Losses at Greenwich Council’s spin-off firm, GS Plus, have more than doubled, a year after its bosses warned it faced trouble because of a decision to pay all staff the London Living Wage.
GS Plus lost more than £2.8 million in the year ending March 2018, according to figures submitted to Companies House last week. It mainly provides services to Greenwich Council, such as transport, catering, cleaning and IT. It also works on some contracts for other organisations, including Bromley Council. The previous year’s loss was £1.2 million.
Its sister company, Greenwich Service Solutions (GSS), which provides similar services but with a greater emphasis on securing outside contracts, made a profit of £50,983, down from £227,358 the previous year. It also warned last year of problems ahead due to the switch to boost staff pay, and has been hit hard by the loss in 2016 of a contract to supply catering to Kent schools.
Both companies are now concentrating on “consolidating and improving their core businesses”, their annual reports say.
Until June, the council’s former deputy leader Peter Brooks was on the board of both companies, pocketing an extra £4,000 on top of his annual council allowance for each directorship. He has now been replaced at GS Plus by Charlton councillor Gary Dillon and at GSS by Peninsula’s Stephen Brain. The GS Plus directorship was initially meant to go to Glyndon councillor Tonia Ashikodi before she was charged with fraud and perverting the course of justice, charges which she denies.
At the start of 2018, Greenwich Council’s cabinet heard the the operating models of both companies, which were set up under the administration of former leader Chris Roberts, were being reviewed. It is likely that the matter will return to the cabinet next month.
Asked about the review and whether Greenwich taxpayers were effectively subsidising services in other areas through the loss-making GS Plus, cabinet member for finance Christine Grice told 853: “The company has been consolidating its business and at the same time options are being reviewed that will form its future direction. As part of the consolidation we have renegotiated our positions with some customers that will improve trading conditions.”