Council chiefs are being urged to hire construction workers left jobless after the demise of Stewart Milne Group – instead of paying millions to private contractors.
The Westhill-based housebuilder collapsed into administration on Monday, leaving 217 people out of work with immediate effect.
It came after SMG’s bank rejected two offers for the business – one of which believed to be from the firm’s founder and owner Stewart Milne – and pulled all of its funding.
Running dozens of projects across Scotland and England, the group was established in 1975 and put up for sale in April 2022.
Insolvency experts from Teneo Financial Advisory, appointed as joint administrators for SMG and six of its subsidiaries, said 112 employees will be retained for now.
However, the future of the firm’s projects that are yet to be built remains unclear and hundreds of other sub-contractor jobs are also at risk.
And in light of the “terrible news”, Aberdeen Trade Union Council officials have called for the local authority to step in and offer employment to those affected.
Could hiring more in-house staff help balance council’s budget?
Stressing the vast impact of SMG going bust, trade union boss Tommy Campbell urged the council to stop “paying over the top” for private contractors and hire those affected as in-house staff.
He also accused top brass of spending millions on “outsourcing” when they are already struggling with balancing the books.
It is predicted another £20m would need to be slashed from public spending in 2024-2025.
And Mr Campbell thinks employing “direct labour” for major city projects could help.
He added: “There will be hundreds of workers affected by this decision [SMG’s collapse], as well as many other businesses who may be owed money too.
“The council have for years used agency workers and outsourced construction work to private contractors because they claimed they didn’t have enough staff of their own.
“But now they could offer jobs to these unemployed construction workers, saving money by employing direct labour rather than paying over the top to agencies or private contractors.”
How often does this happen?
This is not the first time the local authority has come under fire for handing out valuable contracts to private firms.
Most recently, union chiefs voiced concerns about them appointing external workers to upgrade hundreds of council properties for Ukrainian refugees.
The reason was said to be lack of enough in-house staff.
The long-awaited £30 million refurbishment of Union Terrace Gardens was also carried out by London-based Balfour Beatty.
And in 2019, Chap Group – a private company based in Westhill – was appointed to build 369 homes on the site of the demolished Summerhill Academy on Lang Stracht.
Meanwhile, the council’s scheme to build 300 affordable homes at Craighill and Kincorth will also fall into the hands of an outsider.
The project was put out to tender again last year after the local authority stopped work at the site in 2022 due to rising building costs.
What does the council say?
However, council co-leader Ian Yuill told The Press and Journal they hire in-house staff – as well as external contractors – according to what’s needed for each project.
He stressed their teams are under constant review, and all decisions are made to “best serve the people of Aberdeen”.
While Mr Yuill expressed concern for the mass loss of jobs following the collapse of Steward Milne Group, he didn’t confirm whether hiring the workers is an option.
He added: “It’s obviously very concerning, and I can’t begin to understand how those affected must be feeling today. I certainly hope that they all get new jobs very quickly.
“The council and other agencies involved have a well-practiced routine for when there is a significant loss of jobs like this, and we will do our best to support those affected.”
A spokesman for the council, which is a member of the Partnership Action for Continuing Employment (PACE), said there are many avenues of support.
He added: “We stand ready to provide support to any of Stewart Milne Group’s employees resident in Aberdeen during what we appreciate is a difficult time following the announcement that the business is being wound up.
“The council’s ABZWorks employability service offers a broad range of support to help people into employment, education, or training.
“And working alongside other PACE partners we will ensure that support is available to anyone who needs it, to rapidly move them back into employment.”
Revealed: How often are the top-paid brains running Aberdeen working from the city centre?
Conversation