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Funding If Carillion fails, public services are at risk

Labour calls to bring the troubled firms contracts in house

PUBLIC contracts with troubled construction giant Carillion need to be brought back in house to protect services if the firm collapses, Labour warned today.

Shadow business secretary Rebecca Long-Bailey feared a “serious crisis” as the company met lenders to discuss options to reduce debts and restructure its balance sheets.

Carillion holds huge government contracts across the rail industry, education and NHS. It has posted half-year losses of £1.5 billion and was meeting today to discuss its pensions deficit.

Ms Long-Bailey and concerned unions said its collapse would have “major implications” for the contracts it holds and for thousands of workers, including in its supply chain.

“The government, which, despite warnings, carried on with its programme of outsourcing public services to this company, must stand ready to bring these contracts back into public control, stabilise the situation and safeguard our public services,” she said.

Rail union RMT general secretary Mick Cash urged the government to guarantee workers’ protection and give assurances that operations would be handed over to Network Rail with “all jobs, pensions and rights safeguarded” should Carillion go bust.

He warned: “This is the high-risk gamble you take with handing infrastructure over to speculative private companies. The workers caught in the crossfire must be protected and ministers must take immediate responsibility for giving those assurances without any prevarication.”

Unite assistant general secretary Gail Cartmail called for Carillion’s contracts with the public sector to be brought back in-house at the earliest possible opportunity and said any government rescue package must also include workers in the supply chain.

Many of these workers “lack even the protection of basic employment rights, as they are employed on a bogus self-employed basis through agencies and via umbrella companies,” she said.

Carillion is a “tragic example” of the failures of privatisation and outsourcing of public sector work when the government has to step in and intervene, according to general union GMB.

It is demanding that ministers work to protect jobs and pensions rather than focus on “bailing out a failing private company with a track record of treating workers badly” by handing bosses “a blank cheque.”

GMB national secretary Rehana Azam added: “We need an urgent task force, including employers and trade unions, to rescue this vital work from the inadequate grip of Carillion management.

“We seek transparency about the scale and nature of jobs and contracts which Carillion outsources to other subcontractors to evaluate how the collapse of the company could impact on infrastructure projects, the public sector and the wider economy.

“The government needs to urgently consider a public sector vehicle for taking on this vital work, just as it has when private rail companies have walked away and failed the taxpayer.”

A spokesman for the Pensions Regulator said: “We have been and remain closely involved in discussions with Carillion and the trustees of the pension schemes as this situation has unfolded.

“We will not comment further unless it becomes appropriate to do so.”

A company spokeswoman said Carillion had met creditors on Wednesday but would not comment on reports of further talks.

 

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