Updated: 15th January 2020
Published: 15th January 2018
Carillion, a heavyweight in the construction industry is facing compulsory liquidation as its debts reached £1.5bn. A major supplier to the government including key public infrastructure projects, including HS2, Carillion held crisis talks with its creditor banks this weekend; however, no agreement was able to be reached. With the government reluctant to subsidise a private company with public money, liquidation was the only option.
Behind the headlines, however, are thousands individuals worried about the future. With 20,000 people employed by Carillion in the UK alone, this news is set to have devastating impact on the thousands of suppliers and contractors who may find themselves as collateral damage following the crash of this company. With jobs, pensions, and key contracts at risk, this is set to have a huge impact on the wider supply chain over the coming weeks and months.
Carillion was handed 450 key public sector infrastructure projects, and while the reasoning behind awarding a company showing signs of financial difficulty these projects is being questioned in government, this could be the silver lining for the contractors and suppliers working on these projects. These contracts still need to be fulfilled, and the government will be looking to bring as many of these back in-house as a matter of priority.
Employees have been told to continue coming into work, with the government promising to pay wages. However, going forwards it is likely that future contracts will be handed to alternative service and construction operators, putting smaller companies who relied on Carillion under considerable pressure.
If it is likely that either yourself, or your business, is going to be negatively affected by the collapse of Carillion, you need to put plans in place now to prepare yourself for the future. Your next steps will depend mainly on your level of exposure to the construction giant. If the money you earned through supplying, contracting, or sub-contracting through Carillion represents a relatively small percentage of your overall income, then hopefully you will be able to weather this storm and come out the other side relatively unscathed.
However, if Carillion were your major customer, or you contracted exclusively for them, you should make it a priority to seek professional advice. The experts at Real Business Rescue can give you all the help and guidance you need to give your company the best possible chance of a bright future. We can help you understand the various company rescue, recovery and turnaround options and recommend the best course of action for you. The main thing to remember is that the sooner you seek professional help, the more options will be available to you.