The collapse of Carillion: “a watershed moment”

By Julia Atherley

The contractor Carillion, responsible for many public and private sector contracts across the UK, has gone into liquidation. There is ongoing worry concerning job security and the directors of the firm face investigation as an estimated £1.3 billion is still owed to businesses, with a pension deficit of £600 million.

Carillion Energy Services Limited is currently listed as a partner of the Durham Energy Institute, a University-led research group aiming to draw expertise from across departments. They were also listed as a benefactor of the university in the academic year 2014/15.

Carillion was one of the partners in the Milburngate development in Durham City Centre but sold its £150 million stake in December. Carillion were also responsible for works carried out on Saddler Street in 2011, as well as the building of the passport office in Freeman’s Reach, completed in 2016.

The collapse prompted a video from Jeremy Corbyn in which he called the crisis a “watershed moment”. He argued that it is time for the government to stop using private contractors for public services. The failure of the company means that the government will have to step in to fund the public services currently outsourced to Carillion.

In PMQs, Corbyn reported that workers on private sector contracts were no longer going to be paid, whilst the chief executive would be paid a salary for the next 10 months. Theresa May insisted that the taxpayers would continue to be protected and that the Conservative Party was consistently the Party which supported businesses and investment.

Fresh concern arose when Interserve, another large UK contractor, was announced to be under government watch after a profit warning in September. The Cabinet Office has since released a statement reassuring the public that Interserve’s position is not comparable to that of Carillion. Interserve are currently the preferred bidder for the Mount Oswald contract for Durham University, having completed the Ogden Centre in 2017.

Editor’s Note: This article was amended at 16:39 on Monday, 29 January to make clear that Interserve were at the time of writing the preferred bidder for the Mount Oswald development, rather than in possession of it, as previously stated.

Photograph: ‘Elliot Brown’ via Flikr

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