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Following the announcement that Carillion has entered liquidation, BESA is calling on the Government to give clarity about what this now means for the thousands of subcontractors affected, and updates on this progress can be found below.
The current advice from The Official Receiver and its special managers PwC are telling Carillion subcontractors and staff to continue working as normal.
The official liquidation website can be viewed here.
BESA and ECA have today (25/01/18) reconfirmed their four key recommendations to enact as soon as possible with the aim of mitigating pressure in the immediate aftermath of the liquidation, while ensuring that such a seismic event does not happen again.
The Four Point Plan:
• SME contractors working on Carillion public sector projects must be allowed to continue on these projects, working for and being paid directly by the public sector.
• UK Government must actively support the Peter Aldous Bill on retentions and ensure it is allocated enough Parliamentary time to progress.
• The public sector procurement process should utilise and integrate existing solutions, such as Project Bank Accounts, to mitigate risk, protect payment and ensure suppliers are paid on time.
• Public sector clients must enforce 30 day payment terms down the supply chain and not accept tenderers who pay their suppliers late.
In a positive statement for FM contractors (including many schools and hospitals), over 90% of Carillion FM public and private sectors contract clients want PwC to roll over contracts.
Progressive main contractors have issued statements in relation to their joint venture projects with Carillion:
Further, the PWC website now has construction specific FAQs on it. BCSA is reviewing these FAQs and will query government if they are not clear or incomplete:
Major banks have committed to making specialist arrangements to cater for creditors of Carillion or those caught up in the Carillion supply chain. This will be made clear in communications on each bank’s website, outline details below:
HSBC LAUNCHES £100M EMERGENCY FUND FOR SMALL BUSINESS SUPPLIERS OF CARILLION:
The fund opens today and will be used to help waive fees on financing facilities as well as to offer short-term capital repayment holidays for the worst affected firms.
In addition, HSBC UK is contacting companies who may need help, to discuss how we can best support them. HSBC UK business customers who want to contact us should speak to their Relationship Manager or call us on our dedicated Carillion helpline, 0800 0121 614.
Lloyds Banking Group announces £50m emergency fund for small businesses in Carillion's supply chain
The fund will be open from today and existing small business customers can apply through their usual relationship contacts, who are on hand to support businesses in need of assistance.
The fund is designed to support the working capital needs of small businesses within Carillion’s supply chain that may now be experiencing financial difficulty. It will provide them, subject to credit approval, with arrangement fee-free overdrafts and, for the most severely impacted customers, with capital repayment holidays on loans for an initial six month period, to help with cashflow shortages caused by the liquidation.
Customers will also be able use the fund to extend or draw new invoice discounting or factoring products, free of arrangement fees.
The Group’s support will also include guidance on working capital requirements to help firms unlock cash so they can manage their way through the difficulties they currently face.
RBS ANNOUNCES £75M FOR IMPACTED SMALL BUSINESSES IN CARILLION’S SUPPLY CHAIN
RBS has over £75m available to support impacted customers and will make more finance available if required.
RBS has a proactive approach that allows it to assist its customers when there are unexpected external circumstances. This support is available to customers banking with NatWest, Royal Bank of Scotland and Ulster Bank in Northern Ireland.
The bank has already started proactively contacting business customers who supported Carillion. Other impacted customers are encouraged to get in touch to understand the unique support and guidance that can be offered to their business.
This can include:
Impacted customers can contact their normal business contact at the bank or telephone:
Royal Bank of Scotland customers - 0345 600 2230 (Minicom 0800 404 6160).
NatWest customers – 03457 11 4477 (Minicom 0800 404 6161)
Ulster Bank Northern Ireland customers - 1850 211 690 if calling from within Ireland and 0044 2890 538 459 if calling from outside Ireland.
On 17th January, BESA met with the Government and PWC - below is a summary of information that will be relevant to the running of your business:
o Face to face direct meetings and conversations since Monday
o PWC Carillion website set up as a focal point for those concerned – a dedicated team is set up to help.
o Creditors will have to examine the exact contents of those commitment letters to gage the full scope of PWC’s authority to re-engage on contracts, i.e. what PWC is actually promising to pay for.
Wider payment practices:
At a meeting with other industry leaders and Secretary of State for Business Energy and Industrial Strategy Greg Clark, the Minister responded to BESA's concerns by pledging that Government need to squeeze out every single lesson we can learn to guard against this situation happening in the future.
Specifically, Government and Industry need to take the following steps together:
If you are directly or indirectly affected by this morning’s announcement please get in touch with Alexi Ozioro, BESA’s Policy Coordinator, by emailing email@example.com and he will liaise with your local MP to represent on your behalf.
We are also urging members to complete a short survey to gather information regarding the impact of the closure, please complete it here.
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