Ministers ‘blew £360m Carillion plan’

MINISTERS knew about a plan that could have rescued £360million of funds from construction giant Carillion before its collapse but failed to intervene, it emerged last night.

Officials were accused of failing to put pressure on the company’s bosses even though the funds could have saved taxpayers money and poured desperately needed cash into its pension scheme. It would have involved breaking up Carillion, selling the profitable parts and putting the rest into liquidation – generating £218million for the pension scheme.

The proposal, by accounting firm EY, was rejected by Carillion’s management, who instead persisted with efforts to revive the company’s fortunes. The Cabi- net Office was also aware of the plan but chose not to push Carillion to adopt it, despite holding regular talks with executives, The Guardian reported.

A source present during discussions said: ‘I think they [the Government] thought that if they could get to the end of January, they could find new finance and the company would survive, maybe in a different structure. I don’t think they thought it would go bang.’

The Cabinet Office confirmed it had known of the proposals. But it is understood officials did not think it was appropriate to instruct Carillion on business matters.

Labour business spokesman Jon Trickett said they had been ‘asleep on the job’.

Carillion went bust in January with £3billion debts and a £1billion pensions black hole after a string of contracts went sour.