Hundreds of jobs saved after Carillion collapse

The collapse of Carillion has resulted in 377 staff being made redundant, but more than 900 jobs being saved so far.

The company went into liquidation in January after being brought to its knees by mounting debts and a hole in its pension fund.

One valuation, based on the cost of an insurance company covering the deficit, puts that hole in the pension fund at £2.6bn.

The official receiver confirmed the figures for redundancies today, and said: “I recognise this will be a worrying time for all those affected, their families and local communities. I would like to thank all the staff for their professionalism throughout the liquidation.

Frank Field

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“I am expecting many employees working on other Carillion contracts to transfer in the coming weeks and we are continuing to keep the workforce updated as these arrangements are finalised.”

The jobs that have been saved involve those people who were working on infrastructure projects and construction deals, or else on contracts that involved central or local government.

All of them have seen their jobs taken over by other companies, allowing them to continue working on the same projects.

Carillion’s fall was so spectacular that it ended up with about £29m in the bank, despite debts of more than £1bn.

The Insolvency Service said this week that the company’s record-keeping had been “a mess” and that it was not even immediately obvious who the directors were at the time the company went into liquidation.

Carillion’s collapse has also created an air of nervousness among other companies operating in outsourcing, both in construction and in providing management services.

This week Capita issued a profits warning that resulted in a dramatic slide in its share price. Another contractor, Interserve, has also seen its value fall sharply.

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Carillion Crane Construction London

Image: Carillion was a major player in the construction sector

And the sector suffered another setback on Monday, when figures suggested the amount of building work being carried out is stagnating.

According to the Purchasing Managers’ Index of activity, released by Markit/CIPS, the sector recorded a score of just 50.2 – a tiny fraction above the score of 50 that separates growth from decline.

It is the lowest score for a year and a half.

Figures suggest that house-building has actually gone into decline.

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Around 160,000 houses were built in 2017, a long way below the Government’s target of 300,000 houses per year.

They also back up recent reports from the Office of National Statistics, which found the construction sector reducing in size over the past three quarters, culminating in a 1% decline in the final quarter of 2017.