Carillion liquidation: Jeremy Corbyn attacks ‘rip-off' privatisations as workers face uncertainty - as it happened
Labour leader says Carillion crisis is a 'watershed moment' for UK public services, as government ministers discuss their next step
- Latest: Corbyn blasts PFI failings
- Private sector contracts guaranteed for 48 hours
- Minister David Lidington updates MPs
Earlier:
11.23pm GMT
Finally, some 16 hours after Carillion went into liquidation, here are the other front pages:
Tomorrow's @telebusiness front page: Counting the cost of Carillion's collapse pic.twitter.com/yYeoKoADvV
Tuesday's i
"Taxpayers take the hit on Carillion"#tomorrowspaperstoday#bbcpapers
(via hendopolis) pic.twitter.com/BtF42zUI9S
INDEPENDENT DIGITAL: Carillion faces inquiry into bosses' 4m bonuses #tomorrowspaperstoday pic.twitter.com/GDLFtdFB5Z
DAILY MIRROR: Yet again you pay #tomorrowspaperstoday pic.twitter.com/2N71bFUXJb
10.33pm GMT
The Times says taxpayers could be on the hook for significant losses:
THE TIMES: Taxpayers face huge bill for collapse of Carillion #tomorrowspaperstoday pic.twitter.com/LiZ0ToCn3w
10.30pm GMT
Tuesday's Guardian also leads on Carillion:
GUARDIAN: Scramble to save jobs as Carillion crisis deepens #tomorrowspaperstoday pic.twitter.com/m74PIavyO1
10.03pm GMT
Here's tomorrow's FT:
Just published: front page of the Financial Times UK edition Tuesday January 16 https://t.co/1jNho1IN2K pic.twitter.com/BtBt69HHcL
8.46pm GMT
Thousands of staff who worked for the collapsed construction firm Carillioninside private-sector companies will have their wages stopped on Wednesday unless their jobs are rescued by other firms, the government has said.
Carillion fallout deepens as workers face pay being stopped in 48 hours https://t.co/JIcP7XO48g
8.34pm GMT
The Daily Mail is focused on the news the Official Receiver will probe Carillion's bosses pay.
It has singled out several examples of 'fat cat' remunerations, including:
Richard Howson, who headed the company from 2012 until July 2017, pocketed 1.5 million in 2016 - including a 122,612 cash bonus and 231,000 in pension contributions.
As part of his departure deal, Carillion agreed to continue paying him a 660,000 salary and 28,000 in benefits until October - even though he left the company for good last autumn after a brief spell as an adviser.
8.28pm GMT
The Daily Telegraph is reporting that Carillion owes around 1bn to around 30,000 UK firms, which would put "thousands of jobs and pensions at risk". More here.
8.24pm GMT
Jeremy Corbyn's punchy attack on Public Finance Initiative contracts will intensify the pressure on government ministers to get a firm grip on the Carillion situation.
Especially as thousands of smaller companies are still grappling with the consequences of the biggest, and most disruptive, UK corporate failure in years.
"The fallout from this could be horrendous," said Rudi Klein, chief executive of the Specialist Engineering Contractors' Group.
"The domino reverberations as it travels down the supply chain could be unprecedented."
8.14pm GMT
There are alarming signs tonight that some Carillion contractors may already be cutting staff.
My colleague Simon Goodley explains:
A worker on the new Midland Metropolitan hospital building told the BBC: "Everyone on the site got told: 'That's it, go home'. My company said, 'You've been laid off'."
"They've literally locked the gate. They've told us we can get our personal tools off the site if they're small, but that's it."
Related: The four contracts that finished Carillion
7.43pm GMT
Labour leader Jeremy Corbyn is calling for fundamental changes in the way public services are delivered in the UK, following the liquidation of Carillion.
In a video message, Corbyn vowed to end the "PFI rip-off", end the dogma that "private-profit-is-best" and run Britain's public services "for the benefit of the many, not the profits of the few".
In the wake of the collapse of the contractor Carillion, it is time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced the public of billions of pounds.
This is a watershed moment.
"Staff and patients in our NHS are facing shocking conditions this winter. Tory underfunding has caused the crisis, but privatisation, outsourced contracts and profiteering has made it worse.
"Our public services - health, rail, prisons, even our Armed Forces' housing - are struggling after years of austerity and private contractors siphoning off profits from the public purse.
Jeremy Corbyn says the collapse of #Carillion is a "watershed moment", adding: "it is time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced the public of billions of pounds."
7.23pm GMT
Over in the House of Lords, a former Conservative chancellor has backed calls for an inquiry into Private Finance Initiative (PFI) contracts in the aftermath of Carillion's demise.
Subsequent chancellors, especially Labour's Gordon Brown, were "enthusiastically in favour of it", Lawson continued, because it enabled ministers in the short term to "dress up" considerable amounts of public expenditure off the public sector balance sheet.
He said this was not a good reason for something which did not give good value for money for the taxpayer and introduced "a degree of moral hazard which we see very much in the Carillion affair".
7.16pm GMT
Education minister Nick Gibb is also attending the ministerial meeting - understandably, as Carillion provides services, such as meals, to 230 schools.
We're expecting to hear details of the meeting later this evening.
7.14pm GMT
Over in Whitehall, government ministers are discussing the Carillion crisis at the Cabinet Office.
