Figures start to come out over the sorts of sums subcontractors are owed
Details of what specialist contractors are owed by Carillion are now emerging with some firms telling trade associations they are out of pocket by as much as £2.5m.
Rudi Klein, chief executive of the Specialist Engineering Contractors’ Group, said half a dozen firms had been in touch with the organisation already, spelling out the losses they are facing after Carillion went bust yesterday morning.
One cladding firm in the North-west has payments of £2.5m outstanding, a small engineering company in Northern Ireland is on the hook for £150,000 down while another engineering firm said its losses would be £800,000.
Klein told Building: “The feeling [among SEC Group members] is a massive amount of anxiety and alongside that is anger that [they have been] put into a position where [Carillion] could imperil its supply chain.”
The government made clear last night that it would not compensate Carillion’s suppliers, with Cabinet Office minister, David Lidington, telling parliament: “Companies in non-government contracts that are not involved in the provision of public services would become creditors of Carillion.”
Klein said he was advising his members that if payments are overdue they should suspend work with seven days’ notice. He said that if PWC on behalf of the Official Receiver wished for work to continue subcontractors should demand a written instruction for the work and a separate written confirmation that the work will be paid for.
Klein said: “I would imagine work is going to stop on a lot of sites. Companies should not increase their indebtedness or pile up the bills. Why should they increase their exposure?”
In a separate development, it is understood the business department held a meeting with construction associations last night to try to get a handle on the scale of the damage Carillion’s demise will inflict on its supply chain.
A source at the meeting said business secretary Greg Clark had told them to find out how much their members were owed and report back.
But the source said not much is expected to come out of it. “There was nothing from the government in terms of financial help, it was more tea and sympathy,” the source added. “This is too big for the government to deal with, it’s like a rabbit caught in headlights.”
At the same meeting, it emerged that some banks are reviewing lending facilities for companies in Carillion’s supply chain. The government is believed to be meeting banks later today to discuss the issue.