Government warned of public services ‘crisis’ as Carillion meets with creditors

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The government is being urged to bring contracts from Carillion back into public control amid fears the struggling construction giant could “collapse”.

The company, which is a major supplier to the government, has been holding meetings with lenders.

But it appeared there was little relief for the company, with the Press Association reporting lenders had dismissed a rescue plan proposed earlier in the week as it failed to present a solid proposition for restructuring the business.

A spokeswoman for Carillion confirmed there had been a meeting with creditors, but would not comment on reports of further talks.

Carillion has watched its share price plummet since reporting half-year losses of £1.15 billion, while a meeting on Friday was held to address the company’s pensions deficit.

A collapse could be damaging as Carillion holds government contracts in the rail industry, education sector and NHS, and employs about 43,000 people across its international business.

Shadow business secretary Rebecca Long-Bailey said the large number of outsourced government contracts the company holds would mean a collapse “could provoke a serious crisis”.

“The government, who, despite warnings carried on with its programme of outsourcing public services to this company, must stand ready to bring these contracts back into public control, stabilise the situation and safeguard our public services,” she said.

Mick Cash, general secretary of the Rail, Maritime and Transport (RMT) union, called for protection for workers “caught in the middle of this financial meltdown at Carillion”.

Gail Cartmail, assistant general secretary of trade union Unite, which represents more than 1,000 workers at the company, said the government should consider bringing contracts back in-house.

“If taxpayers’ money is used to fund corporate mismanagement, then the government should be looking to ensure that public sector contracts are brought back in-house at the earliest possible opportunity,” he said.

A government spokeswoman said the company was keeping the government informed about its restructuring efforts.

“We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress,” she said.



Source

World News

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