Government in crisis talks over company that provides vital services to schools

12th January 2018 at 15:41
Carillion's financial troubles spark calls for its contracts to be brought back into public hands

Ministers have held crisis talks over a troubled company that hundreds of schools rely on for vital services, after questions were raised about its future.

Carillion, a facilities management and construction services company, has struggled since reporting half-year losses of £1.15 billion, and a meeting is being held to discuss its pensions deficit.

The company provides vital services to hundreds of schools. According to its website, these include delivering more than 32,000 school meals a day, as well as facilities management to 875 schools, cleaning for 245 schools and mechanical, electrical and fabric maintenance services at 683 schools.

It also supports schools with health and safety and grounds maintenance.

The company has met lenders to discuss options to reduce debts and recapitalise and/or restructure the group's balance sheet.

A government spokesperson said: "We can confirm that a ministerial meeting took place yesterday, 11 January.

“As Carillion is a major supplier to government, it should come as no surprise that we are carefully monitoring the situation while working to ensure our contingency plans are robust.

“We are committed to maintaining a healthy supplier market and work closely with our key suppliers. The company has kept us informed of the steps it is taking to restructure the business."

'Collapse could provoke a serious crisis'

The firm's troubles have prompted calls for the government to bring its contracts back into public control amid fears it could “collapse”.

Shadow business secretary Rebecca Long-Bailey said: "The collapse of Carillion could provoke a serious crisis.

"It would have major implications for the outsourced government contracts the company holds, as well as the firm's thousands of workers, those in the supply chain and those who rely on Carillion's pension fund.”

Her views were echoed by Unite union assistant general secretary Gail Cartmail, who said: "The government must consider all options while the future of Carillion hangs in the balance, including bringing contracts back in-house."

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

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