Last updated 18 January 2022
City Building (Glasgow) LLP
Formed in 2006, City Building was previously the direct labour organisation at Glasgow City Council but now operates as an arms-length autonomous company with its own managing director and board and is controlled by two members, the city council and GCC LLP Investments.
The group bids for and works on contracts across the public and private sectors. With a turnover of more than £100 million and a workforce of 1,700 people, City Building is one of Scotland’s largest indigenous contracting companies.
Financials
In the 12 months to March 2021, turnover fell back to £105.6 million (2021: £142.6 million) and losses leapt at an operating level were reduced to £6.7 million (2020: £6.1 million). After tax and before remuneration of members and profit sharing, losses were cut to £8.4 million (2020: £8.9 million).
To view the financials for City Building (Glasgow) LLP, visit Companies House and use Company ID SO300990. For City Building (Contracts) LLP, use Company ID SO301080.
Operations
City Building operates five divisions: construction, repairs & maintenance, specialist services, manufacturing and corporate services. Repairs and maintenance is the largest business in terms of turnover and City Building is responsible for 120,000 homes.
City Building (Glasgow) LLP and its sister organisation City Building (Contracts) LLP are based in Glasgow. The group also runs training academies in Queenslie and Laurieston and Royal Strathclyde Blindcraft Industries (RSBi), a furniture manufacturing plant. More than half of the 240 staff at this factory are disabled. In addition to working as a main contractor, City Building maintains more than 80,000 homes and employs a large number of specialist engineers working in gas and electrical services, lift maintenance and emergency services.
In 2016, after facing escalating losses a deal was agreed that saw Wheatley Group – the parent of Scotland’s largest social housing landlord, Glasgow Housing Association (GHA) – take a 50% stake in City Building.
A subsequent reorganisation of the LLP led to City Building (Contracts) taking on the repairs and investment work for Wheatley. City Building delivers a £33 million a year repair service for Wheatley and is also on a £400 million new-build housing framework (Project ID: 18394404).
City Building is also responsible for Glasgow Housing Association’s £27 million annual capital investment programme and the city council’s own repairs, worth £33 million annually (Project ID: 17340703).
The group also works on other long-term frameworks for external clients, such as a £2 million reactive repairs agreement for Whiteinch & Scotstoun Housing Association (Project ID: 18304815).
City Building’s clients are predominantly in the public sector, notably the city council, and housing associations such as Glen Oaks, North Glasgow and Partick and is on a number of framework agreements in this sector, including a £40 million deal for Home Group (Project ID: 11073863).
In 2021 construction revenue slumped to £15.4 million (2020: £31.1 million). Due to a reorganisation, workload at the repairs & maintenance division had slumped but rebounded from 2019 but this petered out and revenue fell back to £62.3 million (2020: £75.8 million). At the manufacturing division, turnover also dropped, falling to £22.2 million (2020: £32.5 million).
Glenigan Data
In 2021 continued to pick up work for external clients including places on long-term agreements, such as the £100 million Procurement for Housing Scotland EESSH framework (Project ID: 21199472) and the £60 million I-Flair Property Maintenance framework (Project ID: 19292818)
Conclusion: Financial situation worsens
The agreement with Wheatley led to a reallocation of work with City Building (Glasgow) taking on work previously carried out by City Building (Contracts). This led to a fall in turnover, which had been reversed a reduction in construction revenue accelerated in 2021. Over the past two years, turnover from this workstream has decreased by 54%.
The group claimed £10.2 million in furlough money from the government’s Covid-19 relief scheme, but the workforce was still trimmed. In 2021, the average number of employees reduced by 3% to 1,667 people (2020: 1,717 people) and the wage bill was cut by the same amount to £53.6 million (2020: £55.2 million).
The group remains focused solely on work in Scotland and only carries out building work, with a strong exposure to residential and education work and the £250 million contract with Glasgow City Council’s education services department to rebuild or refurbish a string of nurseries and primary schools across Scotland’s most populous city remains the foundations that underpin the contracting division.
As repair and maintenance work has diminished, Glenigan’s data shows that the group began to take on larger construction projects and in 2019 City Building took on a £20 million school in Glasgow (Project ID: 17082513).
However, since then the value of the average contract awarded has reduced significantly and in 2021 this measure was £3 million according to Glenigan’s research (2020: £1 million).
City Building’s financial position had improved with the net pension deficit but this reversed in 2021 to a deficit of £116.6 million (2020: £67.5 million) and net liabilities reduced to £106.1 million (2020: £55.8 million).
City Building has taken on work for other clients and this bodes well but the group still remains heavily reliant on Glasgow City Council and Wheatley Housing for work. The group’s position as a going concern is only guaranteed due to Glasgow City Council’s guarantee to make up any shortfall.
Winning Work With City Building (Glasgow) LLP
City Building is accredited to a wide range of industry standards, including CHAS, Constructionline and the Considerate Constructor’s scheme. The group is certified to ISO 9001 and ISO 14001. City Building has used events such as Meet the Buyer to contact potential new suppliers and subcontractors.
The group also runs a procurement portal for companies interested in tendering for supplies, services and works to City Building. For more information, click here or contact the tender manager.
Key City Building (Glasgow) procurement contacts include:
Head of Procurement & Performance at City Building (Glasgow) – Neil McKendry
Tel: 0141-287-2200
Neil.mckendry@Citybuildingglasgow.co.uk
Head of Client Management & Communications at City Building (Glasgow) – Lesley Quinn
Tel: 0141-287-2200
Lesley.quinn@Citybuildingglasgow.co.uk
Procurement specialist at City Building (Glasgow) – Nicola Dollan
Tel: 0141-287-2200