The relationship between the Government and private sector companies which supply services needs to be urgently reviewed in the wake of Carillion’s collapse, some of the company’s rivals will tell MPs this week.

The bosses of Mitie and Serco will appear in front of Parliament’s Public Administration and Constitutional Affairs committee today as the Government gathers evidence in an attempt to avoid another high profile collapse of a business providing core services to ­institutions such as schools and hospitals.

Rupert Soames, the chief executive of Serco, said in his submission to the committee ahead of the session that there is “an urgent need to re-think the relationship between the UK Government... </s> Carillion faces a direct probe into whether fatcat bosses caused the firm's spectacular collapse.

The Tory government has asked independent authorities to "fast-track and expand" their investigation into the construction and public services giant.

The firm plunged into liquidation yesterday, threatening 20,000 jobs and leaving the taxpayer on the hook for a reputed hundreds of millions of pounds.

Carillion faces questions over why its chief executive Richard Howson was being paid £660,000 for a year after he quit - and why Tory ministers granted it more than £1billion in new contracts even after a profit warning last year.

The Institute of Directors has also accused Carillion of "highly inappropriate" behaviour in making it harder to claw back executive bonuses.

Today Business Secretary Greg Clark wrote to the Official Receiver requesting that its probe considers "any individuals who were previously directors".

He added it should consider "whether their actions may have caused detriment to its creditors - including detriment to any employees who may be owed money.

"He [the Receiver] should also consider whether any action by directors has caused detriment to the pension schemes.

"I also ask that the Official Receiver expedites his investigation which will also specifically consider the extent to which the conduct of the directors of Carillion PLC led to its insolvency."

Any alleged misconduct by an individual director would be reported to the Secretary of State.

Mr Clark said: "Any evidence of misconduct will be taken very seriously."

Carillion runs massive railway building projects as well as being responsible for services at schools, prisons and NHS hospitals. It provides school dinners for more than 200 schools.

The firm has 450 government contracts that represent more than a third of its reported revenue in 2016.

The government will continue to provide funding for public services provided by Carillion.

But Downing Street gave no guarantees over Carillion's private sector work, aside from plugging the gap for 48 hours, and could not guarantee no workers will lose their jobs.

Shadow Chancellor John McDonnell today accused the government “drip-feeding more contracts to Carillion to buoy up an obviously failing company”.

He demanded "a full public inquiry immediately to find out exactly what’s happened."

He added: "The Carillion collapse has raised real suspicions that the government was too close to this company and too wedded to its privatisation role."

But Treasury minister Liz Truss said it would have been “completely wrong” for the company to be bailed out by the state.

January 15, 2018: Carillion collapsed after banks refused to provide any further financial support following fruitless rescue talks over the weekend. January 12, 2018: Carillion said it remained in "constructive discussions" with its creditors and that suggestions they had rejected its business plan were incorrect. Sky News reported that Carillion has put administrators on standby in case rescue talks fail. January 9, 2018: Carillion said it was not aware of any development to support a recent share price rise, a day after reports of a government bailout. January 6, 2018: Carillion said it would meet creditors on January 10 as it seeks a financial rescue plan. January 3, 2018: Britain's Financial Conduct Authority said it was investigating statements made by Carillion over seven months up to and including a profit warning last July. December 22, 2017: Carillion said it had received all necessary consents from lenders to defer two financial covenants to April 30 from the end of the year. December 20, 2017: Carillion moved the start date for new chief executive Andrew Davies forward to January 22 from April 2. December 13, 2017: Carillion said it had reached a deal to sell a large part of its UK healthcare facilities management business to outsourcing group Serco, helping it cut debt by £41.4 million. December 11, 2017: Scottish investment firm Kiltearn Partners, the largest shareholder in Carillion, halved its stake, a regulatory filing showed. November 17, 2017: Carillion's shares tumbled 34 per cent after it issued its third profit warning in five months and said it was heading towards a breach of debt covenants and would need fresh capital. November 6, 2017: Carillion won two contracts with state-owned Network Rail, which should generate revenue of almost £200 million for the company over the next three years. October 27, 2017: Carillion named Davies as its chief executive, bringing in a former executive of defence company BAE Systems to help turn around its business. October 24, 2017: Carillion agreed to new credit facilities and deferrals on some debt repayments, sending its shares up as much as 25 per cent. October 12, 2017: Carillion confirmed that it had received proposals from more than one counterparty for the possible acquisition of its UK healthcare business. September 29, 2017: Carillion had its second profit warning in 2017 and said it may need to sell shares to shore up its balance sheet. September 11, 2017: Carillion announced the departure of its finance chief along with a series of changes to its management. August 24, 2017: Carillion said it had been named as the main contractor on a £300 million Manchester property development. July 18, 2017: A Carillion joint venture won contracts worth £158 million to supply catering and other services for British military sites. July 17, 2017: A consortium that includes Carillion won a £1.4bn pound contract to help build Britain's High Speed 2 railway. July 14, 2017: Carillion added HSBC to its team of financial advisers, fuelling speculation that it was preparing a rights issue. July 11, 2017: Carillion shares fell 30 per cent as analysts doubted whether a string of measures to conserve cash would be enough to stave off a rights issue. July 10, 2017: The chief executive of Carillion quit as the group warned on full-year profit and said it was pulling out of three construction markets in the Middle East. The company also said payment problems on four construction contracts nearing or reaching completion had forced it take a provision of £845 million. </s> The boss of outsourcing giant Serco has accused the Government of “behaving badly” by passing off unreasonable contracts to suppliers, ignoring its own guidelines and shrouding its decisions in secrecy.

