Taxpayer facing bill of ‘hundreds of millions’ after Carillion collapse
2 min read
The Government will reportedly be forced to fork out ‘hundreds of millions of pounds’ on the back of the collapse of Carillion after an earlier promise to save public sector jobs.
The firm - which was awarded around 450 government contracts worth billions - went bust yesterday after failing to secure emergency cash from its lenders.
The Times reports that the major loan expected to be handed to Carillion’s official receiver will likely run into the ‘hundreds of billions’ with a ‘precise figure’ to be announced next month.
According to the paper, the government is confident of recouping some of the money it lends as it is first in line to benefit from company assets being divided up after the liquidation.
However the amount repaid “depends where the bodies are buried”, a government source told them.
The claim comes after Cabinet Office minister David Lidington said the official receiver appointed to deal with the liquidation had the power to impose "severe penalties" if misconduct is identified.
He also told the Commons yesterday that any loan was not a “bailout” because Carillion’s shareholders and lenders would bear the “brunt of the losses”.
A spokesman for Theresa May yesterday insisted there was no prospect of taxpayers bailing out Carillion, and that the public services carried out by the company in the transport, health, education and prison sectors would not be affected by its collapse.
He said: "We remained hopeful that a solution could be found while putting robust contingency plans in place to prepare for every eventuality.
“Our primary responsibility has always been to keep our essential public services running safely."
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