Senior Living


Health & Spirit


By Alex Hawkes, Daily Mail, London on

Published in Senior Living Features

THE fallout from the Carillion collapse could cost the taxpayer more than £1billion, a senior insider at the company has said.

Fees paid to liquidation advisers PwC could also run into hundreds of millions, the source added.

The highly placed figure, who was involved in the attempts to save Carillion, said the Government's decision not to support a rescue plan was 'shattering'.

'There were very ignorant comments that Government money shouldn't be allowed to bail out failing firms. If the alternative costs you ten times as much then maybe it is the right thing to do,' the source said.

The Government was asked to provide a short-term £150million loan to be repaid in April. Carillion would then have received a further £100million in support, which would have been achieved by renegotiating problematic public sector contracts.

In return, the firm would have given the Government the right to the proceeds from a legal claim against engineering firm AECOM, with which it is in dispute over the Midlands Metropolitan hospital project. The Government was also offered shares in Carillion.

'Any business in trouble would go along to their major customer and say to them we need a bit of help here,' the source said.

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Now, the source added, the Government will be facing a string of 'ransom creditors' -- suppliers who are owed money on ongoing projects and considered so valuable to the project the liquidators will have to agree to their terms.

The source also lifted the lid on issues at the firm, saying: 'Information supply was poor, amazing for a company like this. It took longer than one would have hoped to get hold of the basic cash forecasts and that was only really achieved in December.'

The Cabinet Office said the insider's account 'does not reflect the totality of the proposals that were put forward'. Other sources said the PwC fee estimate was 'ridiculously over-inflated'.

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(c) Daily Mail, London


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