The government is to take over all public sector services run by Carillion, after the firm entered liquidation.
David Lidington, minister for the Cabinet Office, said all necessary funding required to maintain public services would be provided by the government.
Carillion pension fund members will continue to receive payment, he added.
“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,” Lidington said.
“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 £60bn 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.”
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Presumably all the Carillion contracts that are a JV with the government provide that the members of the JV be jointly and severably liable, hence the other members would be contractually obliged to finish the contracts?
Once again the Goverment has misjudged its outsourcing, recent events such as Grenfill Tower and now Carillion highlight that private outsourcing is not working, either in VFM, sustainability or quality. Let’s get the public sector back in control.