Carillion collapse puts thousands of jobs at risk

The contractor employs almost 20,000 people in the UK

The firm recently went into talks with the government to reach a deal but this is said to have fallen through and banks are refusing to lend more money.

It was among companies awarded £6.6bn in contracts by the government to build the new high-speed HS2 railway between London and Birmingham in July. The government is expected to inject an emergency funding package worth £300m so the company can continue to operate on its public service contracts.

The company has 43,000 staff worldwide - 20,000 in the UK.

Sir Vince Cable, the leader of the Liberal Democrats has called on the government to accept responsibility for the big contracts of Carillion or have them re-tendered, to keep continuity in the supply chain.

However, the government has confirmed it shall be providing funding to maintain public services carried out by Carillion staff, subcontractors and suppliers.

"An application was made to the High Court for a compulsory liquidation of Carillion before opening of business today and an order has been granted to appoint the Official Receiver as the liquidator of Carillion", the company said in a statement.

However, when it comes to contracts in which Carillion was involved in a larger consortium with more companies, its role could be possibly taken over by the other companies.

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In a statement to the Stock Exchange, Carillion chairman Philip Green said it was a "very sad day". It is not clear yet how those staff will be affected.

The collapse puts the future of Carillion's 19,500 employees at risk and also heaps pressure on the government.

The construction giant provides facilities management to the hospitals in question, and the Department of Health and Social Care said NHS Improvement is working "intensively" with the trusts to "minimise disruption" resulting from Carillion's bankruptcy. The pension fund for employees has a deficit of nearly £600m and will now be managed by the Pension Protection Fund or PFF.

"RMT will be demanding urgent meetings with Network Rail and the train companies today with the objective of protecting our members jobs and pensions".

A spokesman for Prime Minister Theresa May said the government had been told by Carillion's joint venture partners, Kier Group and Eiffage, that both firms remained committed to the project.

"The administrator must provide reassurances on these to the workforce as a matter of urgency, and also that vital public services on which many depend will continue to be provided".

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