In a Commons hearing on lessons learned from the collapse of Carillion, chief executive Rupert Soames told MPs that a raft of “well run and well respected” outsourcers have lost vast amounts of money in recent years working on government contracts with “unmanageable amounts of risks”.

Mr Soames – a grandson of Sir Winston Churchill – claimed the Government has previously tried to pass off controversial and “unreasonable” contracts to outsourcing firms, while also routinely expecting suppliers to shoulder the risk of major law and policy changes.

He said: “It’s not unknown for Government to behave quite badly.

“It’s a monopoly buyer, it’s also the regulator, the referee and the giver out of business.”

He said the recent woes in the outsourcing sector, which led to the collapse of Carillion and forced a number of its rivals to raise emergency capital to bolster their finances, was “astonishing”.

“It’s been a massive, massive disruption in the supplier sector, the likes of which I’ve never seen – £8 billion written off of the supplier sector and billions of pounds being raised to recapitalise.”

He added: “A lot of this is management’s fault, but … the Government as a monopoly buyer cannot stand idly by and say ‘nothing to do with me, Gov’.”

“There’s a very good PIN (prior information notice) saying how departments should behave and what’s reasonable to ask firms to do and it is widely ignored among departments,” he said.

The Government process for deciding when to outsource and its decisions on contract bids are also “shrouded in opaqueness”, but should be transparent and audited by the National Audit Office, he added.

Mitie chief executive Phil Bentley, who was also giving evidence in the hearing, told MPs on the Public Administration and Constitutional Affairs Committee that he believed inaccurate data was also to blame for some failed outsourced contracts and called for greater data sharing and transparency.

He gave the example of the asylum seeker contract handled by Serco, which he said saw the numbers of asylum seekers “massively underestimated” and led to hefty losses on the work.

Both bosses also said the bidding process was also flawed, with the Government under pressure to choose the cheapest supplier, rather than focusing on quality and expertise.

Mr Soames added there are “no benefits for good behaviour, and no penalties for bad behaviour” in the process.

“In the commercial sector, you get a feeling people like their suppliers to behave well,” he said.

The company chiefs said the Government had tried to pass on the extra cost of the national living wage on some contracts, while also expecting suppliers to take the hit from any future policy changes from Brexit law changes.

Mr Soames has already publicly called for “living wills” and a new code of conduct as part of an overhaul of the public sector contracting market following Carillion’s collapse.

He has drawn-up a four-point plan where outsourcers handling sensitive government contracts should sign “living wills” setting out what will happen with projects in the event of the firm going bust, as well as suggesting greater transparency on project progress, with updates every six months to ensure they are held accountable.

He also believes contracts should have pre-agreed “break fees” for both suppliers and the Government to allow either to pull out if a project is not working. </s> The Government has been accused of 'bad behaviour' by the boss of outsourcing giant Serco for passing 'unreasonable' contracts to suppliers and expecting them to shoulder the risk of law and policy changes.

Rupert Soames also said the Government was ignoring its own guidelines about 'what’s reasonable to expect firms to do', and that its decision process for awarding companies was 'shrouded in opaqueness'.

