Carillion crisis deepens amid scramble to save jobs after firm collapses

Thousands of private sector workers at risk and 30,000 small firms owed money may lose out

Workers locked out of Carillion’s Midland Metropolitan hospital construction site.

Workers locked out of Carillion’s Midland Metropolitan hospital construction site.
Photograph: Darren Staples/Reuters

Thousands of staff who worked for the collapsed construction firm Carillion inside private sector companies will have their wages stopped on Wednesday unless their jobs are rescued by other firms, the government has said.

Experts also said up to 30,000 small firms were owed money by Carillion, which crashed into liquidation on Monday morning, with insolvency practitioners reporting an immediate rush of calls from worried business owners.


What government contracts does Carillion hold?

•Manages facilities including 200 operating theatres and 11,800 beds
•Makes more than 18,500 patient meals per day
•Helpdesks manage 1.5m calls per year
•Engineering teams carry out maintenance work

•Building ‘smart motorways’ – which ease congestion by monitoring traffic and adjusting lanes or speed limits – for the Highways Agency
•Major contractor on £56bn HS2 high-speed rail project
•Upgrades track and power lines for Network Rail
•Major contractor on London’s Crossrail project
•Roadbuilding and bridges

•Manages infrastructure and 50,000 homes for Ministry of Defence

•Designed and built 150 schools
•Services such as catering and cleaning at 875 schools

•Maintenance and repairs at about half of UK prisons

•Manages several public libraries in England

•Building substations, overhead cables and other works for National Grid

Thank you for your feedback.

Ministers gathered for an emergency meeting on Monday night in an effort to limit the damage caused by the collapse of the sprawling construction and support services business.

As the fallout spread, the Cabinet Office minister, David Lidington, faced mounting pressure over the government’s oversight of the firm’s increasingly precarious finances in the months leading up to its failure.

Lidington told parliament the government would continue to pay those among Carillion’s 19,500 UK staff who work in public sector jobs, such as NHS cleaners and school catering.

But he admitted thousands of Carillion’s private sector workers – who perform jobs ranging from cleaning to catering, security and postroom services for organisations such as the Nationwide building society and BT Openreach – would be cut loose after 48 hours.

“The position of private sector employees is that they will not be getting the same protection that we’re offering to public sector employees, beyond a 48-hour period of grace,” Lidington said.

He added that this would give time for Carillion’s private clients to decide if they wanted to terminate the contracts or step in to cover wages themselves. “I think that is a reasonable gesture towards private sector employees,” he said, adding that a Jobcentre Plus helpline had been set up.

The impact of the company’s implosion was immediately felt on Monday as workers at the Midland Metropolitan hospital – being built near Birmingham by Carillion – were locked out and sent home. The hospital, together with another in Liverpool, is at the centre of the problems that have beset the business. Both are substantially delayed and over budget.

In a video released on Monday night, the Labour leader, Jeremy Corbyn, called Carillion’s collapse a “watershed moment”, adding that it was “time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced the public of billions of pounds”.

Vince Cable, the Liberal Democrat leader and former business secretary, said: “The government has mismanaged contracts so that fat cat bosses are able to get away with millions, hedge funds are able to make millions, while their jobs are at risk.”

The shadow Cabinet Office minister, Jon Trickett, asked Lidington why Carillion was not overseen by a crown representative – a monitor usually appointed to observe government suppliers in financial difficulty – during the three months leading up to its liquidation.

He said that “the House will conclude [the Cabinet Office] was recklessly complacent”.

Earlier, the civil service chief executive, John Manzoni, told the public administration and constitutional affairs committee, which is now to launch an inquiry into outsourcing, that the crown representative was “rotated out” over the summer.

Manzoni said it was not until November that officials “really started to notice” the problems at Carillion, whose chairman, Philip Green, was an adviser to the prime minister on corporate responsibility until December 2016. Between July and November, Carillion issued three major profits warnings and its shares crashed by 91%.

However, Manzoni insisted that a team watching events at the company had “played a blinder”.

While Carillion’s private sector staff face uncertainty over their pay, the company’s former chief executive Richard Howson is still currently entitled to a £660,000 salary, even though he quit in July over the company’s dismal performance.

Lidington declined to say whether Howson, paid £1.5m last year, would still get the money but he said official receivers managing the remains of Carillion could impose “severe penalties” on former directors.

