A snap poll of Carillion engineering sub-contractors shows that many companies are facing huge financial losses from the collapse of the construction giant. That’s according to new data obtained by the Building Engineering Services Association (BESA) and the electrotechnical and engineering services trade body ECA.
Carillion owes around £75m to around 80 engineering services firms, who provide vital services such as electrical, plumbing, gas, fire and security, and heating and ventilation. The overall losses are likely to be far higher, given there are thousands of businesses operating in the industry. The engineering services sector is the largest part of the construction industry by value.
The ECA and BESA survey shows that contractors of all sizes have been affected by Carillion’s demise:
•The total value of ongoing contracts with Carillion is worth £47.2m, which are now at risk.
•Micro businesses (less than 10 employees) are owed on average £98,000. One of these SMEs is owed over £250,000.
•Small firms (10-49 employees) are owed £141,000 on average. One of these contractors is owed £800,000 by Carillion.
•Medium-sized businesses (50 – 249 employees) are owed on average £236,000. One of these firms is owed almost £1.4m.
•Large businesses (250 employees +) are owed on average £15.6m. This figure includes Balfour Beatty’s widely reported £45m loss from joint ventures with Carillion (see Notes to Editors).
PwC said any private sector work undertaken by Carillion suppliers before 15th January 2018 this year would be unpaid. Instead, it would be treated as ‘unsecured debt’, and placed at the back of the queue behind other creditors.
Tom Hopkinson, President of BESA, said: “We knew the fall-out from this seismic episode would be extremely serious, but these figures give us a clearer picture of just how hard our sector is going to hit in terms of the thousands of pounds of unsecured debt that will be lost by ordinary hard working small businesses, jeopardising their future and the future of their staff.”
