Derbyshire workers await news as Carillion enters liquidation

Construction giant Carillion - which has a base near Chesterfield - has entered compulsory liquidation.

Monday, 15th January 2018, 11:24 am
Updated Monday, 15th January 2018, 3:50 pm
Thousands of Carillion staff face an uncertain future.

The stricken company, which employs 20,000 workers across Britain including 80 employees at an office on Lindrick Way, Barlborough, said crunch talks over the weekend aimed at driving down debt and shoring up its balance sheet had failed to result in the 'short-term financial support' it needed to continue trading while a deal was reached.

Councillor Anne Western, who represents Barlborough on Derbyshire County Council, said: "This is terrible news for the 20,000 Carillion employees across the UK, including those who work in Barlborough, who must be very worried about their jobs and pensions.

"The Government needs to get hold of this situation to help the employees and maintain the services that the company runs.

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"The question that needs to be asked is why the Government entered into more contracts with Carillion last year when the warning signs were already there that the company was heading into trouble."

Carillion is a key supplier to the Government and has contracts in the rail industry, education and NHS.

The firm is involved in major projects like the HS2 high-speed rail line - which will run through Derbyshire - as well as managing schools and prisons.

Kier Group, the joint venture partner of Carillion, said it has made contingency plans for projects including HS2.

The company said in a statement: "Kier notes today's announcement relating to Carillion.

"Kier currently operates joint ventures involving Carillion on HS2 and the Highways England smart motorways programme.

"We have put in place contingency plans for each of these projects and are working closely with clients so as to achieve continuity of service.

"Following today's announcement and after a short period of transition for these contracts, we do not expect there to be an adverse financial impact on the group arising from these joint venture contracts."

Philip Green, chairman of Carillion, said: "This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years.

"Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future and the board is very grateful for the huge efforts made by Keith Cochrane, our executive team and many others who have worked tirelessly over this period.

"In recent days, however, we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.

"We understand that the Government will be providing the necessary funding required by the official receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers."

The Government was under increasing pressure to intervene to prevent the collapse of the company.

Unions are calling for urgent reassurances over the jobs, pay and pensions of thousands of workers following the news.

Mick Cashe, general secretary for the Rail, Maritime and Transport Union, said: "This is disastrous news for the workforce and disastrous news for transport and public services in Britain.

"We have been warning since Thursday night that we thought the collapse of the company was imminent.

"The blame for this lies squarely with the Government who are obsessed with out-sourcing key works to these high risk, private enterprises."

Brian Berry, chief executive of the Federation of Master Builders, said: "Carillion's liquidation is terrible news for all those who work for the company and it will have serious knock-on effects for the many smaller firms in its supply chain, some of which will be in serious financial danger as a result of Carillion's demise."

Chris Hobson, director of policy at East Midlands Chamber, said: "Carillion does not, at first glance, appear to be involved in any major projects active in the East Midlands, although there are many that feed this region, such as modernisation of the Midlands Main Line south of Corby and the HS2 phase one works.

"However, there are many local firms, mostly in the supply chain for major projects elsewhere in the country, which will be impacted by Carillion's collapse.

"The Government has already said that Carillion staff working on Government contracts will continue to be paid but their money will come through the receivers, not from Carillion.

"But it's vital the Government acts immediately, where possible, to reassure the small and medium-sized enterprises in Carillion's supply chain that the projects will continue, their contracts are safe and their workforces won't suffer as a result of the collapse."

David Lidington, the minister for the cabinet office, said: "It is regrettable that Carillion has not been able to find suitable financing options with its lenders but taxpayers cannot be expected to bail out a private sector company."

He added that employees should still go to work and that they would be paid.