Chancellor Philip Hammond is there. As he arrived, journalists asked whether taxpayers could suffer losses from the company's collapse, but he didn't answer.
7.11pm GMT
The Press Association focuses on the news that Carillion's top executives are being investigated over their conduct (as covered earlier in this blog)....
Here's a flavour:
7.04pm GMT
Government minister Oliver Dowden has told Channel 4 News that Carillion staff should keep clocking on, despite the huge uncertainty over their future.
Now on Channel 4 News: "This is a regrettable situation and we urge all employees to turn up for work. The government is working to supply all the support they can" Cabinet Office minister Oliver Dowden on #Carillion crisis. pic.twitter.com/fEGAoVnpTU
6.58pm GMT
Carillion's lurch into liquidation shows "the consequences of corporate greed", says the Guardian's editorial tonight.
Solving this culture requires short-term, and long-term, answers, we say.
The immediate steps are obvious: a full investigation into the liquidation (City regulators have questions too). But Carillion's failure is much more than that. It is the collapse of an idea that has held for 30 years.
Outsourcing public sector contracts wasn't just a doctrinaire response to high levels of borrowing. It was also because Whitehall was not very good at it. That makes wholesale renationalisation, not least in a Whitehall stretched to breaking point by Brexit, extremely unlikely. This is a crisis that has been looming for years.
6.52pm GMT
Our financial editor, Nils Pratley, has lambasted Carillion's management for not doing a more competent job:
Responsibility for Carillion's collapse lies in the boardroom. It is the job of the directors to manage risk and the eight pages of Carillion's last annual report devoted to the subject clearly only scratched the surface.
Chairman Philip Green should have spent less time wondering about the long-terms risks from Brexit and more time addressing the upfront and present dangers from cost over-runs on three big jobs: new hospitals in Liverpool and Smethwick plus the Aberdeen bypass.
Related: Blame the deluded board members for Carillion's collapse
6.41pm GMT
If you're just tuning in, here's Reuters' latest story about the Carillion crisis.
"I think that is a reasonable gesture towards private sector employees."
Britain will pay Carillion's private sector workers for 48 hours: minister https://t.co/o1U1WW3s26 pic.twitter.com/oqwuM3mFbe
6.40pm GMT
This must have been a very rough day for Carillion's 45,000 workers, including around 20,000 in the UK.
Work has continued at some sites, as these photos show:
6.37pm GMT
I'm afraid I missed Labour MP Chi Onwurah's question to David Lidington; fortunately she's just tweeted a clip:
Tories have betrayed Newcastle twice over Carillion, told them to commit to supporting jobs, pensions and our economy - a helpline won't cut it. pic.twitter.com/0Gm0bAUCwS
6.26pm GMT
It's official: Carillion haven't cut any staff today.
Liquidator confirms no one has been dismissed from Carillion. "Everyone is still on the payroll". Including, it would appear, former CEO Richard Howson. Howson left last year but company is still paying his salary (660,000) and benefits (28,000) until October.
6.26pm GMT
That's the end of David Lidington's lengthy statement on Carillion.
6.08pm GMT
Carillion is the most 'appalling epitome of lemon socialism', says Labour's Paul Sweeney, as a failing company is being propped up.
Lidington firmly denies it, saying that Carillion's creditors and shareholders have suffered financial losses.
6.07pm GMT
Matt Western, Labour MP, says that Carillion was the most shorted stock on the London stock market in 2016 (meaning hedge funds were betting against it).
Why didn't the government take notice? Was there a blind spot?
6.05pm GMT
Here's a clip of Rachel Reeves' question:
Carillion had debts of 900 million and a pension deficit of 600 million. Yet year after year they paid dividends to shareholders. Govt must do much more to prevent companies siphoning off money to the detriment of suppliers, workers and the British taxpayer. pic.twitter.com/vlA3hgkQUz
6.04pm GMT
Diana Johnson MP says the 'reward for failure' at Carillion show that the government should crack down on executive pay.
David Lidington reiterates that the Official Receiver can take action against any directors who have acted unacceptably.
6.03pm GMT
Labour MP Toby Perkins asks why the government allowed its 'crown representative' at Carillion to lapse this summer [as revealed earlier], just as the company filed its first profits warning.
Lidington says a new Crown Representative has been appointed, and will be named soon (isn't it a bit late now?!).
5.58pm GMT
Labour's Kate Green asks if Carillion has been hit with penalties over its poor management of the prison service contract? (all those broken windows at Wandsworth....)
Lidington says he'll ask the Justice department.
5.55pm GMT
Labour's Stephen Kinnock says Carillion is a 'sorry tale of the privatisation of profit and the nationalisation of risk'.
Q: Isn't the case for a windfall tax on these companies now unanswerable?
5.54pm GMT
Conservative MP Robert Coutts asks the government to guarantee that Oxford's John Radcliffe hospital* won't be hurt by Carillion's collapse [Carillion has provided services at the JR since 2005]
Lidington says there is not sign that the JR has been affected by Carillion's problems.
5.49pm GMT
Lidington denies that he is just providing a helpline - we are also guaranteeing that public sector contracts will continue.
5.47pm GMT
Lidington denies that Carillion's demise reflects badly on the UK, saying that "there are few countries where companies don't fail".
5.46pm GMT
Carillion's collapse is a welcome reminder that "Capitalism without bankruptcy is like Christianity without hell," says Conservative MP Andrew Bridgen.