The Institute of Directors described a change to Carillion’s pay policy in 2016 which made it harder for the company to reclaim bonuses as “highly inappropriate”.

Amid concern about continuity of public services, the prime minister’s official spokesperson said the government had taken steps to make sure services were delivered “as normal”.

But within hours of the firm’s collapse, reverberations from its demise were being felt around the country. Firefighters in Oxfordshire were put on standby to serve school dinners, while the RMT rail workers’ union said disruption to train cleaning services was “almost inevitable” because mobile cleaning crews who travel by van found that fuel cards issued by Carillion to pay for petrol no longer worked.


How are you being affected by the Carillion liquidation crisis?

If your company or workplace has been affected you can tell us about it using our encrypted form.

Your stories will help our journalists have a more complete picture of these events and we will use some of them in our reporting.

Thank you for your feedback.

After workers building the £590m Midland Metropolitan hospital in Smethwick were told to go home, the West Midlands mayor and former John Lewis boss Andy Street said a new contractor would have to be found, adding that he had set up a regional taskforce to help staff and suppliers.

Liverpool mayor Joe Anderson said “solid contingency plans” were in place to make sure the £490m Royal Liverpool University hospital was not further delayed.

Small business experts warned Carillion’s suppliers could be driven under if they were not paid. Suzannah Nichol, chief executive of trade body Build UK, said she estimated Carillion owed money to between 25,000 and 30,000 businesses which could now struggle.

“Looking at previous cases where large contractors have collapsed, you typically see that around 17% or 18% of businesses who are creditors […] don’t make it through the next five years,” she warned.

Insolvency firm Mazars said it was already fielding calls from affected Carillion suppliers.

Conrad Pearson

We are already receiving calls of suppliers affected by the collapse of Carillion

January 15, 2018

Major partners on key Carillion projects admitted they were bound to take a financial hit from picking up its share of projects.

Construction firm Balfour Beatty, which is working on the £550m Aberdeen bypass, said it expected the collapse to cost it £45m, with partner Galliford Try sharing costs that could reach £80m.

But Serco, which provides some of the same services as Carillion, saw its shares rise more than 7% on the demise of a major rival. Carillion’s engineering partner on HS2 work, Kier Group, said it would take over Carillion’s share of the rail project.

The Financial Reporting Council, the accountancy watchdog, said it had been “actively monitoring” the situation and would make a statement shortly. Auditor KPMG, which signed off on Carillion’s 2016 accounts, said it had conducted its duties “appropriately and responsibly”.

Follow Guardian Business on Twitter at @BusinessDesk, or sign up to the daily Business Today email here.

Slave trader’s home, slum, des res: the stories of one house raise restless ghosts

All old houses are haunted. Not by ghosts but by the lives of others. Because to live in an old house is to share your most intimate space with the dead. Houses live longer than people and the harsh fact is that we are just passing through. Our homes, the most acutely personal places in our lives, come to us secondhand, and invisibly link us to people we have never met, people to whom we have no association other than a single shared connection to place.

I have been thinking about this recently because I spent last autumn engaged in a unique television experiment. We set out to discover if it was possible to take a single house and, through old newspapers, documents in the archives and whatever other clues or scraps of evidence we could find, tell the story of all the people who live there; from the day the first resident turned the key in the front door, all the way up to today.

The house selected is a Georgian-style terrace in what is now called the Georgian Quarter of Liverpool. I write “Georgian-style” because it was built in 1840, the third year of Victoria’s reign. Although large, elegant and, in the early 21st century, extremely desirable, it is not unique. There are hundreds like it in Liverpool and many thousands more across the country.

But, after months of investigations, what the researchers who began this project discovered was that it was possible, in the case of 62 Falkner Street, to form a chain of human stories stretching from then to now, from the first resident to the current owner. The lives of all of the people whose stories make up the links in that chain run through the house, because, for each of them, walking through that front door meant that they were home.

Across the four episodes of A House Through Time we uncover their stories, and that of the city in which they lived. More than any other British city, Liverpool’s ride on the rollercoaster of national fortune has been a bumpy one. No other city has been more buffeted by the cycles of boom and bust and, perhaps unsurprisingly, the place that once proudly saw itself as the “second city of empire” suffered more than any other when that empire suddenly evaporated.

