Contracting group says over-stretched government departments will outsoure more work in effort to cut spending

Carillion has said it is well placed to weather the coalition government’s public sector cuts.

The contracting group said it expected to benefit from increased outsourcing by government departments as they come under increasing pressure to meet the 25% reduction in spending announced in the emergency budget.

It said the government decision to cancel hundreds of Building Schools for the Future projects would not affect orders.

Carillion said only 2.5% of its £19.7bn order book was reliant on public sector work.

In a trading statement the group said that first half revenue would be lower than in 2009 because of business disposals and a focus on margins rather than volume.

Carillion revealed a ‘robust’ balance sheet and said that 97% of its 2010 revenue was covered by its order book .