Carillion collapse: 900 jobs saved but almost 400 lost, says official receiver

The collapse of Carillion has resulted in 377 staff being made redundant, but more than 900 jobs being saved so far.

The company went into liquidation in January after being brought to its knees by mounting debts and a hole in its pension fund.

One valuation, based on the cost of an insurance company covering the deficit, puts that hole in the pension fund at £2.6bn.

The official receiver confirmed the figures for redundancies today, and said: “I recognise this will be a worrying time for all those affected, their families and local communities. I would like to thank all the staff for their professionalism throughout the liquidation.

“I am expecting many employees working on other Carillion contracts to transfer in the coming weeks and we are continuing to keep the workforce updated as these arrangements are finalised.”

But the Unite union responded: “The latest redundancy announcement has increased the feeling of chaos and confusion which has stalked Carillion since its collapse last month.

“Workers don’t know if they will get paid from one day to the next and could be made redundant or transferred to a new contractor on lower wages at a moment’s notice.

“Thousands of workers remain in limbo and don’t know if they will be able to continue to feed their families.”

The jobs that have been saved involve those people who were working on infrastructure projects and construction deals, or else on contracts that involved central or local government.

All of them have seen their jobs taken over by other companies, allowing them to continue working on the same projects.

Carillion’s fall was so spectacular that it ended up with about £29m in the bank, despite debts of more than £1bn.

The Insolvency Service said this week that the company’s record-keeping had been “a mess” and that it was not even immediately obvious who the directors were at the time the company went into liquidation.

Carillion’s collapse has also created an air of nervousness among other companies operating in outsourcing, both in construction and in providing management services.

This week Capita issued a profits warning that resulted in a dramatic slide in its share price. Another contractor, Interserve, has also seen its value fall sharply.

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And the sector suffered another setback on Monday, when figures suggested the amount of building work being carried out is stagnating.

According to the Purchasing Managers’ Index of activity, released by Markit/CIPS, the sector recorded a score of just 50.2 – a tiny fraction above the score of 50 that separates growth from decline.

It is the lowest score for a year and a half.

Figures suggest that house-building has actually gone into decline.

Around 160,000 houses were built in 2017, a long way below the Government’s target of 300,000 houses per year.

They also back up recent reports from the Office of National Statistics, which found the construction sector reducing in size over the past three quarters, culminating in a 1% decline in the final quarter of 2017.

(c) Sky News 2018: Carillion collapse: 900 jobs saved but almost 400 lost, says official receiver