"Without it - there's nothing to keep us on the straight and narrow."
5.44pm GMT
Does the government's protection of Carillion's public sector contracts include new commitments, or might early-stage projects be ditched, asks Labour's Louise Haigh.
Lidington says the Official Receiver, and government departments, must examine each contract to see how to take them best forward.
5.40pm GMT
Kevan Jones MP asks about Carillion's habit of not paying suppliers for several weeks (120 days in some cases, apparently)
Q: What will the government do to help them?
5.38pm GMT
How many profit warnings does a company have to issue before this government decides not to hand it any more business, asks Liberal Democrat MP Stephen Lloyd.
Lidington replies that profit warnings happen from time to time; shunning a company on this basis would only push it into deeper problems.
5.36pm GMT
Conservative MP Kevin Foster asks what protections are being provided for Carillion pensioners.
Cabinet Office minister David Lidington says the Official Receiver must examine 12 separate pension funds. But the bottom line is that all existing pensioners will be protected.
5.31pm GMT
Labour's Liz McInnes asks if the Carillion crisis will exacerbate the NHS's winter crisis.
Lidington says (again) that contingency plans are in place to protect health services.
5.30pm GMT
Conservative MP Bob Neill asks how Carillion's prison contracts will keep operating.
Lidington says the government has contingency plans - a new government company could be created to take over this work.
5.28pm GMT
Sam Coates of The Times is stuck by the government's warning that Carillion's private sector contracts could be terminated on Wednesday, unless customers commit to keep paying up.
Carillion: Sub contractors involved in the firm's public service worn will also be protected; those involved in private sector will not
Carillion - public sector employees' wages will continue to be paid. Private sector employees will see fate decided in next 48 hours - Lidington
NOT A GOOD LINE TO TAKE, MINISTER
David Lidington accuses Labour of 'scaremongering' and 'political point scoring' over the collapse of Carillion - with 20,000 UK jobs and billions in state contracts on the line!
Catching up with Carillion debate, but David Lidington completely side-stepped question of whether the ex-ceo should continue to get 660,000 'salary' this year (that's right, even tho he's already left)
5.21pm GMT
Another Labour MP, Pat McFadden, asks about the new 'jobcentre plus' helpline which the government has set up today.
Q: Doesn't that undermine his promise that they will keep being paid if they turn up to work?
But after 48 hours, either the private sector counter-party must agree to fund future provision including the fees of the Official Receiver, or those private sector contracts of Carillion will be terminated.
5.14pm GMT
Labour's Stella Creasy says Carillion has made nearly 1bn profit on PFI contracts over the last four years.
Will the government now bring in a windfall tax on PFI profits?
Extraordinary to hear Government ministers calling for review of procurement and suggesting a tighter grip on companies used - this government supposedly reviewed and fixed PFI problems in 2012 and created PF2. Which carillion contracts are" #pfiddle
5.11pm GMT
Labour's Hilary Benn asks David Lidington to confirm that all payments made to Carillion under PFI contracts from councils will now cease, and that the Official Receiver will not be allowed to sell these contracts on.
Lidington says he isn't aware of any PFI contracts facing an immediate crisis; but the future of all Carillion contracts depends on finding fresh suppliers to take them on.
5.09pm GMT
Conservative MP Sir Desmond Swayne asks whether government officials are capable of spotting when a company is pitching its services too cheaply.
Lidington says there should be a 'fresh look' into how the government handles such issues.
5.07pm GMT
Labour's Rachel Reeves points out that Carillion kept paying dividends to shareholders, even as it ran up 900m of debts and a 580m pensions black hole.
And it is still paying 600,000 to its ex-CEO (Richard Howson)
5.06pm GMT
Echoing Bill Cash's comments, Conservative MP Dame Cheryl Gillan says that Carillion's demise is a great opportunity to cancel HS2.
Lidington reiterates that Carillion's liquidation doesn't affect the construction of HS2.
5.04pm GMT
Labour MP Emma Reynolds asks Lidington about the revelation that Carillion changed its bonus rules, to make it harder to claw money back from bosses.
Lidington says he mustn't pre-empt the Official Receiver's probe into the conduct of past and present directors. But he emphasises that the Receiver can impose 'severe' penalties if there has been misconduct.
5.02pm GMT
Tory MP Bill Cash asks about the impact on High-Speed Two .
Does Carillion's collapse affect the viability of the project?
Bill Cash, whose constituency is "carved up" by #HS2, asks about impact on his consituents. @DLidington reconfirms that other JV partners are bound to continue project, for same price #Carillion
5.00pm GMT
Labour MP Eleanor Smith says the liquidation of Carillion hit workers like a bomb today (the company's HQ is in her Wolverhampton constituency).
What support will the government provide? What future can ministers provide?
Wolverhampton South West MP Eleanor Smith asking for a meeting with govt, sounds genuinely moved by it all #Carillion. @DLidington says happy to meet.
4.57pm GMT
Conservative MP Iain Duncan-Smith congratulates David Lidington on his 'swift action' over Carillion.
He says Labour drove the move towards outsourcing public services (during the Blair-Brown years).
4.54pm GMT
The SNP's Tommy Sheppard asks what will happen to Carillion's contracts in Scotland.
He also asks what due diligence was carried out by the government, given it handed Carillion 2bn of contracts in recent months.