Soames' accusations come amid growing concerns about the financial stability of outsourcing companies following the fiasco of Carillion's collapse, and the struggles of Interserve and Capita since.

While he conceded that 'a lot of this' was down to bad management, he said the Government was also responsible.

In a Commons hearing on lessons learned from the collapse of Carillion, he told MPs: 'It’s not unknown for Government to behave quite badly.

'It’s a monopoly buyer, it’s also the regulator, the referee and the giver out of business.'

Serco's boss said the recent woes in the sector was 'astonishing' and added: 'It’s been a massive, massive disruption in the supplier sector, the likes of which I’ve never seen – £8billion written off of the supplier sector and billions of pounds being raised to recapitalise.'

The sector is plagued by long-term problems that hit some companies far worse than others, including historic underpricing in order to secure new contracts.

Soames said the bidding process was flawed, with the Government under pressure to choose the cheapest supplier, rather than focusing on quality and expertise.

He also said that the Government's process for deciding when to outsource and its decisions on contract bids were 'shrouded in opaqueness', but should be transparent and audited by the National Audit Office.

Mitie chief executive Phil Bentley, who was also giving evidence in the hearing, told MPs on the Public Administration and Constitutional Affairs Committee that he believed inaccurate data was also to blame for some failed outsourced contracts and called for greater data sharing and transparency.

He gave the example of the asylum seeker contract handled by Serco, which he said saw the numbers of asylum seekers 'massively underestimated' and led to hefty losses on the work.

Both company chiefs said the Government had tried to pass on the extra cost of the national living wage on some contracts, while also expecting suppliers to take the hit from any future policy changes from Brexit law changes.

He has already publicly called for 'living wills' and a new code of conduct as part of an overhaul of the public sector contracting market following Carillion’s collapse. </s> The Government is coming under pressure not to “duck and dive” over the pay and jobs of workers caught up in the collapse of construction giant Carillion amid mounting fears of redundancies.

Theresa May’s Cabinet was meeting on Tuesday as the fallout from the crisis continued to reverberate through the Government.

Top executives face investigation after the firm’s demise put thousands of jobs at risk and saw the Government heavily criticised for its role in the debacle.

Labour leader Jeremy Corbyn said Carillion’s collapse was a “watershed moment” that should bring an end to “rip-off privatisation” of public services.

The leader of the Rail, Maritime and Transport union is pressing Transport Secretary Chris Grayling and other ministers to clarify who qualifies as a public sector worker after an announcement that firms working for Carillion on purely private sector deals will only have two days of Government support.

RMT general secretary Mick Cash said: “We have been told this morning that only Carillion workers on what the Government defines as ‘public sector’ contracts will be guaranteed their wages.

“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.

“There should be no equivocation from the Government and no attempt to duck and dive around this issue. The Government have known for months that Carillion was in trouble and they should have had plans well in hand for just this situation.

“All of the Carillion rail works on the various contracts can be brought ‎in house easily and that is what we expect to happen with jobs and services protected. If there’s limitless amounts of cash to bail out rail franchises like Southern and East Coast there should be no penny pinching when it comes to workers caught in the crossfire of the Carillion collapse.”

Engineering services bodies ECA and the BESA told Business Secretary Greg Clark in a meeting on Monday evening that the loss of hundreds of millions of pounds owed by Carillion is likely to damage many specialist suppliers, and put others out of business.

The BESA and ECA urged the Government to ensure that firms affected by the collapse of Carillion receive maximum Government and banking support.

Business Secretary Greg Clark has written to the Insolvency Service and the Official Receiver asking that the statutory investigation into the conduct of Carillion’s directors is fast-tracked and extended in scope.

This means the Official Receiver’s investigation will consider whether those who are, or were previously directors of the company may have caused detriment to those owed money, including workers and businesses affected.

The Business Secretary has also written to the chairman of the Financial Reporting Council Sir Win Bischoff and asked it to conduct an investigation into the preparation of Carillion’s accounts past and present, as well as the company’s auditors.

Mr Clark said: “It is important we quickly get the full picture of the events which caused Carillion to enter liquidation, which is why I have asked the Insolvency Service to fast-track and broaden the scope of the Official Receiver’s investigation.

“In particular, I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors. Any evidence of misconduct will be taken very seriously.”

TUC general secretary Frances O’Grady called for a national task force involving unions to safeguard jobs, services, and pensions.

