The Government has said that it will attempt to minimise disruption following the announcement that Carillion is to enter insolvency. The Cabinet Office has confirmed that all public sector services operated by the now insolvent company will continue and measures will be introduced to protect workers and their pensions.
David Lidington, the Minister for the Cabinet Office, said in a statement:
“It is regrettable that Carillion has not been able to find suitable financing options with its lenders but taxpayers cannot be expected to bail out a private sector company.
Since profit warnings were first issued in July, the government has been closely monitoring the situation and has been in constructive discussion with Carillion while it sought to refinance its business. We remained hopeful that a solution could be found while putting robust contingency plans in place to prepare for every eventuality. It is of course disappointing that Carillion has become insolvent, but our primary responsibility has always been keep our essential public services running safely.
We understand that some members of the public will be concerned by recent news reports. For clarity – All employees should keep coming to work, you will continue to get paid. Staff that are engaged on public sector contracts still have important work to do.
Since its inception in the 1990s private finance has helped to deliver around £60 billion of much-needed capital investment in infrastructure in the UK across a range of projects and we will continue to maintain partnerships with responsible firms in future”.
Jon Trickett, the Shadow Minister for the Cabinet Office, said that there should be an investigation into why Carillion were awarded more Government contracts. He said:
“Alarm bells have been ringing for over six months about the state of Carillion’s finances, so the government must come forward and answer questions on exactly what due diligence measures were undertaken before awarding contracts to Carillion worth billions of taxpayers’ money”.