A TRADE union has claimed that troubled government contractor Interserve was awarded £660 million of public contracts in the months before it faced collapse.

The GMB union, which represents workers at Interserve, said the conglomerate now holds £2.1 billion of public contracts, despite multiple profit warnings.

It was set to fold after its biggest shareholder, the US hedge fund Coltrane, last week opposed restructuring plans

The company’s lenders then took control of the business to maintain it as a going concern in a procedure known as a “pre-pack administration”.

This involves a company moving its assets to another owner before administrators are officially appointed.

EY was installed as administrator and Interserve assets moved to a group controlled by its lenders.

Interserve insisted that the deal would protect services and jobs, although investors have seen the value of their shares wiped out.

The Cabinet Office welcomed the deal, which it said brought the stability required for the company to compete for future business and continue to deliver good value public services for the taxpayer.

The lenders who are now in control of Interserve Group include RBS and HSBC.

GMB cited Tussell – a company that offers data and analysis on public procurement – which said Interserve was a given public contracts worth £432m in 2017 and £233m last year.

The biggest contract last year was awarded by the Foreign and Commonwealth office – £66m for total facilities management services in July.

Interserve – which employs 45,000 people in the UK and 68,000 worldwide – issued profit warnings in May 2016, October the following year and November 2018.

Last December, with debts approaching £700m, the company announced a debt for equity rescue deal.

Since then, the GMB said it has been awarded £6m in public contracts, bringing to £2.1bn the total of such agreements it now holds. The union said the collapse shows that a government hell-bent on privatisation had learnt nothing from the Carillion fiasco.

Carillion collapsed last year with massive debts, thousands of job losses and at a cost to the taxpayer of tens of millions of pounds.

GMB has now launched its Go Public campaign which is calling for an end to outsourcing and privatisation in UK public services and a better deal to the taxpayer.

Rehana Azam, GMB national secretary, said: “Awarding hundreds of millions in taxpayer funded contracts to troubled outsourcing companies is the height of irresponsibility. Interserve was clearly in trouble, and yet ministers saw fit to hand it hundreds of millions of pounds of public money. What on earth were they thinking?

“This government’s obsession with outsourcing has now put another 45,000 jobs at risk, along with thousands more in the supply chain. Ministers have still not taken on board the lessons from the collapse of Carillion.”

Azam added: “The outsourcing sector is descending into chaos as companies underbid each other for contracts in a race to the bottom which will see a serious decline in public services.

“GMB calls time on the outsourcing of public services – it’s a bad deal for the public and a bad deal for the workers.”