Carillion crisis: tens of thousands of jobs at risk
Tens of thousands of jobs could be at risk in the construction industry, including many in the health and safety sector, following the collapse of Carillion.
The second largest construction firm in the country went into administration yesterday, after the company failed to secure additional financial support.
On Tuesday morning, it was announced that government ministers were meeting in Downing Street to discuss the impact of the potential 19,000 UK job losses – and the impact of the liquidation on the taxpayer.
Carillion had been in trouble for sometime, having issued two profit warnings, and had debts of around £1.5 billion before it went into administration.
‘Very sad day’
Speaking yesterday, the company’s chairman, Philip Green, said it was a “very sad day for Carillion”.
The construction company directly employed more than 20,000 and had a strong record on health and safety.
In 2016, Carillion Services UK won an International Safety Award from the British Safety Council in recognition of its commitment to keeping its workers and workplaces healthy and safe. It was one of just 30 organisations to receive a distinction in the awards, scoring 59 out of a maximum of 60 points.
And in 2015, its joint venture with Jacobs and Atkins (ACKtiv Nuclear) has secured a Gold Medal from the Royal Society for the Prevention of Accidents (RoSPA) in recognition of nine consecutive Gold Awards.
The Cabinet Office minister David Lidington, said the government has been “closely monitoring the situation” since Carillion first issued profit warnings in July.
“We understand that some members of the public will be concerned by recent news reports,” said Mr Lidington.
“For clarity – all employees should keep coming to work, you will continue to get paid. Staff that are engaged on public sector contracts still have important work to do.”
The RMT union has today demanded that Government classify all Carillion rail works as public sector contracts and take their functions in house.
“We have been told this morning that only Carillion workers on what the Government defines as “public sector” contracts will be guaranteed their wages,” said the RMT’s general secretary, Mick Cash.
“Clearly, anyone working in the rail sector is providing a service to the public and we are calling on the Government to confirm this morning that there will be no dispute over this point and that our members will continue to be paid with their functions taken directly in house.”
Small business response
While the Federation of Small Businesses has called for all the firms in Carillion’s extensive supply chain to be paid what they are owed.
“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,” said FSB national chairman, Mike Cherry.
“Public procurement must be much more small-business friendly, in which it is easier for small firms to navigate the system and the Government should prioritise meeting its target of at least one third of taxpayer-funded contracts going to smaller firms.”
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