Carillion collapse: Gov support for small business suppliers ends in two days

Companies working for construction firm Carillion on private sector deals will have just two days of support from the government.

Carillion, which went bust yesterday (January 15) with debts of around £1.5bn, operated with an extensive network of smaller businesses and many are yet to be paid.

But Cabinet Office Minister David Lidington has warned that government support for suppliers will end in 48 hours.

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), who called Carillion’s liquidation a “sorry saga”, said it is vital the construction giant’s small business suppliers are paid what they are owed.

He said: “Some of those firms could themselves be put in jeopardy, putting even more jobs at risk besides those of Carillion’s own employees.

“These unpaid bills may well go back several months. I wrote to Carillion back in July last year to express concern after hearing from FSB members that the company was making small suppliers wait 120 days to be paid.”

In 2016, Carillion spent £952m with local suppliers.

Mr Cherry continued: “Sadly these kind of poor payment practices are all too common among some big corporates. Perhaps if they weren’t it would be easier to spot the warning signs of a huge company in financial trouble.

“When the dust settles on this sorry saga, there is also a wider lesson to learn about the concentration of public contracts in the hands of a small number of very big businesses.”

Public procurement, he said, must be “much more small-business friendly”.

The Metro Mayor of the Liverpool City Region, Steve Rotheram, said there is “something fundamentally wrong” when a company of Carillion’s size goes under.

The firm employs around 20k people in the UK.

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