Carillion plan dubbed 'sticking plaster'

From BBC - January 19, 2018

Help offered by the banks to firms left high and dry by Carillion's collapse is no more than a "sticking plaster" solution, industry representatives say.

Business Secretary Greg Clark has said support from a government-led task force and the banks will "maximise continuity" for small businesses.

But Mike Cherry from the Federation of Small Businesses said it was unlikely to be enough for most contractors.

Up to 30,000 smaller firms may be owed money by Carillion.

Carillion, which operated projects from cleaning prisons to building roads, went into liquidation on Monday with about 1.5bn of debt.

The construction giant directly employed 20,000 workers in the UK, and much of its work was contracted out to smaller operators, many of whom are waiting to see if they will paid for work completed in recent weeks and months.

Three banks have said they will provide 225m to provide "tailored support" for small business customers, including capital repayment holidays on loans, help with fees and increases in overdraft limits.

But Mr Cherry said the support did not go far enough.

"It is only going to be a sticking plaster to help those who are viable to continue in business and recover in time," he told the BBC.

"We all need to understand that it is very unlikely - as in any administration or liquidation - that those who have already invoiced Carillion up to the announcement on Monday are going to get anything out of this at all."

Business Secretary Greg Clark told the BBC that the question of whether firms would receive money owed for work they had completed on contract for Carillion "was a question for the Official Receiver".

'It just digs us deeper into a hole'


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