A CONTROVERSIAL construction firm set up by Labour council chiefs is facing the prospect of dismantlement in a bid to safeguard up to 1,000 jobs.
Glasgow City Council is in talks over the future of its highest profile arms-length body City Building, including proposals for half the workforce to become employees of the country's biggest social landlord, the Wheatley Group.
There are mounting concerns it could lose its £200 million repairs and maintenance contract with the Wheatley Group, formerly Glasgow Housing Association, when the deal comes up for renewal.
City Building staff also fear the firm's previous leadership, now running a rival joint venture with North Lanarkshire Council, could steal the contract, which currently generates over 90 per cent of its income.
If the move goes ahead it will also underline a major power shift in Glasgow, with the Wheatley Group's power and influence rivalling that of the city council and the landlord increasingly dictating the terms of its relationship with the authority.
The landlord, which had originally been set up as a temporary body by the council over a decade ago, has recently taken over a number of major housing associations across Scotland and provides neighbourhood relations teams through to legal services to others in the sector.
Sources claim the move is politically fraught given the importance of City Building to both the city council and the Labour Party over issues such as apprenticeship commitments and employment opportunities for the disabled.
Other options include taking the risk and bidding for the contract when it comes up for renewal or the Wheatley Group becoming a part owner of City Building, potentially dispensing with the need to put the deal out to tender for around 20 years.
Wheatley Group bosses are understood to be keen on incorporating 1000 City Building staff as it seeks to continue expanding its social housing empire and would save itself tens of millions of pounds in VAT by bringing the work in house.
Unions representing City Building's 2200 workers are now seeking talks with the council's leader Frank McAveety and Wheatley Group chief executive Martin Armstrong.
One senior City Building source said: "We've had a number of meetings and there's a case to be made for securing the work. Our concern is how you split the company in two.
"Our previous bosses now run (repairs firm) Mears and will know the contract inside out. Our work refurbishing the Glasgow primary schools ends in 2017. The order books after that are up in the air.
"GHA are also fed up with the negative headlines around City Building. They wouldn't have that if it was their own operation."
Another source said: "This is Glasgow power politics in action. The council needs a solution and GHA can benefit from it. It stands to gain massively from a problem the council faces.
"It's a shift from GHA being beholden to the council. They smell a wounded animal with the administration expected to change in 2017, deal almost entirely with Scottish Government ministers and taking over half the council's baby is laden with symbolism."
A GHA spokesman said: “The current repairs contract ends in March, 2018. We are looking at a range of different solutions for how we deliver the repairs service after that in a way that best meets the needs of our tenants.”
A City Council spokesman said: “We are determined to protect City Building’s unique apprenticeship programme, and the excellent work done by RSBi, as well as ensuring long term stability for jobs in the organisation. Everything we do between now and the end of the contract will be geared towards meeting those aims.”
A Unite spokesman said: "Our significant membership at City Building want clarity regarding these developments. We are looking to meet with senior council officials at the earliest possible opportunity to seek reassurances over the security of these skilled jobs."
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