Can the Carillion taskforce save firms from demise?

The Department for Business, Energy & Industrial Strategy (BEIS) has launched a taskforce to “monitor and advise” firms adversely affected by the Carillion collapse.

Recent figures suggest that as many as 30,000 firms will be affected by late payments and cancelled contracts, with “17 to 18 per cent” expected to not make it through the next five years, according to industry body Trade UK.

The Government taskforce includes representatives from leading business bodies, the construction trade sector, unions and banks.

It said the group will act “as a means to work together to ensure the impact of the Carillion insolvency on the firm’s employees in the private, as well as public, sector is minimised and to help them recover”.

Greg Clark, taskforce chairman, said: “Today’s meeting is the next step in a series I have held this week. It got key people round the table to drive forward steps that we believe can give confidence to workers and the supply chain; support from banks, the ability to link workers with employment and support for apprentices.

“I am determined that collectively we will take the steps necessary to give workers and businesses the information they need at this difficult time.”

HM Revenue & Customs (HMRC) also confirmed it will offer support to those affected by Carillion’s collapse ahead of the 31 January tax return deadline.

Businesses can use the tax office’s Business Payment Support Service to suspend debt collection proceedings, review penalties or defer payments, it said.

Meanwhile, Carillion’s pension scheme has been handed over to the Pension Protection Fund (PPF). Under PPF rules, anyone over the state pension age will receive their pension in full, while others will receive around 90 per cent of the promised pension, subject to a cap – currently set at £38,505 per year.

It was also revealed this week that senior executives of Carillion will not get bonuses or severance packages after payments were stopped by the Insolvency Service.

The construction giant was placed into liquidation earlier this month following a series of loss-making contracts.

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https://blog.mackrell.com/can-carillion-taskforce-save-firms-demise/
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Maung Aye
Maung is a partner in our Corporate and Commercial department. He joined Mackrell Turner Garrett following corporate law positions in London and in a leading regional firm in Essex. Maung read European Legal Studies at Lancaster University and the Università degli Studi di Trento and is a fluent Italian speaker.