Job loss fears over Carillion

Company collapse: What next?

THE COLLAPSE of construction giant Carillion after it finally buckled under the crippling weight of £900m of debt has farreaching consequences.

There are serious questions that need to be answered, not least how the UK’s second-biggest construction firm, one that boasted sales in excess of £5bn as recently as 2016, has managed to fail so spectacularly and in such a short space of time.

Last year, the ailing company issued three profit warnings in the space of just five months yet Government and local authority contracts kept pouring in. The situation is an unmitigated mess. Those who believed that Carillion was “too big to fail” have had that assumption shattered, with Ministers saying taxpayers could not be expected to bail out a private-sector company.

Critics will say this is proof that there’s one rule for banks – RBS and Lloyds were among those bailed out during the financial crash – and one rule for everyone else. However, there are more pressing concerns. Carillion employs 20,000 staff in the UK alone, including in our schools, hospitals, prisons and on major rail projects such as HS2 and whose jobs are now at risk.

The company is involved in a whole host of high-profile projects in Yorkshire, including construction of the Great Yorkshire Way link road to Doncaster Sheffield Airport and a project to replace the existing dual carriageway with a new three-lane motorway on the A1 in North Yorkshire. Not only that but it has emerged that Leeds City Council was on course to sign a major contract with the stricken firm as recently as last month.

There are serious issues around transparency and how and why, given its calamitous financial situation, Carillion was awarded so many contracts. With so many livelihoods at stake, assurances from the Government are urgently needed.