Carillion, one of the UK’s largest construction companies and provider of outsourced facilities management services to public sector organisations including many hospital Trusts, has gone into compulsory liquidation after emergency talks over the weekend failed to reach a deal to save the troubled business.
Carillion employs 20,000 people in the UK, (43,000 worldwide), has debts of £1.15 billion and a pension shortfall of over half a billion.
In a statement to the London Stock Exchange, Carillion said it had “no choice” but to take steps to enter into compulsory liquidation with immediate effect.
Carillion holds extensive NHS contracts for managing services such as cleaning, security and catering as well as the construction contract to build the new £335m Royal Liverpool Hospital, a project that is already running significantly over schedule.
Chief Executive of the Royal Liverpool and Broadgreen University Hospitals, Aidan Kehoe, has issued a statement to reassure people that the new Royal Hospital will be finished, saying: “we have a range of options and contingency plans should Carillion go into liquidation.” (http://www.rlbuht.nhs.uk/news/carillion-update/)
Carillion Chairman, Philip Green, says: “We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.”
Speaking on Friday, Rehana Azam, GMB National Secretary, said: “First and foremost, workers’ jobs must be protected. It’s not right that GMB members working for Carillion should face uncertainty and insecurity through no fault of their own. Handing Carillion bosses a blank cheque bail out is completely unacceptable – company bosses should not be rewarded for failure with public money.”
Adding to that in a statement today, Azam adds: "There is no place for private companies who answer to shareholders, not patients and service users in our public services. What's happening with Carillion yet again shows the perils of allowing privatisation to run rampant in our schools, our hospitals and our prisons."
Shadow Business Secretary, Rebecca Long-Bailey, has called for a full investigation into the Government’s dealings with Carillion, including why they ignored the three profit warnings issued in the last six months and continued awarding contracts to Carillion.
In December it was confirmed that Carillion had entered into a Business Purchase Agreement with Serco Group that would see Serco acquire a portfolio of 15 contracts providing services to five hospital Trusts and around 20 other public sector organisations. The transition of these operations was expected to take place during the course of 2018, subject to relevant consents and the approval of shareholders.
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