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Carillion ‘didn’t pay suppliers last month’ as architects remain in the dark

Met midland hospital edward williams
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Individual architects and big practices working for Carillion are still in the dark about the future of projects run by the construction giant, which collapsed last week.

According to records held by the Architects Registration Board, Carillion employed five architects directly, although there could have been many more.

The AJ spoke to two of the five listed and both said that although they were still working, they had received little direct contact from the administrators of the stricken firm.

‘There has been no announcement, no consultation,’ said one, who was busy trying to help move projects on to other firms.

Another added they had received ‘no real indication of the future’ and had just been told to ‘keep working until further notice’.

Carillion went into liquidation on Monday 15 January with as much as £1.5 billion of debt.

Cabinet Office minister David Lidington told Parliament on the same day that there were only 48 hours of guaranteed government support from the government for Carillion’s non-public work.

Civil Engineering Contractors Association chief executive Alasdair Reisner warned that hundreds of architecture practices could be affected by the fallout of Carillion’s collapse.

Labour MP Jon Trickett told MPs in Parliament last night (24 January) that Carillion had not paid any bills from suppliers last month.

‘I met an employee of Carillion the other day, a subcontractor who told me that the company had a policy of not paying anybody in December because on 1 January the bank wanted to look to see how much liquidity was left,’ he said. ‘Isn’t that shocking?’

Trickett slammed the government’s belief in contracting out public work to the private sector – and warned there could be another big name failure. 

‘Maybe the government’s devotion to outsourcing is the real reason they failed so monumentally in relation to Carillion,’ he said. ‘They had a blind assumption that contracting-out always works efficiently and the market always knows best -– which we know is not the case.

‘If they do not learn from the repeated failures of outsourcing there will be another Carillion.’

Six experts from accountant PWC were last week appointed as ‘special managers’ with court-handed powers to support the liquidation of the £4 billion-turnover conglomerate.

Meanwhile, work remains halted on the huge scheme to regenerate the Vaux Brewery site in Sunderland. It is understood that Feilden Clegg Bradley was novated to Carillion Construction to help deliver the first phase of the project.

The regeneration was being carried out by Siglion, a joint venture between Carillion and Sunderland City Council.

Siglion chief executive John Seager said this week: ‘We have to follow the direction of liquidator PwC in terms of what we can and cannot say at this time, but we do wish to reassure people that we are doing everything in our power to ensure that work resumes on site as quickly as possible.

’We have been working tirelessly on the process to allow us to move forward as quickly as possible while maintaining continuity in terms of the subcontractors involved and the overall quality of the development. Our absolute priority remains to deliver a development that the city can be proud of.’

An Insolvency Service spokesperson said this week: ‘Carillion’s public sector contracts, safeguarded by the government’s funding commitment, are continuing to providing vital public services while the official receiver seeks to transfer these contracts to new providers. The Official Receiver is ensuring that Carillion’s workforce is being kept updated.’

The Insolvency Service added that Carillion’s liquidator was ‘not in position at this time’ to confirm that suppliers were not paid in December.

’Goods and services supplied with the Official Receiver’s agreement following the liquidation of Carillion will be paid in full,’ said a spokesperson. ’Subcontractors and suppliers who are owed money for work undertaken for Carillion prior to its liquidation are unsecured creditors and will need to lodge claims with the Official Receiver who will determine if there any funds left to pay these invoices.’

The spokesperson added that information for Carillion employees was available online.

Feilden Clegg Bradley has been contacted for comment.

The RIBA said it had received no direct enquiries from architects affected by Carillion’s collapse. The body had urged members to get in touch with any concerns.

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