2 Feb 2004

Interserve Plc (Interserve) has transferred its housing maintenance contract with Liverpool City Council (LCC) to Enterprise Plc with effect from 2 February 2004.

Since starting the contract in April 2000, Interserve has performed housing maintenance services worth over £110 million, and has achieved substantial savings for the benefit of LCC and its housing tenants.

During 2003, the significant reduction by LCC of its housing stock (through a series of transfers to registered social landlords) and reductions in the budget available for the maintenance of its remaining housing stock have impacted the viability of Interserve's contract. As a result the housing maintenance activity now needs to be combined with other Council services in order to continue to provide value for money to LCC and an appropriate return to the service provider.

Interserve is making a one-off provision within operating profit in its 2003 results of £5.5 million, predominantly in respect of pension obligations associated with this contract.