Carillion Collapse – the Ongoing Story

Carillion Collapse – the Ongoing Story

20th February 2018

We’ve already covered the collapse of Carillion which has left the construction industry reeling in shock as 2018 began.  This collapse is likely to have long term implications for both the British economy and the construction sector in particular.  So many smaller companies and other workers within our industry are likely to feel the effect of Carillion’s demise and Carillion’s employees and its supply chain are caught up in the fallout.  The Trades Union Congress have proposed the launch of a centrally co-ordinated Task Force to address the economic and commercial impact of the Carillion fiasco.  

The Task Force comprises representatives from business, construction trade associations, the trade unions, lenders and the government.  The first meeting was chaired by Business Secretary, Greg Clark and discussion centred on supporting and monitoring the impact on small businesses and construction workers.  The TUC, which is part of the Task Force, has claimed that it will press for the transfer of private sector contracts to alternative providers with jobs, pay and pensions protected, combined with a comprehensive support package for at-risk workers, apprentices and small businesses.  The TUC is also looking for protection for the agency and zero-hours contract workers on Carillion contracts so that they can recover any unpaid wages.

Frances O’Grady, General Secretary of the TUC has welcomed the government’s agreement to set up the Task Force, saying that urgent action is necessary in order to protect jobs, pay and pensions.  The TUC has also called for Carillion’s public service contracts to be brought back under government control in-house, coupled with an urgent risk assessment to be carried out on other large outsourcing companies, followed by a moratorium on future outsourcing of this type.  

Carillion went into liquidation early last week, threatening the jobs of thousands of jobs, 20,000 of which are here in the UK.  The company held around 450 government contracts which include those in the education, justice, defence and transport ministries, leaving the government needing to find funding to maintain the public services that were, until recently, provided by Carillion.  

Following the meeting, Greg Clark said in a statement that the meeting “got key people round the table to drive forward steps that we believe can give confidence to workers and the supply chain, support from banks, the ability to link workers with employment and support for apprentices”.  

So far, some of the big banks have agreed to provide support to small businesses which have been adversely affected by the crisis, along with HMRC.    Lloyd’s Bank announced a £50 million support package for small business customers who are affected by the fallout from the Carillion liquidation.  The Royal Bank of Scotland (RBS) is offering £75 million worth of assistance, whilst HSBC has pledged £100 million.  These were all amongst the banks that stopped backing Carillion after the government refused to insure its debts.  Meanwhile, the Nationwide building society has offered to take in-house jobs that were previously performed by Carillion.

We’ll be bringing you more news on this ongoing story as it develops, so why not follow us on Facebook and Twitter to ensure that you’re kept up to date with future developments?