4.49pm GMT
David Lidington says that Carillion only held contracts with 230 UK schools.
He confirms that 60% of Carillion's revenue comes from private sector contracts. There is currently a 48-hour 'grace period' while customers decide whether to maintain those contracts or look elsewhere.
David Lidington hits back at Labour's Jon Trickett, pointing out a third of Carillion contracts were signed by the Labour government - when Trickett was working in Brown's No10
4.39pm GMT
Jon Trickett asks David Lidington to reassure the House of Commons that Carillion isn't the first in a series of dominos, and accuses the government of being 'too cosy' with Carillion management.
"Reckless, helpless and hopeless" @jon_trickett in the chamber now slamming the Government over Carillion collapse pic.twitter.com/3MhOFRB7T3
4.38pm GMT
Labour's Jon Trickett is responding to David Lidington.
He says Lidington's statement was 'recklessly complacent' in trying to avoid taking responsibility for the collapse of Carillion, which held 450 government contracts.
4.32pm GMT
Lidington says that the private sector plays an important role delivering UK public services - something that parties on both sides of the House of Commons have accepted.
4.30pm GMT
Lidington say the government's role is to plan and prepare contingency measures for Carillion.
Its 'top priority' is to keep public services running, so the government will support the Official Receiver to deliver uninterrupted services.
MPs noisily reaction to @DLidington's assertion that govt has been monitoring #Carillion closely since July profit warning
4.26pm GMT
Cabinet office minister David Lidington is delivering a statement on the Carillion crisis to MPs now.
He says the failure of Carillion is regrettable, but it is the failure of a private sector company. Its shareholders and lenders should bear the brunt of the cost.
4.12pm GMT
Breaking away from parliament, Britain's prison officers are urging the government to take Carillion's contract for prison maintenance back into public hands.
Steve Gillan, general secretary of the POA trade union, says facilities have deteriorated on Carillion's watch.
We need to know the contingency plans to keep our prisons operational. During the time Carillion had this contract the level of essential maintenance and work that is outstanding has spiraled out of control.
This has resulted in loss of prison accommodation and in-humane conditions in our prisons.
When I visited Wandsworth prison I was surprised at how many cell windows were broken - too many to count. It was January and quite cold. Staff said responsibility for mending windows had been outsourced to #Carillion https://t.co/ayvkBcqytX
4.04pm GMT
Britain's top civil servant, cabinet secretary Sir Jeremy Heywood, admits that Carillion has gone badly wrong.
The Cabinet Secretary says to @commonspacac that the collapse of #Carillion is a 'bad outcome for the country' pic.twitter.com/18VyGvMwqv
Sir Jeremy Heywood: The system as a whole is robust, but clearly Carillion has gone badly wrong. #Carillion we have launched an inquiry https://t.co/19I6atLIhB pic.twitter.com/gD045Tn9lK
4.00pm GMT
John Manzoni tells the PAC committee that he hopes that "most" of the jobs and pensions at Carillion will be preserved.
That's effectively an admission that some won't be....
Manzoni: we hope that most of the the pensions of the 20,000 people employed by Carillon will continue to be paid #Carillion pic.twitter.com/jI4a7CHv05
3.54pm GMT
The Public Accounts Committee is uncovering some intriguing detail into the Carillion breakdown, as it quizzes Cabinet Office head honcho John Manzoni.
Manzoni has revealed that the government's Crown Representative 'rotated off' the Carillion account this summer - just when the company suffered its first profit warning.
Whitehall boss John Manzoni admits Carillion's monitoring Crown Representative rotated off in the summer to focus on other work, at the time of the profits warning....
Manzoni concedes in front of MPs that while Carillion's July profit warning that put civil servants 'on notice' officials only 'really started to notice in November' after the *second* profit warning. Does that mean at first they missed it?
3.31pm GMT
There seems to be some confusion about this crisis meeting....
Downing Street is now correcting the Defence Secretary and saying it is not a Cobra meeting but a meeting of junior ministers to discuss Carillion. @Number10press
Q. When is a COBRA meeting not a COBRA meeting? A. (from Downing Street) When it's a planned ministerial meeting that happens to be taking place in Cabinet Office Briefing Room A #Carillion
3.30pm GMT
The Public Accounts Committee is now quizzing the cabinet office's top civil servants about why Carillion was handed public sector contracts at a time when City hedge funds were betting against the company.
Q: Why can't the government tell a company like Carillion to 'take a holiday' from bidding for government contracts, because they look high risk?
We have put it to the Official Receiver with an instruction to keep public services running....
The cost of that is no greater than running these contracts in the normal course of business.
Cabinet Office perm sec John Manzoni comes close to a 'crisis, what crisis?' moment on #Carillion. "Companies fail and succeed and we need to accept some of that will happen...some wheel is going to come off somewhere in the structure." But says lessons hv bn learned in past.
3.19pm GMT
Newsflash: Britain's Public Administration and Constitutional Affairs Committee is launching a new inquiry following Carillion's liquidation.
The inquiry will be called "Sourcing public services: lessons to be learned from the collapse of Carillion".
UK parliamentary committee says it will launch inquiry into government outsourcing in light of #Carillion collapse pic.twitter.com/sZIeZIWgVR
2.50pm GMT
Over in parliament, defence minister Gavin Williamson has revealed that the government will hold a crisis meeting later today to discuss the collapse of Carillion.
