DOZENS of roofing contractors suspected of cheating to win public contracts in London and the North West are being pursued by investigators from the Office of Fair Trading.

Companies from the capital, Lancashire and Merseyside have been interviewed by OFT officials. They are accused of forming cartels that have artificially driven up the prices of local government contracts by hundreds of thousands of pounds.

It is understood that contracts in London that are under examination include work on schools, council offices and health centres. In some cases payments of more than £50,000 have been made to roofing companies to lose a contract deliberately, insiders have claimed.

The disclosure comes after OFT investigations in Scotland, northeast England and the Midlands into alleged market corruption. Officials discovered that construction contracts worth up to £500 million had been subject to collusion.

One roofing industry specialist told The Times: “They have uncovered a string of cartels that link across the country. These companies collude with their competitors to win contracts and drive the prices up.”

The flat-roof industry is worth £341 million a year. For a cartel to work, it needs the co-operation of rival companies to ensure that a chosen company wins a contract at an inflated price. A cartel member chosen to lose a contract might agree to submit a high bid; another might abstain or withdraw its bid from the tendering process.

OFT officials have the power to break into, bug and eavesdrop homes and hotel rooms, track vehicles and follow suspects. Using the lure of a leniency deal for anyone who reveals cheating, the OFT has so far persuaded at least ten companies to give evidence against fellow cartel members.

Simon Williams, the OFT’s director of cartel investigations, said that whistle-blowers such as secretaries could volunteer to work as paid undercover agents. Gordon Banks, Labour MP and member of the All-Party Study Group for Construction, praised The Times for addressing the subject of collusion and said that the topic will be discussed in Parliament. He said: “If we are paying more than we should as taxpayers then every possible effort must be made to prosecute these people.”

The Times also disclosed yesterday how construction companies will be the target of undercover investigators to prevent them from rigging bids related to the 2012 Olympics.

Chris White, the chairman of the regeneration board at the Local Government Association, said last night: “Everyone’s fear is that this great project is not going to work if people are going to collude over the contracts and drive the costs up. It would ruin the event and could leave local authorities destitute.”

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