall in turnover from £215m to £209m.
The news comes as City Building, which employs over 2,000 people, prepares to finalise a 50/50 joint venture with the Wheatley Group, the parent company of Glasgow Housing Association. Both organisations signed up to the joint venture earlier this year in a move which will guarantee jobs and create thousands of apprenticeships over the next 20 years.
Council leader Frank McAveety also revealed that, since it was established almost ten year ago, City Building has now contributed over £50 million to the city council’s finances.
He said: “The UK’s construction sector is facing particularly challenging times, which makes the performance of the team at City Building all the more impressive.
“When we set up City Building almost a decade ago, it had two key objectives – to compete successfully in the marketplace and to set new ethical standards for business. Winning over £1.3billion of competitive tenders certainly achieves the first, and the company’s forward-thinking, socially-inclusive approach continues to make an enormous contribution to the wellbeing of the city.
“For example, it’s one of the largest providers of apprenticeships in the country, currently employing a total of 324 apprentices, with 70 young people completing their training this year alone.”
A major schools contract awarded to City Building has made a significant contribution to the 2015/16 results. The £250m contract to rebuild or refurbish more than 111 schools and other educational facilities across the city delivered a major boost to revenues.
City Building executive director Graham Paterson said: “We compete for work on the open market against many major private companies, and securing contracts in such a competitive market underlines the high level our people operate at. The year ahead is a very significant one for us and we’re pleased to be entering the new joint venture in such robust shape.”
Unite’s Dave King, chair of City Building’s trade union committee, said: “The trade unions are delighted with these results and the joint venture will allow our business to grow in partnership with the Wheatley Group, creating strong foundations for the future.”
The accounts also show that turnover at City Building’s RSBi subsidiary dropped from £27m to £25m, mainly due to the completion of a major office rationalisation programme, for which RSBi manufactured much of the furniture.
Over 50% of RSBi’s 260 staff have a disability, including HM Forces veterans from recent conflicts in Afghanistan and Iraq. 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.