During defence questions, Williamson told MPs that:
We've been monitoring this very closely, and working with our industrial partners.
There will be a Cobra meeting today later on today to look at addressing some of the most immediate issues.
Gavin Williamson - COBRA will meet later today to discuss Carillion.
NEW: Government emergency committee COBRA is meeting later today to discuss the collapse of Carillion - it will "look at addressing some of the most immediate issues", Defence Secretary Gavin Williamson says
2.40pm GMT
George Osborne's attempt to blame the civil service for the Carillion crisis may be backfiring, as photos of the ex-chancellor posing in Carillion-branded hard hats hit the internet.
How did it happen I wonder pic.twitter.com/AGNkqwxO0s
Osborne on Carillion: Then and Now https://t.co/a8KDMzw7Bk pic.twitter.com/bj51omNRo6
2.29pm GMT
Britain's corporate governance watchdog, the Financial Reporting Council, have revealed they have been "actively" watching the situation at Carillion.
That's may not be much comfort to Carillion's workers and clients. But it could suggest that Carillion's auditors, KPMG, will face investigation.
We have been actively monitoring this situation for some time in close consultation with other relevant regulatory bodies.
We have powers to investigate the circumstances relating to the audit of Carillion as well as the actions of the relevant accounting professionals.
2.15pm GMT
Equipment firm Speedy Hire is being pummelled by City traders, sending its shares down by up to 8% today.
Carillion was a major customer for Speedy Hire, which supplies tools to the construction industry.
Serco the winner, Speedy Hire the loser today from the #Carillion collapse pic.twitter.com/w0WmlmOMr8
1.59pm GMT
The collapse of Carillion has also caused alarm in the Republic of Ireland.
"Eureka Secondary School in Kells is due to open in a matter of weeks but as a result of the difficulties at Carillion, there is doubt as to when it might happen, and who will provide the facilities management and catering services in the school."
1.55pm GMT
Update: Cabinet Office minister David Lidington is expected to update MPs on the Carillion crisis at around 4.15pm.
Defence in Parliament update: 3.30pm today - urgent question about the National Security Capability Review. So this will follow defence oral questions at 2.30pm. Government statement on Carillion expected around 4.15pm. https://t.co/eJ3knaOJz2
1.52pm GMT
A spokesman for the RMT rail workers union said it was "almost inevitable" that some trains won't be cleaned today due to the collapse of Carillion.
That's due to the problems with its fuel cards (see earlier post)
1.43pm GMT
Sam O'Callaghan, solicitor in the construction, energy and projects team at Capital Law, predicts that Carillion's project portfolio will face "significant" difficulties.
Sub-contractors, consultants, and clients may end up losing out on money that they're contractually entitled to. Secured creditors (like banks) will be putting their hands in the insolvency pot first.
Every sub-contractor, consultant, or anyone involved in a contractual chain with Carillion should take immediate action - starting by reviewing their contract, or getting their lawyer to do so."
1.33pm GMT
1.30pm GMT
The Press Association is reporting that fuel cards issued to Carillion workers were rejected at petrol stations this morning.
PA says:
Train cleaners have been told to work normally, but their fuel cards are not working, according to the Rail, Maritime and Transport union.
One cleaner filled up at a petrol station, but the Carillion Fuel Card bounced.
.@rmtunion says Carillion cleaners on Arriva Rail North have been told to work as normal this morning - but their fuel cards are not working
One worker has filled up at a petrol station, but after his Carillion fuel card bounced he now has no means of paying for his petrol ai
1.28pm GMT
Frank Field MP, Chair of the Work and Pensions Select Committee, has condemned Carillion for allowing its pension deficit to swell (to at least 580m).
"Carillion took on mega borrowings while its pension deficit ballooned. We called over a year ago for The Pensions Regulator to have mandatory clearance powers for corporate activities like these that put pension schemes at risk, and powers to impose truly deterrent fines that would focus boardroom minds.
"If Government had acted then, the brakes might have been put on Carillion's massive ramping up of debt and it never would have fallen into this sorry crisis. It seems we have a new case like this every week, and this one is particularly disastrous, with massive job losses and 28,000 current and future pensioners at risk.
1.18pm GMT
Carillion's collapse is good news for one group -- its rivals.
Of course there were plenty of vultures in the sector circling the Carillion carrion. Serco Group, which bought 47.7 million in healthcare contracts from the crisis-hit company back in December, jumped 4.5%, while Capita climbed 1% and Interserve rose 2.6%.
1.10pm GMT
As chancellor of the exchequer between 2010 and 2016, George Osborne had a tight grip on the nation's purse strings.
Now, in his new role as editor of the Evening Standard, Osborne blames the civil service for handing too many contracts to big firms like Carillion.
The failure to use a variety of smaller, mid-size companies undermines innovation and leaves services hostage when things go wrong.
Why was Carillion awarded huge contracts by the civil service, with whom rather than ministers almost all procurement decisions lie after they knew it was struggling last year?
Today's editorials @EveningStandard on banning plastic straws and the collapse of Carillion https://t.co/PgYlNhR4ju
1.01pm GMT
Peter Kitson, Partner at law firm Russell-Cooke, says Carillion may have caused its own demise by pitching its services at an uncompetitively low rate - to win business.
"The procurement rules (the Public Contracts Regulations) which govern public sector procurement are central to understanding what has happened here. Almost all Carillion contracts have been competitively tendered under those procurement rules.
