Government ‘let slip’ chance to get £364m from debt-ridden Carillion

The UK government knew about a plan that could have reportedly retrieved more than £360 million from Carillion before the firm collapsed, but did not encourage the company’s directors to pursue the move.

It is understood the Cabinet Office did not consider it appropriate to advise the construction giant on business decisions despite the proposals put forward by accountants EY in mid-december.

EY believed breaking up the company, selling the profitable parts and placing the rest into liquidation would have generated £364m, of which £218m could have be put into the company’s pension schemes, which are hundreds of millions of pounds in deficit.

The government was aware of the plan, but did not pressure Carillion to put it into action.

At the time, the government was holding weekly meetings to monitor the firm’s health.

A Cabinet Office spokeswoman said: “Throughout this process, government has been clear that its priority is to ensure that public services continue to run properly and we regularly meet with our strategic suppliers and monitor their financial health. Since the collapse of Carillion, our plans have ensured that public services can continue to run as normal.”

A total of 1,371 Carillion workers have lost their jobs since the company went into liquidation in January.

Shadow Cabinet Office minister Jon Trickett said: “This is astonishing. The government were asleep on the job.”