The extremes of Liverpool’s story are reflected in the lives of the occupants of 62 Falkner Street. They span the social spectrum, from the well-to-do Victorian gentlemen to the families who huddled together in single rooms during the decades after the second world war when the house degenerated into a tenement slum.

Part of the aim of A House is to answer the question that everyone who has ever lived in an old house has – at some time or another – asked themselves. The thought usually comes late at night or early in the morning, when our eye is caught by what estate agents like to call an “original feature”, or a patch of peeling wallpaper or flaking paint reveals what lies beneath. Those triggers remind us that the buildings we confidently call ours once belonged to others; many and multiple others.

History is about people. Historians who don’t get that tend to be the ones who struggle to get anyone to care about their work. Ultimately you have to care about the people you encounter through your research, if you want anyone else to. But it is all too easy to start caring about figures from the past if you find yourself reading the documents that record their lives while sitting in what was once their kitchen. Or having just walked up a staircase, holding the wooden banister that their hands once gripped. To read their letters from within the house in which they were written, or to hold in your hands their death certificates, while standing on their front steps or in their bedroom, is a strangely intimate experience. A close encounter between historian and subject.

Reading the grim details of a Victorian domestic violence case, while walking through the rooms in which those beatings and beratings took place, felt almost voyeuristic. Too close and a little too real for comfort. To talk about the past residents of the house, to make judgments about them, to sum up their achievements or discuss their failings, from the upstairs sitting room in which they showed off their wealth and entertained their guests one and a half centuries earlier, felt a little presumptuous and almost transgressive. Historians love to talk about how we can get closer to the people of the past, but when it happens of its own volition the effects can be unnerving.

There is no official register of historians. No list from which practitioners of the art can be struck off for professional misconduct. I’ve recently found myself grateful for this omission because of all the historical projects I have worked on, none has made it so easy to cross lines, or so tempting to overstep marks. I have found myself marvelling at my capacity to feel genuine dislike for men who died over a century before my birth. To pass judgment on anyone – living or dead – on the basis of a handful of letters and ledger entries is palpably unfair and arguably ridiculous, and yet, in this case, almost impossible to resist.

Gaynor Evans lives at 62 Falkner Street with her two children. The house, built in 1840, has been home to a cross-section of British society, warts and all.

Gaynor Evans has lived at 62 Falkner Street with her two children for nearly eight years. The house, built in 1840, has been home to a cross-section of British society, warts and all. Photograph: Emerald Coulthard/BBC/Twenty Twenty productions Ltd/Emerald Coulthard

The enmity I feel towards the trader in slave-produced cotton who lived in the house, and whose personal life was lived with as much callous disregard for others as his professional life, is real and involuntary. This is a man I know only from a cache of damning official documents and – incredibly – a surviving portrait in oil paint. Only a kangaroo court in a one-party state would pass judgment on the basis of such flimsy evidence. Yet over the months my disdain for this ghost from the archives has grown, despite my attempts at professional detachment.

I have been equally surprised at my capacity to feel sympathy and empathy for the sufferings of people whom I only know from patchy documentary evidence. When I discovered that one late-Victorian resident of the house had died of heart failure, caused by years living under the shadow of a thyroid condition known as Graves’ disease, I was astonished by how emotional – rather than objective and professional – was my response to her story.

By way of an excuse, and by chance, I spent four years living with the same disease. A few days after reading the 1880s death certificate of Esther Lublin I found myself alone in my office, on the top floor of my house, reading old diaries, remembering how painful it had been. I had feared that Graves’ disease would waste years of my life, before modern treatments could bring it under control. For her there were few options. She must have known that, sooner or later, the condition would kill her. Two people with the same disease. I lived, she died – because we were born in different centuries.

Nothing about this can be said to be truly revelatory. We all know that until the 20th century billions died of diseases for which cures now exist. But knowing the historical facts and the bleak statistics is very different to reading of Esther Lublin’s tragic life, our shared diagnosis, her name and age – younger than I am now – scrawled on to her death certificate by a busy doctor.

History, to me, is all about those shiver-down-the-spine moments. When you hold in your hands an object created hundreds of years before your birth and feel the vague presence of the hands that held it in the past. Or when your boot turns over a piece of shrapnel on a first world war battlefield and you have to stop yourself speculating about what that muddy chunk of steel might have done to flesh and bone. Many historians I admire admit to such moments, although those admissions are to be made only in private and to other similarly afflicted historians or students. But they are what draws us to the archives and set us off on early morning trips across overgrown cemeteries. Historians have to be nosy, they have to want to know what others experienced. Part of that is achieved by being open to at least trying to feel something of what they felt.