The rules require public sector clients to investigate and possibly to exclude any tenderer whose bid is 'abnormally low'. One contributory factor here may be that Carillion has tendered at very low margins, possibly unsustainably low, in order to win these huge volumes of work.
12.46pm GMT
The British Army is reassuring military families that Carillion's collapse won't hurt them:
The financial situation of Carillion has no direct impact on services provided directly to those working for Armed Forces or their families. Housing will continue to be serviced, catering facilities run, and buildings and offices cleaned.
12.44pm GMT
Carillion's collapse will have widespread consequences for local authorities and housing associations across the UK.
Andrew Lancaster, partner at Anthony Collins Solicitors, says organisations may face extra costs as they scramble to find new contractors to step in.
While it's likely some key public sector contracts will be ring-fenced and supported in some way by the government, local authorities and housing associations still need to provide their residents and communities with resilient public services in the coming week. This means back up contractors need to be found immediately, requiring huge amounts of time, resource and additional expenditure.
"I would urge such organisations to read their contracts' payment and termination clauses and, crucially, to comply with them to avoid any claims from the liquidator later on for any breach
12.29pm GMT
Here's my colleague Dan Sabbagh, reporting from today's House of Commons lobby briefing on Carillion:
12.21pm GMT
The Institute of Directors has issued a stinging rebuke to Carillion's top executives and directors over its pay policies.
Roger Barker, head of corporate governance at the IoD, is particularly alarmed that the company changed its bonus rules to protect top bosses.
Today's outcome suggests that effective governance was lacking at Carillion, and we must now consider if the board and shareholders have exercised appropriate oversight prior to the collapse.
"There are some worrying signs. The relaxation of clawback conditions for executive bonuses in 2016 appears in retrospect to be highly inappropriate. It does no good to the reputation of UK business when top managers appear to benefit in spite of the collapse of the organisations that they are responsible for.
12.16pm GMT
Lord Adonis - who earlier suggested Carillion could be a British Enron - says the government should consider taking its contracts back into state control.
12.07pm GMT
Carillion's shocking collapse should trigger a full review of the privatisation of public services in the UK, says Guardian columnist Simon Jenkins:
What the Carillion saga demonstrates is the rampant indiscipline in the contracts themselves. The company's demise is attributable to favouritism, cost escalation, excessive risk, obscene remuneration and reckless indebtedness. Carillion and its bankers clearly thought it too big to fail. Whitehall behaved accordingly. It was like a pre-2008 bank.
There must now be a review of how privatisation is working. Its so-called parastatal companies are not true private entities. They depend on the state, and the state depends on them. Their lobbyists develop an unholy relationship with ministers and officials - witness the uncontrolled revolving door between Whitehall and the boardrooms.
Related: I'm not surprised by Carillion's failure - companies like this shouldn't exist | Simon Jenkins
12.04pm GMT
Lee Causer, partner at accountancy firm Moore Stephens, predicts that Carillion's failure will have "huge ramifications" across the construction sector.
He expects contracts to be delayed, and some suppliers to go bust.
"Many of Carillion's suppliers will have automatically assumed that a group the size of Carillion would be rescued. Therefore, many will not have prepared for its collapse and will struggle to get alternative contracts in place.
"The failure of Carillion will inevitably lead to disruption across the supply chain, and financial turmoil for sub-contractors who relied on business from Carillion.
12.00pm GMT
11.55am GMT
Related: What went wrong with Carillion and where does it go from here?
11.54am GMT
Professor John Colley of Warwick Business School says Carillion was sunk by two serious mistakes:
Too many contracts were taken at poor margins and terms, which prevented any subsequent profitability under competitive pressure. Some were allocated during the recession when it was win work at all costs.
"The other key issue is project accounting, which tends to recognise losses late in the project, effectively when the project starts to run out of money. There will no doubt be serious retrospective scrutiny of the accounting.
11.51am GMT
Sarah Beale, chief executive at the Construction Industry Training Board (CITB), fears that Carillion's apprentices could soon be out of work.
She is pushing the Official Receiver to support Carillion's trainees:
"The news of Carillion entering insolvency is clearly a significant blow to the UK construction sector. While this will present the sector with a number of challenges, CITB's priority is to do all it can to ensure that Carillion apprentices can continue their training so their skills are not lost.
"We have established a project team to work with the apprentices and will be offering in principle grant and apprenticeship transfer incentives to our employer base in order to retain these learners.
11.48am GMT
Newsflash: Theresa May's spokesman is briefing journalists about Carillion's collapse.
He says it is 'regrettable' that Carillion couldn't find the funding required to keep operating, but taxpayers can't be expected to bail it out
Some Carillion contracts may have to be taken back in house "further down the line" says the PM's official spox. But not HS2, which the other contractors will take on.
11.35am GMT
Carillion's army of workers are suffering a 'terribly time' today, says UNISON general secretary Dave Prentis.
"Staff need assurances about whether they have a job, who will pay their wages, and what's going to happen to their pensions.
"The government needs to move quickly to bring these contracts back in-house - to safeguard our services and to protect the many staff in schools, hospitals, local authorities and libraries.
"Crucial public services have been put at risk, and the taxpayer is going to be stuck picking up the bill for yet another failed privatisation experiment.
"Carillion holds key contracts across the health service - with the current winter pressures, staff shortages and underfunding, further uncertainty puts the NHS in a precarious position."
