BWF has been working closely with members, politicians, CITB and Build UK to understand the impact and intricacies of the collapse of Carillion. We are aware that some BWF members are amongst the estimated 11,500 construction firms that have been affected and below we provide some advice and a bit of an update on some of the key developments.
Where we stand
The Government’s Insolvency Service has confirmed that work has paused on all Carillion construction sites, pending decisions as to how and if they will be restarted
Companies currently engaged in Carillion projects (contracting to Carillion) should have been contacted directly by PWC to advise of any new arrangements (from 15th January)
Those on JV sites should be transitioned across to the JV partner in the new project arrangent
If you are an unsecured creditor (i.e. you have a claim for arrears arising before 15 January 2018) in due course you will be asked to register your claim with PwC. You should check their website at regular intervals for information. If you are worried about Cashflow, various helplines have been set up by the banks and you can find details here - a £100m business loan facility has also been announced by Greg Clarke to support impacted businesses.
BuildUK, working with Wedlake Bell, have published an excellent factsheet covering the points above in more detail and answering FAQs from those companies affected
On Wednesday, Suzannah Nichol (CEO of BuildUK) attended a further meeting with Government and PwC where she highlighted the need for PwC to differentiate between Carillon’s construction projects and service contracts when communicating with creditors. PwC has since met with the banks who have committed to agreeing special arrangements for affected creditors – see statement from UK Finance (the trade body for lenders).
Carillion workforce and apprenticeships
CITB’s project team was set up on Monday 15th Jan, seeking to contact and place 1400 Carillion apprentices. Some members will currently be engaging apprentices employed through Carillion and in this instance CITB is keen for companies to make contact to help with any transitional arrangements. They are looking bring these and all affected apprentices into CITB Apprenticeships and where possible to find, or preserve, suitable employers for them. To encourage employers to take on these individuals, CITB plan to pay to in-scope employers an encouragement grant of £500 to take on a Carillion apprentice, with a further £500 retention grant after 3 months with them. This is in addition to any apprenticeship grants these employers are already entitled to. There is a dedicated web page offering support for Carillion apprentices or employers on our website at www.citb.co.uk/carillionapprentices.
To support the wider Carillon workforce CITB and the Department of Work and Pensions have agreed that they will set up a help line for any employers interested in taking on new staff, have vacancies or are interested in helping in any way with redundant ex-Carillion employees or employees affected in their supply chain. Employers wanting to participate should contact email@example.com.
A job board has been established to support anybody looking to recruit
You will have seen our initial statement. This has been carried in the Sun, Independent and Guardian with members fielded for comment on various radio and media interviews in the National and Trade Press. I would like to extend a personal thanks to those of you who have participated – we need to keep the pressure on Government, both directly and through the media to live up to their responsibilities here. I am also grateful to those members who have written to their MP asking them to lend their voice to supporting the SME subcontractors who have suffered due to the poor working practice, bad management and ill-advised procurement decisions of others.
We have drafted a template if you wish to do the same and if you are willing to talk to journalists there is still plenty of interest in garnering the views of the woodworking sector. All comments, requests and offers through to firstname.lastname@example.org.
We are encouraged that the Government has now issued more tangible support via Governmnent Backed Loans for impacted contractors through the Enterprise Finance Guarantee Fund. Companies interested in accessing this fund are encouraged to contact the BWF for support in navigating the system. BWF has long campaigned on reprehensible payment practice and retentions and is backing, via a coalition of trade associations, the Aldous Retentions Bill and has responded to the recent consultation of retentions in construction calling for legislation to end retentions.
BWF and Build UK continues to work with Government and PwC to understand which construction projects were being undertaken by Carillion.
To ensure that we can support the supply chain companies at risk and provide information to Government on the impact on the supply chain, we are continuing to ask for information on:
- The amount(s) that businesses are owed; and
- The % of turnover this represents.
Please send this information, which will be treated in the strictest confidence, to email@example.com
The BWF team are supported by a legal helpline that we can connect you to if you need any additional advice. I also draw your attention to some great resources available via the website if you want to review your credit management processes (including a free-to-use, unlimited credit checking service). If you have any outstanding questions or wish to make comment, as ever, please don’t hesitate to contact us.