Reviewed: 16th January 2018
A major player in the construction and service industry, Carillion’s entry into liquidation earlier this week is making headline news. Not only does this news signal the loss of a major player in the industry, it also threatens to have a ripple-effect which is far-reaching and potentially disastrous to some businesses.
As one of the government’s most important contractors, much of Carillion’s work was outsourced to smaller companies. Being the UK’s second largest construction company, there is a wide network of subcontractors and suppliers who are set to be affected by this news.
Carillion held various key contracts with NHS hospitals, including high-profile building projects at the new Midland Metropolitan hospital in Smethwick, and the Royal Liverpool University hospital. Carillion was also responsible for providing vital services to NHS hospitals up and down the country, including cleaning, catering, laundry, and security among many others. Much of this work was subcontracted out to numerous smaller businesses, which are now facing the prospect of a future without this vital stream of work.
Its collapse has left thousands of subcontractors in limbo, and understandably worried for the future. It is estimated that up to 30,000 businesses are owed money by Carillion, with the chances of recouping this extremely slim. As Carillion operated on 120 day payment terms, many small businesses will be left out of pocket for work undertaken months ago. While some businesses will be able to trade out of these difficult times, for others, they will need to seriously consider their ongoing viability in the wake of Carillion’s collapse, and what losing these potentially lucrative contracts means to them.
As the wider impact that Carillion’s liquidation will undoubtedly have on small businesses up and down the country begins to be felt, now is the time to act. If you fear your business will be negatively affected as a result of the demise of Carillion, you must seek professional advice as a matter of urgency.
The experts at Real Business Rescue can help you understand the whole range of business rescue, recovery, and restructuring options and suggest the best one for you and your situation. Our help and guidance will give your company the best possible chance of a prosperous future. If you have concerns over the future of your business the best piece of advice is to seek help as soon as possible; the earlier you contact us, the more options will be open to you. We have an extensive network of 75 offices offering confidential director support across the UK.