Small firms count cost of Carillion collapse
Thousands of small firms working for Carillion are waiting to learn if they will be paid, amid growing fears some could close, after the construction giant went bust yesterday with debts of about £1.5bn. Carillion used an extensive network of sub-contractors and local suppliers, paying them almost £1bn a year, according to its latest annual report. Employers’ groups are trying to assess the exposure of small firms, but said many faced financial hardship.
Although Cabinet Office Minister David Lidington said there would be government support for public sector contracts, those firms working on purely private sector deals would get only two days’ support. Carillion spent £952m with local suppliers in 2016 and used an extensive network of small firms because, it said, “we remain wholly committed to generating regional economic growth and development”.
But the head of the FSB, Mike Cherry, said thousands of jobs and livelihoods were now at risk because those firms would be at the back of the queue for payment.
Source: The Daily Telegraph
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