More than half of Carillion workers find new jobs after firm's collapse

More than half of Carillion workers find new jobs after firm's collapse

Carillion went into liquidation in January

More than half of Carillion's workforce, just under 10,000 people, have found secure ongoing employment, the Official Receiver has said.

The massive outsourcing firm went bust in January under a £1.3bn debt mountain, with a pension deficit estimated at up to £2.6bn.

At the time, Carillion employed 20,000 people in the UK and was engaged in a variety of public sector contracts.

Some 54% of those employees have found work, with some 873 jobs being saved by employees transferring to new suppliers who picked up contracts that Carillion had been delivering.

But a further 97 employees have been given redundancy notices because no work can be found for them, a spokesperson for the Official Receiver said.

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This makes a total of 1,802 jobs made redundant and 9,946 saved since January.

More than 5,400 employees are still working on delivering some of Carillion's remaining services for public and private sector customers.

The Official Receiver spokesperson said: "Discussions with potential purchasers continue.

"I am continuing to engage with staff, elected employee representatives and unions to keep them informed as these arrangements are confirmed." </s> More jobs have been lost following the collapse of engineering giant Carillion, taking the total to more than 1,800.

The Official Receiver announced that 97 Carillion employees have been given redundancy notices because no ongoing employment could be found.

A total of 1,802 jobs have been lost since Carillion went into liquidation in January.

Almost 10,000 jobs have been saved, and 5,400 employees have been retained to deliver Carillion’s services to public and private sector customers until decisions are taken to transfer or end these contracts. </s> An update from the Official Receiver reports that nearly 10,000 former Carillion employees have now gained secure jobs through the transfer of contracts but approximately 1,800 have been made redundant.

A spokesperson for the Official Receiver said: “More than half (54%) the pre-liquidation workforce – close to 10,000 employees – have now been found secure ongoing employment so far through the liquidation. A further 873 jobs have been saved with employees transferring to new suppliers who have picked up contracts that Carillion had been delivering.

“Regrettably we have been unable to find ongoing employment for a further 97 employees who have been given notice of redundancy. Jobcentre Plus’ RapidResponse Service will provide them with every support to find new work.

“Discussions with potential purchasers continue. I am continuing to engage with staff, elected employee representatives and unions to keep them informed as these arrangements are confirmed.”

To date 9,946 jobs have been saved in total and 1,802 jobs have been made redundant through the liquidation

These numbers do not include jobs attached to contracts where an intention to purchase has been entered into but has not yet formally occurred

More than 5,400 employees are still retained to enable Carillion to deliver the remaining services it is providing for public and private sector customers until decisions are taken to transfer or cease these contracts.
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• Buy & Sell Construction Plant Machinery online with TCiTrader.co.uk. Find new, used & reconditioned Construction Equipment. Click here to view Construction Equipment Classifieds. </s> A spokesperson for the Official Receiver said:

More than half (54%) the pre-liquidation workforce – close to 10,000 employees – have now been found secure ongoing employment so far through the liquidation. A further 873 jobs have been saved with employees transferring to new suppliers who have picked up contracts that Carillion had been delivering.

Regrettably we have been unable to find ongoing employment for a further 97 employees who have been given notice of redundancy. Jobcentre Plus’ RapidResponse Service will provide them with every support to find new work.

Discussions with potential purchasers continue. I am continuing to engage with staff, elected employee representatives and unions to keep them informed as these arrangements are confirmed.
• in total, to date 9,946 jobs have been saved and 1,802 jobs have been made redundant through the liquidation
• this information does not include jobs attached to contracts where an intention to purchase has been entered into but has not yet formally occurred
• more than 5,400 employees are currently retained to enable Carillion to deliver the remaining services it is providing for public and private sector customers until decisions are taken to transfer or cease these contracts
• further information about rights in redundancy is available on gov.uk </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. </s> The Official Receiver announced that 97 Carillion employees have been given redundancy notices because no ongoing employment could be found.

A total of 1,802 jobs have been lost since Carillion went into liquidation in January.

Almost 10,000 jobs have been saved, and 5,400 employees have been retained to deliver Carillion’s services to public and private sector customers until decisions are taken to transfer or end these contracts. </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> Construction giant Carillion has said it has “no choice but to take steps to enter into compulsory liquidation with immediate effect” after talks failed to find another way to deal with the company’s debts.

The stricken firm, which employs 20,000 workers across Britain, 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.

Carillion, which has been struggling under £900 million of debt and a £590 million pension deficit, has seen its shares price plunge more than 70% in the past six months after making a string of profit warnings and breaching its financial covenants.

Its collapse poses questions as to why the group continued to receive Government contracts despite issuing a number of profit warnings.

The Government has urged staff to keep going to work and said “those already receiving their pensions will continue to receive payment”.

Britain’s second biggest construction firm is understood to have 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.

Carillion chairman Philip Green 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 HM 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.”

Carillion had met lenders HSBC, Barclays, Santander and Royal Bank of Scotland on Wednesday to discuss options for reducing debts, recapitalise or restructure the group’s balance sheet.

Sources had told the Press Association that a business plan tabled by the group during the meeting was knocked back because it failed to present a solid proposition for restructuring the business.

However, the company denied the plan had been rejected, adding that any restructuring of the business could result in a debt-for-equity swap.

The Government, pension authorities and stakeholders also met on Friday in an attempt to thrash out a rescue package, with talks spilling over into the weekend.

The Official Receiver has now been appointed alongside partners at accountancy giant PwC to oversee the liquidation of the company

Cabinet Office Minister David Lidington 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.

“Since profit warnings were first issued in July, the Government has been closely monitoring the situation and has been in constructive discussion with Carillion while it sought to refinance its business.

“We remained hopeful that a solution could be found while putting robust contingency plans in place to prepare for every eventuality.

“It is of course disappointing that Carillion has become insolvent, but our primary responsibility has always been keep our essential public services running safely.

“We understand that some members of the public will be concerned by recent news reports. 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.”

Unions have called for urgent reassurances over the jobs, pay and pensions of thousands of workers following the “disastrous” news.

Officials from several unions representing workers on the railways, construction sites, prisons, hospitals and schools are seeking information from the company and ministers.

Rail, Maritime and Transport union general secretary Mick Cash 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 outsourcing key works to these high-risk private enterprises.”

Jim Kennedy, the Unite union’s national officer for local government, said a public inquiry was needed to answer questions about Carillion’s conduct and the Government’s decision to award it contracts.

Nicola Parish, executive director at The Pensions Regulator, said: “It is too early to comment on possible outcomes for the various pension schemes connected to Carillion.

“In the meantime, I would like to assure scheme members that the government set up the Pension Protection Fund (PPF) to support members of workplace pensions in precisely these circumstances.”

Shares in Carillion have been suspended on the London market following the liquidation announcement. </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.
Following the bankruptcy of UK engineering outsourcing firm Carillion, the Official Receiver reveals more than half of the roughly 20,000 employees have found new jobs.