“Workers can’t be left at the back of the queue. Each and every worker at Carillion needs to know where they stand. They have bills and mortgages to pay, and deserve certainty on their future.

“We have to ensure that there aren’t more Carillions on the horizon. That means an immediate risk assessment of all large outsourcing firms with government contracts. Public services are already under pressure, and can’t take another hit like this.”

The Government has been heavily criticised for its role in the collapse of Carillion.

But after attending a meeting of the Government’s emergency planning committee Cobra on Monday night, Cabinet Office minister David Lidington said efforts to deal with the crisis had “gone pretty well”.

He said: “The message today was that day one had gone pretty well, people were turning up to work, we had not had reports of any serious disruption to service delivery.

“But we also had a report from PwC, who are working as the special managers for the Official Receiver, that took us through the advice they are providing to concerned employees and contractors on their website and through their helpline.

“And it was an opportunity for ministers just to test what is going on, what sort of concerns are being expressed and to decide how we should best address those and provide the reassurance people want.”

A last-ditch plea from Carillion to the Government to provide it with a £20 million lifeline fell on deaf ears over the weekend, triggering a compulsory liquidation to be overseen by PwC.

Carillion has public sector or public/private partnership contracts worth £1.7 billion, including providing school dinners, cleaning and catering at NHS hospitals, construction work on rail projects such as HS2 and maintaining 50,000 army base homes for the Ministry of Defence.

But it has seen its shares price plunge more than 70% in the past six months after issuing a string of profit warnings and breaching its financial rules.

The group, which employs around 20,000 British workers, has been struggling under £900 million of debt and a £587 million pension deficit.

Mr Lidington told Parliament on Monday afternoon that the Official Receiver would investigate the role of the company’s former and current directors, warning they could face “severe penalties”.

He spoke amid growing anger at bumper payouts received by former chief executive Richard Howson.

He pocketed £1.5 million in salary, bonuses and pension payments during 2016 and, as part of his departure deal, Carillion agreed to keep paying him a £660,000 salary and £28,000 in benefits until October.

Liberal Democrat leader Sir Vince Cable said this was a “reward for failure that has to be looked into”.

Theresa May’s official spokesman said that, initially, the Government will be paying staff through the Official Receiver to ensure that public services continue to run as normal.

He added that there would be some additional burden on the taxpayer from the cost of the receiver.

But Mr Lidington insisted that Carillion’s failure will see “shareholders and lenders bear the brunt” of the pain, rather than taxpayers.

Shareholders will be wiped out and lenders including HSBC, Barclays, Santander and Royal Bank of Scotland are reportedly set to lose an estimated £2 billion as a result of the collapse.

The group’s demise has posed questions as to why Carillion continued to receive Government contracts despite issuing a number of profit warnings.

Asked whether it had been a mistake to continue awarding contracts to Carillion, the PM’s spokesman said: “Since July, we have kept a very close eye on this, but of course if there are lessons which can be learned, they will be.”

Steve Webb, the former pensions minister, also questioned why the company had increased its dividend payments when it was grappling with a hefty pension deficit.

In a tweet, he wrote: “2016 Carillion annual report says dividend ‘has increased in each of 16 years since formation of company’; Is this really acceptable alongside a pension fund deficit over half a billion pounds?”

Carillion retirees already receiving their pensions will continue to receive payments, the Government has said.

However, there are around 27,000 staff involved in its defined benefit schemes which are likely to be transferred to the Pension Protection Fund (PPF). </s> British accountancy firms are to get a new regulator with more power over collapsing companies after a wave of scandals prompted calls for action to fix the sector.

The leadership of the audit watchdog, the Financial Reporting Council, will resign and the body will be rebranded as the Audit, Reporting and Governance Authority (Arga).

The business secretary Greg Clark, pledged that the overhauled regulator would for the first time be a statutory body with powers to make direct changes to accounts rather than apply to court to do so.

Other potential new powers include requiring rapid explanations of irregularities and publish reports about companies’ conduct and management.

Win Bischoff, the chair of the FRC for the last five years, will resign as soon as a replacement is found, and the deputy chair, Gay Huey Evans, will retire at the end of April. The former FRC chief executive Stephen Haddrill resigned last November.

