Carillion Collapses Under Weight of Overwhelming Outsourcing Debt

BusinessCarillion Collapses Under Weight of Overwhelming Outsourcing Debt

Carillion Collapses Under Weight of Overwhelming Outsourcing Debt

The massive construction conglomerate failed to claw its way back and now faces bankruptcy.
Thirty thousand small firms and thousands of private sector workers owed money may be out of luck.

Rescue Talks Failed

Thousands of Carillion staff members will now have their wages stopped as the company failed to rescue itself in recent talks. Now, a massive scramble is underway to help them – as well as up to 30,000 small firms owed money by the company – to get what they can from what they are due.
The British government is hopeful that other firms will be able to rescue the jobs of at least some of the thousands of people who are now suddenly out of work.
Carillion crashed head-first into liquidation on Monday. Insolvency practitioners have reported that the calls from concerned business owners have been nonstop.

Government Contracts

Carillion was among the largest contractors hired by the British government. Ministers came together on Monday for an emergency meeting upon hearing the news of the company’s collapse. The primary goal is to reduce the damage caused to the many support services and construction projects contracted to the company.
As the impact of the collapse continued spreading, Cabinet Office minister David Lidington was under growing pressure regarding the firm’s oversight by the government, particularly throughout the months that led up to this week’s ultimate collapse.

Lidington addressed parliament, stating that the government would continue to pay the 19,500 U.K. staff members at Carillion working in public sector jobs, such as school catering and the NHS cleaners. However, at the same time he confessed that the company’s workers in the private sector had 48 hours left of employment. They include workers in jobs such as cleaners, security, catering, and postroom services for BT Openreach, the Nationwide building society and other organizations.
“The position of private sector employees is that they will not be getting the same protection that we’re offering to public sector employees, beyond a 48-hour period of grace,” said Lidington.

Corbyn Speaks Up

Labour leader Jeremy Corbyn took the opportunity to speak out in a video in which he called the Carillion collapse a “watershed moment” for the country’s public services. He attacked the Tories and “rip-off” privatization strategies, calling for government ministers to look to a new direction as they discuss the next step in this crisis.