Bonuses for Carillion bosses are blocked

Carillion workersImage source, Reuters

Bosses and directors of Carillion will not get bonuses or severance payments, the government has said.

The Insolvency Service said no such payments had been made since the construction firm collapsed on Monday.

The announcement comes as work on Carillion's public sector construction sites is paused pending decisions about their future.

However, work on most of its private sector service contracts, such as catering and cleaning, will carry on.

Carillion's customers want existing services to continue until new suppliers can be found and will provide funding to retain staff for the moment.

Several former executives of the firm would have received pay and benefits this year.

  • Carillion had agreed to keep paying former chief executive Richard Howson a £660,000 salary and £28,000 in benefits until October as part of his departure deal.
  • Former finance chief Zafar Khan, who left Carillion in September, was due to receive £425,000 in base salary for 12 months
  • Interim chief executive Keith Cochrane was due to be paid his £750,000 salary until July, despite being due to leave next month.

On Wednesday, Business Secretary Greg Clark met representatives of some banks to seek assurances that they would support small businesses affected by the Carillion collapse.

Afterwards, he said UK lenders were ready to give "tailored support" and flexibility when it came to repayments.

About 30,000 smaller firms which have been working on Carillion projects in the private sector face an uncertain future and are waiting to learn whether they will be able to get hold of money owed to them.

HMRC said it will also help affected contractors, offering them more time to pay tax bills and providing workers with cash support through the tax credits system.

At Prime Minister's Questions on Wednesday, Labour leader Jeremy Corbyn hit out at the "wildly excessive" bonuses paid to Carillion directors.

He also accused the government of negligence, saying it awarded contracts to Carillion even when it became clear the company had problems.

Mr Corbyn also called on the government to end the "costly racket" of private sector firms running public services.

Mrs May said a third of government contracts with Carillion were agreed by the previous Labour administration, adding she wanted to provide "good quality public services, delivered at best value to the taxpayer".


Earlier GMB union boss Tim Roache had said the government's response to the Carillion crisis had been "inadequate and inept".

He said that his union had called on Mr Clark to set up a task force to help private sector companies and employees affected by Carillion's collapse.

He called on other private sector companies to take on affected workers without a change in their terms and conditions - a process that he admitted would not be a short one.

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'It's been an ongoing battle to get paid'

Media caption,
Business owner Shaun Weeks tells 5 live Breakfast he has pulled his staff from a Carillion job until he receives reassurances over pay

Shaun Weeks runs the cleaning firm Paragon Services. He told BBC 5 live Breakfast they had withdrawn the cleaner they had working full-time in a local prison.

"We'd been chasing them for money, we hadn't been paid since July and when we heard the rumours about a week-and-a-half ago that Carillion were in a lot of trouble, we really pressed.

"Fortunately for ourselves, we did actually get paid the money that was owed to us for the work that she'd done between August and November.

"We've pulled our cleaner out at the moment and we're just still waiting to hear from them what's happening next before we send her back in again.

"It looks like we are going to lose the December invoice money that we've sent them and obviously the first two weeks of January.

"It's been an ongoing battle since we've been in there to get paid and we're not prepared to take the risk while they're in liquidation.

"Until we see something in black and white saying that, 'Yes, you will get paid on these set terms,' then we will consider sending our cleaner back in again."

Carillion went into liquidation on Monday after rescue talks with its lenders and the government failed to reach a deal.

The UK's second-biggest construction company ran into trouble after losing money on big contracts and running up debt of about £1.5bn.

The company employed 43,000 people worldwide, including 20,000 in the UK, and the government has said staff and contractors working on public sector contracts will continue to be paid.

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