Carillion news: What you need to know about the construction firm's collapse

Liquidation: British construction company Carillion
AFP/Getty Images

What was Carillion?

Britain’s second largest construction and services company which was built out of the Tarmac business from which it was spun off in 1999. It grew rapidly, acquiring well-known companies including Mowlem in 2006 and Alfred McAlpine in 2008.

How many people does it employ?

About 43,000 globally including some 20,000 in Britain, with its base in Wolverhampton.

What did it do?

It is understood to have public sector or public/private partnership contracts worth £1.7 billion, including school dinners, cleaning and catering at NHS hospitals, construction work on rail projects including HS2 and Crossrail and maintaining 50,000 Army base homes for the Ministry of Defence.

Why did it go bust?

It ran up debts of £900 million after several projects ran into trouble and a £590 million pension deficit.

What has the Government done?

Ministers stepped in to ensure Carillion workers delivering public services continue to get paid, by the Government, and urged them to turn up to work.

Could Carillion’s collapse have a wider economic impact?

Yes. The fear is that many small firms in the supply chain who had contracts with Carillion will suffer from its demise.

Carillion: 'not a business that is going to collapse quietly'
EPA

Will there be a cost to the taxpayer?

Yes. Already, ministers have admitted that there will be a bill for the Government’s intervention through the Official Receiver to ensure Carillion public services carry on being delivered. Costs could rise because government contracts carry risk.

Why is Transport Secretary Chris Grayling facing questions over Carillion going bust?

He is one of the ministers whose departments continued to award Carillion contracts even after it was clear it was running into difficulties and had issued a profit warning.

Transport Secretary Chris Grayling arriving at Number 10 for a Cabinet meeting last month.
PA

What do ministers say in response?

They stress these contracts were awarded as part of consortiums, so if one company had to pull out, the other partners would carry the responsibility of delivering the service.

What happens to workers’ pensions?

The Carillion pension schemes are in talks with the Pension Protection Fund to deliver detailed information to members about how their benefits will be affected. Workers who have already retired at retirement age should continue getting full benefits but those still working might only get 90 per cent of benefits.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in

MORE ABOUT