11.26am GMT
Last week, my colleague Aditya Chakrabortty warned that the Carillion crisis could have a major impact on the UK:
This is a firm that employs just under 20,000 workers in Britain - and the same again abroad. It has a huge chain of suppliers - and its habit of going in for joint ventures with other construction businesses means that a collapse at Carillion would send shockwaves through the industry and through the government's public works programme.
To see what this means, take the HS2 rail link, where Carillion this summer was part of a consortium that won a 1.4bn contract to knock tunnels through the Chilterns. If Carillion goes under, what happens to the largest infrastructure project in Europe?
Related: The company that runs Britain is near to collapse. Watch and worry | Aditya Chakrabortty
11.19am GMT
The decision to put Carillion into a full-blown compulsory liquidation shows how little value was left within the company.
David Birne, insolvency partner at chartered accountants H W Fisher & Company, says it is 'extremely rare' move for a company of Carillion's size - and bad news for its staff.
"For Carillion's 43,000 global staff, liquidation means the immediate risk of redundancy.
"For Carillion it will mean huge breach of contract penalties that could dwarf anything demanded of it by creditors.
11.11am GMT
Andy Street, the former John Lewis boss who became the first mayor of the West Midlands last year, is setting up a taskforce to support employees of Carillion and subcontractors affected by the company's collapse.
"We'll want to make sure as much cash as can be raised is raised, so that small businesses who are subcontractors are paid as much as possible and the contagion is limited.
"It's good news that the Carillion contracts for public services have got a commitment that they will be secured, whether it's schools or prisons services, that's taken care of and it's right that's the first priority".
"We don't know the contractual arrangements but we'll be pressing, given how critical it is to the West Midlands. We'll be looking for a new contractor so it continues to be built."
11.09am GMT
Construction firm Galliford Try has issued a statement.... revealing that it also faces a financial hit from Carillion's demise.
Galliford says:
The Group is in joint venture with Carillion and Balfour Beatty on the 550m Aberdeen Western Peripheral Route contract. The terms of the contract are such that the remaining joint venture members, Balfour Beatty and Galliford Try, are obliged to complete the contract.
Our current estimate of the additional cash contribution outstanding from Carillion to complete the project is 60-80 million, of which any shortfall will be funded equally between the joint venture members.
11.06am GMT
Just in: Cabinet Office minister David Lidington will give a statement to the House of Commons later today on the collapse of Carillion.
Statement confirmed on #Carillion from @DLidington today in @HouseofCommons
11.01am GMT
Simon Underwood, business recovery partner at accountancy firm, Menzies LLP, also fears that small firms employed by Carillion could now collapse.
Underwood expects Carillion's operations to keep running, probably propped up by government cash (ie, the taxpayer).
"Carillion's liquidation will have a significant impact on its many thousands of employees and on the company's supply chain, which is likely to comprise a large number of UK-based sub-contractors.....
"Given that the company has now gone into liquidation, sub-contractors and suppliers could experience financial difficulties as a direct result of Carillion's demise; potentially leading to knock-on insolvencies. If affected in this way, suppliers and sub-contractors should seek professional advice immediately.
It may be possible to ease the cashflow burden by helping them to agree 'Time to Pay' arrangements with HMRC and possibly renegotiate terms with their own suppliers, either informally, or through a rescue process like a Voluntary Arrangement."
10.55am GMT
My colleague Rob Davies is investigating how Britain's construction industry is responding to Carillion's collapse....
Carillion's major partner on the Midland Metropolitan hospital is property company Richardsons, which is refusing to answer questions and referring them to....Carillion. Which doesn't exist to all intents and purposes. Very poor.
Carillion's three major UK projects and partners.
Midland Metropolitan hospital - Richardsons (no comment)
Royal Liverpool University hospital - Pensions Infrastructure Platform (wiil provide statement soon)
Aberdeen bypass - Galliford Try (ready to take it on)
10.51am GMT
Former pensions minister Steve Webb is concerned that Carillion has been lavishing its shareholders with dividend payments, rather than tackling its pension deficit.
2016 Carillion annual report says dividend 'has increased in each of 16 years since formation of company'; Is this really acceptable alongside a pension fund deficit over half a billion pounds?
10.49am GMT
Infrastructure business Amey Group says it will take over the delivery of housing service for Britain's military.
Amey had been managing these contracts in a joint venture with Carillion, but is now taking up the job alone.
Amey has incorporated joint ventures with Carillion to deliver the Regional Prime and National Housing contracts for the Ministry of Defence (MOD), through the Defence Infrastructure Organisation (DIO). These contracts maintain the MOD estate in the UK.
The terms of the joint ventures' arrangements mean that Amey will continue the services now that Carillion has announced it is entering into immediate compulsory liquidation. Amey is committed to doing this and ensuring continuity of service to the DIO and MOD and the service men and women in the UK.
I'll also be seeking reassurance that CarillionAmey, the private contractor responsible for maintenance of armed forces accommodation including those of many service families in #Woolwich, will not be impacted by the problems affecting its parent company.
10.46am GMT
Meg Hillier, chairwoman of the influential Public Accounts Committee, fears that taxpayers face a 'raw deal' from the Carillion collapse:
Hillier says (via the Press Association):
Carillion's collapse raises grave concerns about jobs, the delivery of public services and the way Government conducts its business.
