Carillion taskforce to discuss how to prevent domino effect on UK economy

A taskforce of banks, businesses and construction industry trade bodies will meet with the business secretary on Thursday to discuss ways to contain the impact of Carillion’s collapse on jobs and the wider economy.

Greg Clark convened the meeting amid pressure from trade unions to ensure that the business world helps limit job losses among former Carillion staff and employees in its supply chain.

In further developments, Lloyds Banking Group, which was bailed out with £20bn of taxpayers during the banking crisis, has set up a £50m emergency fund to help affected businesses. British Gas owner Centrica, and building society Nationwide also vowed to ensure former Carillion employees would continue to be paid or in some cases employed directly.

The taskforce meeting is expected to involve discussions about what more banks and businesses can do to support companies and stem job losses.

A spokesperson for the business department said: “We have created a taskforce to continue to support and monitor the impact on small businesses and employees who have been affected by Carillion’s insolvency.

“The taskforce will meet today and will comprise representatives from business, construction trade associations, the trade unions, lenders and government.”

The Trades Union Congress, which has pushed for a crisis coalition of businesses and trade unions to deal with the Carillion fallout, said its general secretary Frances O’Grady would present demands designed to protect workers.

These will include: measures to transfer Carillion staff to new employers and protect their pay; bringing public sector contracts back under government control; a risk assessment of other large outsourcing firms and a moratorium on awarding further public service contracts to rival companies.

O’Grady said: “We are pleased the government has agreed to union calls for a national taskforce to deal with the collapse of Carillion.

“Time is of the essence in dealing with this crisis. We need urgent action to protect jobs, pay and pensions. This cannot be a talking shop.”

As the government stepped up efforts to limit the impact of Carillion’s collapse, several of the firm’s former clients said they would ensure staff continue to be paid.

Nationwide said it would directly employ 250 people who had been working for the company on a contract held by Carillion. A further 1,500 staff who were working for third-party subcontractors will now be contracted to Nationwide.

“Our contractors perform a vital and valued role for the society. During an unsettling time for Carillion employees we felt it was important to provide them with some reassurances,” said a spokesperson.

“We are today announcing a proposal to bring all services provided directly by Carillion in house, with Carillion employees becoming Nationwide employees from 22 January. This will provide clarity for those affected and ensure that services are maintained.

“As part of the wider supply chain arrangements we will also now look to deal directly with third-party suppliers that currently support the Carillion contract.”

Centrica said it would make funds available to the government’s Insolvency Service to ensure that 480 staff who helped manage facilities at its buildings would continue to be paid.

National Grid, which used Carillion staff on its infrastructure programme, said work would continue on an overhead line between Richborough and Canterbury, which is designed to connect a Belgium-UK power cable to the grid, and a power cable at Wylfa in Wales for the planned new nuclear power station there.

A spokesperson said: “National Grid has contingency plans in place for all its projects with Carillion, using alternative suppliers if necessary. We believe that these plans mean we will be able to keep any disruption to a minimum.”

The company did not say whether it would take on any Carillion staff or whether it had provided funding to ensure they continue to be paid.

Lloyds Banking Group said it had set up a £50m fund to help affected small businesses (SMEs) with measures such as a waiver on overdraft fees and loan repayment holidays.

The fund, available to its existing small business customers, will be open from Thursday.

Gareth Oakley, Lloyds’ managing director of banking for small-to-medium sized businesses, said: “We know how critical it will be for businesses within Carillion’s supply chain to receive support with their cashflow, to help them through the temporary challenge to their business.

“The measures launched today will ensure these small businesses have the financial support they need to get themselves back on track.”