For Carillion’s 20,000 UK staff, the pain is only just beginning as they wait to learn if they will keep their jobs. Likewise its sprawling supply chain. The construction giant’s estimated 30,000 subcontractors and suppliers are set to take substantial hits on their unpaid invoices, as the company went bust with debts of £1.5billion and cash reserves of just £29million.
Meanwhile its construction clients face having to issue new tenders for halted projects, as it’s unlikely other construction firms will want the work under the current contract terms. The collapse comes as construction sector output slows sharply. Activity in the industry fell at the fastest rate in five years at the tail end of 2017, according to ONS data.
And yet Carillion’s demise is no Northern Rock moment. In the summer of 2007, queues formed outside Northern Rock branches in the first run on a British bank in 150 years. Northern Rock became the first casualty of a financial crisis that by the following year had morphed into a long and painful recession that none of us need to be reminded of.
2018 is not 2008…