Freelance

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Jamie Hailstone is a freelance journalist and author, who has also contributed to numerous national business titles including Utility Week, the Municipal Journal, Environment Journal and consumer titles such as Classic Rock.
February 6, 2018

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Construction

More than 800 Carillion redundancies confirmed

More than 800 workers are to be made redundant following the collapse of construction giant Carillion, the Official Receiver has confirmed.

The Receiver announced yesterday (5 February) 452 posts are being made redundant, on top of the 377 it announced were going last week.

In a statement, the Receiver said the latest 452 job losses are in roles connected with “private and public contracts across different parts of the country”, including back-office roles.

Safeguarding

However, the Receiver also announced it has now safeguarded another 100 jobs, mostly linked to public sector contracts on top of the 900 confirmed were safe last week.

“Most staff will be transferring on existing or similar terms, something I will continue to facilitate wherever possible to find new providers to Carillion’s remaining contracts.”

The construction and outsourcing giant employed more than 20,000 people in the UK when it collapsed last month with debts of more than £1.5 billion.

Financial support

Subcontractors and small businesses affected by Carillion’s demise have also been offered financial support by the British Business Bank and its partners.

The Bank announced at the weekend it would make £100 of lending available to contractors, who may not have sufficient assets to access conventional loans through its Enterprise Finance Guarantee (EFG) programme.

“To help in these exceptional circumstances, we have designed additional flexibility into EFG that could be particularly suitable for firms in the Carillion supply chain,” said bank chief executive, Keith Morgan.

“We would encourage lenders to work with their customers to use these new flexibilities to meet their needs.”

Warning signs

And ahead of today’s appearance of former Carillion directors in front of a joint session by the work and pensions and the business, energy and industrial strategy parliamentary committees, the two committees have published evidence of the board’s “apparent long-term indifference towards its pension obligations” and a series of warning signs about the company’s position.

The documents from the assessors going back to 2012 flag up a number of warning signs about the company’s position and illustrate the chronic underfunding of the schemes and the low priority Carillion directors gave their pension obligations.

“It is clear that the directors of this company trampled over the rights of their tens of thousands of pension scheme members,” said work and pensions committee chair, Frank Field.

“Their main focus was paying out fat dividends and bonuses that exceeded their cashflow, all the while stiffing their suppliers, borrowing mega sums of money, and allowing their liabilities and pension deficit to balloon to ruinous levels.”

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