UK taxpayers are set to pay £65m to former Carillion workers who were left out of pocket and work following the collapse of the former industry giant Carillion, with that figure possibly set to skyrocket to £100m once incomplete projects are accounted for.
This is according to the Unite union which made a Freedom of Information request to the Insolvency Service which revealed that the Redundancy Payments Office (RPO) has already paid out £50m with that figure expected to rise to £65m.
The substantial amount does not even cover those who lost their jobs when companies in Carillion’s supply chain also folded due to the masses amounts of money owed.
As Carillion collapsed into compulsory liquidation, rather than enter a managed form of administration, the vast majority of the company’s 19,000 staff had to be made redundant and were then entitled to make a claim for redundancy, from the RPO.
The UK’s construction union say the latest discovery demonstrates initial government claims that Carillion’s collapse would not impact the taxpayer were “decidedly wide of the mark”.
Unite assistant general secretary Gail Cartmail who revealed the cost to the taxpayer during her speech at Labour party conference on Monday (24 September) said: “These latest figures demonstrate that the taxpayers have had to pick up the tab for the greed and recklessness which led to Carillion’s collapse. While the directors and senior executives of Carillion have largely slithered off into lucrative new roles, it is the taxpayers who have been left to pick up the pieces from their mess.”
A further blow to taxpayers are the claims that accountancy firm PwC, which was engaged by the Insolvency Service to break up Carillion and transfer its outsourcing contracts to new providers are expected to have earned around £50m from the company’s collapse. As Carillion had just £29m left in the bank when it met its demise, much of PwC’s bill will be picked up by the taxpayer, according to Unite.
The union now wants full a public inquiry into the firm’s collapse and for the police to review whether any laws were broken and if people need to be prosecuted for their actions.
“These revelations further underline why the government must order a full public inquiry into Carillion’s collapse to not only understand who was responsible for the greatest corporate failure in UK history but also the total cost to the taxpayer,” Cartmail added. “Additionally, the police need to undertake an immediate criminal investigation into those responsible for Carillion’s collapse. If no laws were broken then we need better, stronger laws to prosecute the guilty.”