The move came after the government accepted some of the conclusions of a review of the auditing sector led by John Kingman, the chairman of Legal & General. Kingman was highly critical of the FRC for the perceived weakness of its response to accounting scandals such as KPMG’s failure to spot the impending collapse of the support services and construction firm Carillion in 2018, and PwC’s work on BHS, the department store chain.

However, many of Kingman’s recommendations – including giving the new regulator the ability to call for new auditors or to replace a chief executive – have not yet been accepted in full, meaning the plans could still change significantly. A consultation on the changes will end on 11 June.

Kingman’s review was one of a number of reports on the sector.. One commissioned by the Labour party called for the “big four” auditors – KPMG, PwC, Deloitte and EY – to be banned from carrying out non-audit work. That followed a barrage of criticism of auditors’ role in waving through company accounts.

A report from parliament’s business select committee on Carillion’s collapse described the FRC as “chronically passive” and “too timid to make effective use of the powers they have”.

The ARGA will have a duty “to protect the interests of customers and the public” rather than the accounting firms, after accusations that the FRC was too cosy with the companies it supervised. As part of those changes, the regulator will be funded through a statutory levy on auditors, rather than voluntary fees.

Clark, who will face questions on the audit sector from the business select committee on Wednesday, said: “This new body will build on our status as a great place to do business and will form an important part of strengthened public trust in businesses and the regulations that govern them.” </s> British construction and services company Carillion collapsed on Monday when its lenders refused to provide any further financial support.

The company, which employs 43,000 people to provide services in defence, education, health and transport, said the government would provide the necessary funding to maintain the public services carried out by its staff.

Carillion is understood to be taking steps to enter into compulsory liquidation with immediate effect. An application was made to the High Court for compulsory liquidation before opening of business on Monday.

The debt-laden company employs 43,000, and works on a variety of projects from hospitals to the HS2 high-speed rail project.

Company executives held talks with the government and other stakeholders on the weekend in a bid to raise new funds.

Carillion’s struggles pose a conundrum for Prime Minister Theresa May over whether to use public money to assist a private company, or allow it to founder, putting public services and infrastructure projects nationwide in danger. </s> London, United Kingdom | AFP | The British government on Tuesday defended its decision not to bail out imploding construction-to-catering group Carillion, as criticism grew of its handling of the giant firm’s demise.

Carillion, which has a variety of private and public service contracts in Britain and employs 43,000 staff worldwide, announced its immediate liquidation Monday after the heavily-indebted company failed to secure a last-ditch financial rescue from the government and banks.

The government’s emergency response committee — known as COBRA — reportedly met for around an hour on Monday evening, with ministers from all affected departments attending, including finance minister Philip Hammond.

Treasury minister Lizz Truss on Tuesday told MPs that “it would be completely wrong for a public company that got itself in this state to be bailed out by the state.”

Thousands of British staff working for private-sector companies inside the stricken conglomerate will only have their wages paid until Wednesday under contingency arrangements.

Prime Minister Theresa May’s government has agreed taxpayers will foot a bill potentially running into hundreds of millions of pounds to continue paying the company’s 19,500 staff in public sector jobs.

“Our number one priority is making sure we supply those public services,” Truss said.

Carillion has public sector and private partnership contracts worth £1.7 billion (€1.9 billion, $2.35 billion), including providing school dinners, cleaning and catering at public hospitals, various construction works and maintaining 50,000 army base homes for the Ministry of Defence.

Hammond said Tuesday that the government had issued a line of credit to Carillion’s receivers “that enables (them) to operate the company’s public sector contracts.”

The company has been struggling for some time and in July last year issued the first of several profit warnings.

Despite the red flags, the government continued to award the company major public contracts, including on a flagship new high-speed rail project, leading to increasingly scathing criticism.

“The collapse of Carillion is a watershed moment,” Labour leader Jeremy Corbyn tweeted Monday evening, alongside a video in which he lambasted private finance initiatives like those the government awarded to the company.

“It is time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced taxpayers of billions of pounds,” he added.

Reports suggest up to 30,000 small firms are owed as much as £1 billion (€1.1 billion, $1.4 billion) by Carillion.

Meanwhile the company has been roundly criticised for its executives’ remunerations, with several former directors to be paid hefty salaries and benefits for months.

Britain’s main lobby group representing business bosses called the pay packets “highly inappropriate” and accused them and shareholders of failing to provide “appropriate oversight”.

Roger Barker, head of corporate governance at the Institute of Directors, said “effective governance was lacking at Carillion”.