If walls could talk it would be our homes – not our grand public buildings – that would have all the best stories. The real stuff of human life – love, childhood, vulnerability, intimacy, betrayal, acceptance and pain – is revealed behind closed doors and drawn curtains. It is at home, with our partners, parents and children, that we are genuinely ourselves. The version of history I was taught at school was largely one of great men and great deeds, a history that took place in palaces and battlefields. It was silent about our shared, inner and domestic histories, the stories of the rest of us, the ungreat, who live quietly and privately in anonymous terraced houses.

A House Through Time begins on BBC2 on 4 January

That Rhian Brewster issued a wake-up call is both worrying and inspiring | Daniel Taylor

It isn’t easy knowing whether the people occupying football’s ivory towers have actually noted what Rhian Brewster has had to say in the past few days. Unless I have missed it, the executives at Uefa and Fifa have not uttered a word in response and, frankly, that is no surprise whatsoever. Anyone calling Uefa since 22 December would get a cheery answerphone message saying its offices are closed and the lights are out until 4 January. Fifa, meanwhile, is on its own extended Christmas break. “Hope you are not in a hurry,” one of its press aides told me.

It can wait if the president of either organisation is willing to be interviewed about a system that feels so inadequate it has been left to a boy of 17 to try to jolt the relevant people into action. Even better, perhaps, if Aleksander Ceferin, Gianni Infantino or any of their colleagues want to contact Brewster the old-fashioned way and hear for themselves why someone of his age has felt compelled to speak out.

Somehow, though, I doubt it and it is difficult to have too much faith bearing in mind what we already know about these organisations and the impression sometimes that the only colour they really care about is that of a £50 banknote.

Brewster did not sound overly optimistic either when he chronicled, in uncensored form, the seven different incidents, including five in the past seven months and one in the Under-17 World Cup final, when he says he has been racially abused or heard a team‑mate suffering the same.

He would like to think the voice of a 17-year-old might be heard and, though he is absolutely not alone, with his club, family and Kick it Out all behind him, let’s hope the Football Association is not merely playing to the gallery and intends to stick by its promise to “push for appropriate responses from the relevant authorities”.

Brewster is still at an age when, for most of us, the biggest worry in life is mastering the three-point turn. It is not fair to expect him to take on the authorities single-handedly, nor was that ever his intention, and this is the ideal time, surely, for the FA to start making amends, if possible, for the pig’s ear it made of the Eni Aluko affair.

Anything else would be a missed opportunity because, as Jürgen Klopp points out, it should be a wake-up call for the entire sport if it has reached the point where one of Liverpool’s academy boys – a child of the 21st century, no less, born in the year that Steven Gerrard made his England debut – is willing to take the lead, before he has made his professional debut, and without any real experience of the industry’s politics.

It is not an exact science, admittedly, but certainly in the era of social media it is rare to see an interview with any footballer, even one of the category-A superstars, go viral so quickly.

Going forward, I get the impression Brewster wants to be thought of as a prolific scorer of goals rather than someone who decided that, no, he wasn’t going to stay quiet any longer. For the time being, however, it has clearly struck a nerve that someone his age has had the force of personality to take a stand and say enough’s enough – and, for that alone, he deserves all the praise that is coming his way.

Is it too much to hope that Uefa, in particular, might recognise there are some questions to answer here? Brewster has done his bit now and it is no good Uefa pointing out there are 10‑game bans in place for any player found guilty of racial abuse if it is also clear the same organisation has no apparent desire to gather in the necessary evidence.

Liverpool’s complaint against the Sevilla player who allegedly called Brewster a “nigger” in a Uefa Youth League tie in September is a case in point. Sevilla denied the allegation and that, for Uefa, was that – case closed.

There were no follow-up interviews with Brewster, his team-mates or anyone else from Liverpool and nobody, as far as the club understands, went back to the match officials to investigate further. The case has been quietly filed away and nobody should be too surprised, when that is the recurring theme of this story, that Brewster has concluded it was little more than a box-ticking exercise. Or that he feels so worn down by the system his initial reaction after the latest incident, involving a Spartak Moscow player and more alleged use of the N-word, was that there was no point even submitting a complaint. Liverpool did so anyway, and Uefa has not even given them a date for the hearing.

