The construction industry and employer groups have reacted with alarm to the news of Carillion’s liquidation – and called on the government to ensure a knock-on effect is not felt across the supply chain and among employees.
Civil Engineering Contractors Association chief executive Alasdair Reisner said: “Today’s news is extremely worrying for Carillion’s staff and suppliers.
“In this challenging climate, it is vital that industry and government work together to provide support to those affected by Carillion’s liquidation. We will work with the government and other industry representatives to identify where and how this support can best be provided.”
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Federation of Small Businesses (FSB) national chairman Mike Cherry said: “It is vital that Carillion’s small business suppliers are paid what they are owed, or some of those firms could themselves be put in jeopardy, putting even more jobs at risk besides those of Carillion’s own employees.
“These unpaid bills may well go back several months. I wrote to Carillion back in July last year to express concern after hearing from FSB members that the company was making small suppliers wait 120 days to be paid. Sadly these kind of poor payment practices are all too common among some big corporates.
“When the dust settles on this sorry saga, there is also a wider lesson to learn about the concentration of public contracts in the hands of a small number of very big businesses.
Jim Kennedy, national officer with the country’s biggest union Unite, said: “These have been a grim few days for this workforce. They will head into work today not knowing if their wages, pensions and even their jobs are safe.
“The administrator must provide reassurances on these to the workforce as a matter of urgency, and also that vital public services on which many depend will continue to be provided.
“One thing is evidently clear from this: there must be no business as usual for big business. There has to be an urgent inquiry into how a company that loaded itself with debt, which undercut competitors with unsustainable bids, which hoovered up vats of public money, and that had repeatedly alerted the government to its own financial shortcomings got its hands on so much of the public sector and taxpayers’ cash.
“We are also very concerned about the impact of Carillion’s collapse on the wider supply chain. Many of these small firms are the lifeblood of their community but their exposure to Carillion’s debt puts them at serious risk.”
Chief executive of the Association for Consultancy and Engineering, Dr Nelson Ogunshakin, said: “It’s always a sad day when a company goes into liquidation, putting at risk thousands of jobs and livelihoods. The collapse of Carillion also has a number of major ramifications for our industry.
“In the immediate term, we need to ensure that our members from the consultancy and engineering sector, who worked with Carillion on some of the key infrastructure contracts they held, are paid. There are always competing interests when a company goes into liquidation, but the importance of our members to delivering the nation’s infrastructure is such that we would argue they should be at the front of any queue. We will lobby the government and creditors to ensure that this is the case.”
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