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Impact of Carillion collapse on schools

According to the Cabinet Office, Carillion held approximately 450 contracts with government, representing 38% of Carillion’s 2016 reported revenue.

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Alasdair Reisner, chief executive of the Civil Engineering Contractors Association, said: “Today’s news is extremely worrying for Carillion’s staff and suppliers”. Carillion’s share prices have also dropped 70 per cent in the past six months.

Carillion has public sector or public/private partnership contracts worth £1.7 billion, including providing school dinners, cleaning and catering at NHS hospitals, construction work on rail projects such as HS2 and maintaining 50,000 army base homes for the Ministry of Defence.

Mr Lidington pointed out how around three-fifths of Carillion’s revenues came from contracts that had “nothing to do with” the UK Government.

“The very fact that Carillion have gone into liquidation rather than administration scream volumes over the state of the financials at the firm; there were no assets to sell so no administration”.

Despite these red flags throughout the summer, the government issued £2bn worth of contracts to Carillion shortly after its first profit warning in July.

Banks from the United Kingdom and overseas face a £2bn hit from the collapse of construction and outsourcing firm Carillion, according to reports.

The county council signed a 10-year contract with Carillion in 2012 to provide a range of services including key support services such as routine property management, facilities management, energy management and the design and build of capital work such as building new schools and new classrooms.

A spokesperson said that it will be working closely with administrators and Carillion’s management team to ensure the news “has as little impact as possible” on its projects.

However the Government has promised it will maintain all public sector services after Carillion’s collapse. “It is clear this matter now requires full and transparent scrutiny and it is essential that shareholders and creditors are not allowed to walk away with the most profitable contracts while the taxpayer bails out loss-making parts of the business”.

Britain’s opposition Labour and Liberal Democrat parties called for an investigation into the government’s dealings with Carillion before the company collapsed.

“PWC must put workers and suppliers at the head of the queue for payment, not the banks and certainly not the Carillion boardroom whose greed and recklessness has brought this giant company to its knees and imperiled so much of our public services”.

Crane echoed Cherry’s words, insisting that safeguarding Carillion’s suppliers was now a priority for the government.

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Scottish Building Federation president Stephen Kemp, managing director of Orkney Builders, said: “The news that Carillion has now gone into liquidation has major ramifications for the United Kingdom construction sector”.

Carillion holds £1.7 billion of annual government contracts