It certainly isn’t easy having a great deal of faith in Uefa when its punishments for racist chanting and banners are so notoriously frail and a club could be fined more for turning up a few seconds late for kick-off than, say, if there was a swastika in the crowd.

Equally, it is too simplistic sometimes to heap all the blame on Uefa when the culpability starts with the relevant clubs and national federations, many of whom frequently give the impression these are matters that rank somewhere near the bottom of their priorities.

When I sat opposite Brewster, encountering a polite, resilient boy who would much rather be making headlines in happier circumstances, he was accompanied by Alex Inglethorpe, Liverpool’s academy director, and the older man cut to the heart of the matter. “It doesn’t seem that when you play in France, Belgium, Switzerland and various other countries there’s a problem. It just seems that some countries are further behind in their thinking. There are certain countries where you always know ‘this could be a tricky one’.”

Russia, inevitably, is one and, though it would be wrong to grade the different incidents, it did feel particularly dismal to hear about the occasion, in 2012, when Brewster was part of Chelsea’s junior system and subjected to monkey chants in an under-13 tournament hosted by the country that will stage the World Cup next summer. He was 12 at the time and how does a boy of that age prepare for the excruciating moment when it suddenly becomes clear that loud, visceral ooh-oohing is intended for him?

Five years on, it might not come as a surprise that when Brewster heard the same again, directed at his team-mate Bobby Adekanye, he was back in Russia, playing for Liverpool against Spartak Moscow in the Uefa Youth League. There is a pattern here. Another incident, he says, involved a Ukraine player in the European Under‑17 Championship and another, aged 15, in a club tournament in the Czech Republic.

Yet it is incorrect to see this merely as a problem for eastern Europe. Two of the incidents Brewster cited involved Spanish players. There are plenty of other countries where it is still very much a recurring theme and it would be arrogant in the extreme to think English football is in any place to lecture when we have just had the Raheem Sterling case, with a Manchester United supporter starting a four-month prison sentence, and the FA executives who ended up in front of a parliamentary hearing because of the Aluko farce are all, ludicrously, still in their jobs.

Kick It Out received more reports of abuse in 2016-17 than any previous season in which data has been collected. The numbers are on the up and it is hardly surprising when, to quote Herman Ouseley, the organisation’s chairman, we live in a time when there are “wider elements of society driving hate”. It all feels, to put it bluntly, pretty bleak and no coincidence at all.

Yet, strangely, there was something rather uplifting about being in the presence of one of the rising young stars of English football, switching on a tape and hearing from a player who did not want to talk in evasive cliches and felt that, in his own small way, he might be able to make a difference.

In the past few days there have been all sorts of suggestions that Brewster should take a knee the next time he is required to stand behind one of Uefa’s banners or that, if an opponent racially abuses him again, he and his team‑mates would be entitled to walk off in protest. That is for them to decide whereas, for now, all that can be said for certain is that Brewster has shown what can be achieved with dignity, restraint and intelligence and I just hope, should he ever be targeted again, that all that pent-up anger and hurt is containable.

We had this conversation with Inglethorpe and, when Brewster talked about how close he came to seeking physical retribution after the latest occasion, involving the Spartak Moscow player, there was something very impressive about the way Liverpool’s academy director spoke to him from a position of having more life experience. “Two wrongs won’t make a right,” Inglethorpe told him. “It weakens your case. Emotions are high, testosterone is high, but keep calm.

“It’s really hard to trust in a process when you have no faith in it,” he added. “But you’ve got to keep your cool because your voice loses something otherwise and it diminishes your cause. I trust you.”

It was sound advice and it was clear Brewster has a strong network around him, going all the way to the top of the club bearing in mind the supportive calls he has received from Mike Gordon, the co-owner. Liverpool, very understandably, are proud of what their player has done. “It makes you search within yourself a bit,” Inglethorpe told me. “If I was 17 and faced with the same dilemma I would love to think I had the same kind of courage and fortitude. I’m not sure I would have done but I would love to think so because it’s incredibly brave and, more importantly, it’s the right thing. It seems to me like he’s trying to create some change. And to do that, at 17, it’s tough.”