With around 43,000 workers all over the world, last week’s announcement of the Carillion collapse was bound to send shockwaves through the entire construction industry.
Taking into account that the organisation not only employed a huge amount of people but also functioned as a middleman to businesses by providing the likes of technicians and engineers to offices and hospitals, there was a certain inevitability about the reaction we have seen since.
A dozen or so small listed groups, which included the Yorkshire-based Premier Technical Services, have outlined the high costs of the group’s insolvency. Trade bodies have additionally warned that many of their 30,000 subcontractors will go into liquidation, whilst on Thursday Greg Clarke, the organisation’s business secretary, organised a task force to monitor the impact of the demise on both small companies and their employees.
What happens now?
According to Carillion, the UK government will supply the necessary funding to maintain the current public services that are being carried out by their staff, suppliers and subcontractors. Workers have been urged by the Insolvency Service to carry on as usual and promised that they will be paid via the official receiver.
As for the private sector, businesses are said to have already drawn up contingency plans. Balfour Beatty, for instance, is expecting to take a massive £45-million loss as a result.
This recent Carillion news is yet another example of the problems caused by formal insolvency. Our business recovery teams, based in Leeds, Harrogate, Bradford and Darlington, believe that although there is sometimes no other option available, this should be the last choice.
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