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SMEs in Carillion supply chain could be left unpaid

Thousands of small businesses supplying services to Carillion face financial hardship after the stricken construction conglomerate entered liquidation.

Carillion collapsed on 15 January 2018 under the weight of debts amounting to £1.5 billion after several banks refused to provide any further financial support.

As a result, trade body Build UK claims that between 25,000 and 30,000 small businesses in Carillion's supply chain could be left unpaid.

While the government vowed to support public sector contracts in parliament on 15 January 2018, private sector contractors have not received government protection beyond a 48-hour grace period.

Three banks have since agreed to provide £225 million worth of combined assistance to support small businesses hit by the collapse, while HMRC is on hand to provide advice and guidance.

According to an update from the Insolvency Service, continued support from Carillion's private sector customers means employees working on those contracts should still be paid.

However, the number of contractors that have come to an agreement remains unspecified.

Suzannah Nichol, chief executive at Build UK, said:

"The impact of Carillion's liquidation will be felt across the construction supply chain.

"To deliver much needed change to the industry's business model, it is critical that industry and government work together to support those companies which are most affected and the staff whose skills and talents are needed in the industry."

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