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Norwich City Council announced last night that 300 Connaught staff who had worked on repairs and maintenance for the city鈥檚 social housing stock would be laid off.

Council leaders could not find a company willing to take on the 拢17.5m deal agreed in December that was accused by rival bidders Morrison of being 鈥渁bnormally low鈥�, despite negotiations over the weekend.

The vast majority of other Connaught contracts have been bought by Morgan Sindall and Mears, and the Norwich contract is now just one of five deals that administrator KPMG has not been able to sell on.

As a stop-gap measure Lovell, Morgan Sindall鈥檚 social housing arm, has been drafted in to do emergency repairs for a number of months.

A spokesperson for the council said it would have to re-tender the entire contract in line with OJEU rules, which could take a number of months, because it was not possible to change aspects of the contract such as profitability without re-tendering it.

鈥淵ou can鈥檛 take one bit of the contract and change it,鈥� she said.

Council leader Steve Morphew criticised the timescale set by administrators KPMG, and blamed an inflexible system for transferring contracts for the job losses.

鈥淚n the short term, we have saved over 200 jobs and are keeping services ticking over, but a lot more needs to happen quickly. We were hampered by the tight timescale set by the administrator, the rules that mean local authorities can鈥檛 transfer contracts like private businesses can, and the increasingly uncertain outlook for other contractors in the economic climate.

鈥淲e have got to look carefully at all the options. The irony is that we have the cash to do the work and the workforce is ready to do it. There is something wrong with the system that does not allow us the right to use common sense, and that costs 300 Connaught staff their livelihoods,鈥� he said.

However, 200 staff working on a second contract for waste, rubbish, recycling, street cleaning, grounds and tree maintenance have had their jobs secured. This contract will be carried out by Connaught Environmental, a division of the business that was not taken into administration.

Staff being made redundant will be offered support by the council through a special event at St Andrew鈥檚 Hall and Blackfriars鈥� Hall on Wednesday 22 September at 11am-3pm, where they can access advice about financial issues, benefits and job search.