Offer to help Carillion’s creditors is ‘not enough’

HELP offered by the banks to businesses owed money by the failed outsourcing giant Carillion will be no more than a “sticking plaster” solution, industry representatives have warned.

Business Secretary Greg Clark said ministers are working with the banks, trade unions and industry organisations to ensure that everything possible is done to provide “continuity” to thousands of small businesses which have been delivering services as subcontractors to Carillion.

Banks had agreed to provide “tailored support” worth almost £250m to those facing a hit from the failure of the company, which owed huge sums when it went into liquidation on Monday, he said.

But Mike Cherry, policy chairman of the Federation of Small Businesses (FSB), said that support offered by the banks would “probably” not be enough for many businesses and selfemployed contractors.

“It is only going to be a sticking plaster to help those who are viable to continue in business and recover in time,” Mr Cherry told BBC Radio 4’s Today programme.

“We all need to understand that it is very unlikely – as in any administration or liquidation – that those who have already invoiced Carillion up to the announcement on Monday are going to get anything out of this at all.”

Mr Clark said that it was “an issue for the Official Receiver” to establish what proportion of Carillion’s debts will be paid out to creditors once its assets have been realised.

But he made it clear that the payment of executives’ salaries would not be treated as a priority, telling Today: “They are creditors along with everyone else.”