"The Public Accounts Committee has previously warned of the risks when contractors, paid from the public purse, become too big to fail.
10.36am GMT
Carillion workers face a 10% cut to their pensions, because the company's pension scheme is currently in deficit to the tune of 580m.
This pension scheme is likely to be taken over by the Pension Protection Fund. That would guarantee the pensions of those who have already retired, but would also cost current workers at least 10% of their final deal.
"Whilst the PPF provides valuable security, members who have not yet reached retirement should be prepared for a cut to their pension pay outs.
This will involve an immediate cut of 10%, plus the possible loss of some inflation proofing; higher earners may be affected by the PPF cap on payouts which currently stands at 34,655.05. An upward adjustment to the cap applies to those members with 20 or more years' service.
10.26am GMT
Newsflash: Construction firm Balfour Beatty says Carillion's collapse will cost it up to 45m.
In a statement to the City, it says:
Balfour Beatty is in Joint Venture with Carillion on three projects: the Aberdeen Western Peripheral Route, the A14 in Cambridgeshire and the M60 Junction 8 to M62 Junction 20 scheme.
Balfour Beatty will continue to work with its customers and will meet its contractual commitments.
We have put in place contingency plans for each of these projects and are working closely with clients so as to achieve continuity of service.
Following today's announcement and after a short period of transition for these contracts, we do not expect there to be an adverse financial impact on the Group arising from these joint venture contracts.
10.19am GMT
Carillion's former CEO could soon be summoned to parliament to explain what went wrong...
Chair of @CommonsPAC, Meg Hillier, says she's keen to call former Carillion CEO, Richard Howson, to answer MPs questions about why company collapsed.
10.17am GMT
Accountancy firm PwC has issued a statement, confirming that the High Court has appointed the Official Receiver as liquidator for Carillion.
Six senior PwC executives will act as 'special managers' to assist in the operation.
The Official Receiver's priority is to ensure the continuity of public services while securing the best outcome for creditors.
Unless told otherwise, all employees, agents and subcontractors are being asked to continue to work as normal and they will be paid for the work they do during the liquidations.
Unfortunately, as a result of the liquidation appointments, there is no prospect of any return to shareholders.
10.08am GMT
Carillion relies on major contracts, some of which have proved much less lucrative than it thought.
10.08am GMT
The government has set up an advice page on the Carillion crisis:
10.02am GMT
Train drivers' union ASLEF has added its voice to the chorus of calls for a public inquiry.
Mick Whelan, general secretary of ASLEF, says:
'Naturally, we are thinking of all the workers, in the public and private sectors, who have been impacted by the construction company Carillion going into administration today.
'We do wonder, though, how and why, after serial profits warnings, contracts came to be awarded to Carillion, particularly in the rail sector by Chris Grayling, and the impact this may have on the future of Crossrail and HS2.
10.00am GMT
Carillion's former boss, Richard Howson, is under fire this morning.
Howson stepped down as Carillion's CEO last July when it issued a shock profits warning. But he didn't formally leave the firm until last autumn - and is receiving 12 months pay -- a 660,000 salary and 28,000 benefits.
"We urgently need a parliamentary inquiry into some of the very questionable decisions made in the past few months, not least the award of public contracts to a company that was clearly in danger of collapse.
The issue of the former chief executive still being paid his salary, plus perks and bonus, is also a reward for failure that has to be looked into."
Remarkable that the former chief exec of Carillion has a deal to be paid for 12 months after he resigned. He stood down after Carillion issued a shock profit warning and is still being paid his 660,000 salary and 28,000 benefits.
9.43am GMT
The Federation of Small Businesses has warned that many small UK businesses could be dragged down by Carillion's failure.
FSB national chairman Mike Cherry says Carillion made its suppliers wait FOUR MONTHS before paying their bills.
"It is vital that Carillion's small business suppliers are paid what they are owed, or some of those firms could themselves be put in jeopardy, putting even more jobs at risk besides those of Carillion's own employees.
"These unpaid bills may well go back several months. I wrote to Carillion back in July last year to express concern after hearing from FSB members that the company was making small suppliers wait 120 days to be paid.
Massive knock on effects through supply chain and impact on smaller firms. If Carillion's suppliers aren't paid, they will go bust too with the loss of thousands of jobs. https://t.co/Sj3a1647hk
9.31am GMT
Carillion's demise has caused shockwaves in Westminster too.
Lord Adonis, the Labour peer who recently resigned as Theresa May's infrastructure tsar, says the government has a lot of explaining to do.
HMG has big questions to answer. Why were they awarding contracts to Carillion after the exposure of its problems in July? What contingency planning did they do for the collapse? 20,000 jobs & huge projects at stake! More Brexit-induced Whitehall paralysis & incompetence. https://t.co/dYZ4XUUWgn
CARILLION: Shades of a British Enron. Wild overbidding, fast-and-loose & grossly overpaid management, taxpayers taken for a ride, AWOL auditors & pliant/ignorant ministers and officials. This is going to run & run!
Another privatised company can't make its contracts work. In MOD for example , simply bring these contracts in house today and the same staff can carry on doing the same job, only without huge profits and overheads being skimmed off.
The risk of contagion to other private contractors or public sector contracts is big and real. This is an opportunity to close down expensive, inflexible contracts and bring them back into the public sector.
Govt so obsessed w failing handling #Brexit Ministe