“We must now consider if the board and shareholders have exercised appropriate oversight prior to the collapse,” he added.

Business Secretary Greg Clark confirmed Tuesday that an investigation had been launched into the conduct of Carillion’s directors to see if they “may have caused detriment to those owed money, including workers and businesses affected”.

Signs at a Carillion construction site in Liverpool, north west England, were defaced with messages including “pay the wages” and “bust”.

Carillion said Monday “it had no choice but to take steps to enter into compulsory liquidation with immediate effect”.

The company, with operations also in Canada and the Middle East, had revenues of £5.2 billion ($7.1 billion, 5.9 billion euros) last year. </s> LONDON/CAMBRIDGE, England (Reuters) - Britain ordered a fast-track inquiry into the role played by Carillion’s directors in the failure of the construction and services group, as some of its thousands of small suppliers started to lay off workers on Tuesday.

The 200-year-old company, swamped by debt and pension liabilities and burning through cash, went into liquidation on Monday, threatening suppliers, merchants and big banks.

The government, which relies on big outsourcing companies such as Carillion to provide services from school dinners to road building, stepped in to guarantee that key contracts would be unaffected.

But it said other work would only be paid for 48 hours after the collapse, and thousands of small suppliers face unpaid bills totaling millions of pounds.

Business Secretary Greg Clark said a full picture of the events which caused Carillion to enter liquidation needed to be established by the Insolvency Service.

“I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors,” he said.

“Any evidence of misconduct will be taken very seriously.”

Carillion’s auditors, KPMG, would also be examined, he added.

Carillion was responsible for providing millions of pounds of public services as well as major infrastructure projects in Britain, Canada and the Middle East. It was winning state contracts as recently as November.

Rudi Klein, head of Britain’s Specialist Engineering Contractors’ Group, estimated that Carillion had left a trail of 1.2 billion pounds in unpaid bills to thousands of small subcontractors.

Examples of private companies that could be hit included a small Northern Irish engineering contractor owed 150,000 pounds and a concrete frame manufacturer in northwest England owed 2 million pounds, Klein said.

Flora-tec, a corporate horticulture company based in Cambridgeshire, eastern England, said it is owed almost 1 million pounds for its work on Carillion contracts at local prisons, schools and hospitals, and had to lay off 10 of its 90 staff.

“People were in tears, colleagues we worked with for a long time. But as soon as we knew what happened we had to cut our cost base,” Managing Director Andy Bradley said.

He told Reuters he felt he had been misled.

“Government, even despite several profit warnings, continued to give Carillion large public sector contracts (...) and the message that sends to businesses like mine, the small guys in the supply chain, is that central government must have confidence in Carillion,” he said.

“I want the government to think long and hard about the SME sector, because we are the people that will bear the brunt of this, not the shareholders and not the big multinational conglomerates.”

Britain began outsourcing public services in the late 1980s under Margaret Thatcher and the model expanded under successive governments. It is now the world’s second-largest outsourcing market behind the United States.

Spun out of Tarmac nearly 20 years ago and incorporating construction names such as Wimpey and Alfred McAlpine, Carillion operated in Britain and Ireland, Canada, the Middle East and North Africa.

It was working on 450 British government projects, including the building and maintenance of hospitals, schools, defense sites and a high-speed rail line.

The government has faced questions as to why it continued to award Carillion contracts after it first signaled it was in financial difficulty in July last year.

Just a week after that first warning, Carillion was named as one of the contractors on Britain’s new High Speed 2 rail line, a flagship project that will better connect London with the north of England. In November, it won a further two contracts with state-owned Network Rail.

Mike Cherry, chairman of the Federation of Small Businesses, said it was vital that Carillion’s small business suppliers were paid, or some of those firms could themselves be put in jeopardy, putting even more jobs at risk.

“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,” he said.

Carillion former chief executive Richard Howson, who stepped down after the group warned on profit in July, was paid more than 1.51 million pounds ($2.08 million) in salary and bonuses in 2016, according to the company’s annual report.

He will continue to be paid a 660,000-pound salary until Oct. 2018 under the terms of his notice when he left the group in November, after handing over to interim CEO Keith Cochrane, according to a statement on the company’s website.
The heads of Serco and Mitie are expected to appear before the UK's Public Administration and Constitutional Affairs Select Committee to testify over the collapse of Carillion.