Carillion collapse – suppliers
count the cost
16th January 2018

While businesses across the UK are reeling at yesterday’s news of the collapse of Carillion, many are fearing the inevitable effect that many creditors, may themselves be pushed over the edge by the knock-on from its debts.

The fear was summed up by, among others, Mike Cherry, national chairman of the federation of Small Businesses, who said many of the giant’s smaller suppliers could be put in jeopardy if they were not paid what they owed:

He said he had expressed his concern to the company six months ago after FSB members had been told they wold have to wait 120 days to be paid, and added: “Sadly these kind of poor payment practices are all too common among some big corporates. Perhaps if they weren’t, it would be easier to spot the warning signs of a huge company in financial trouble.

“When the dust settles on this sorry saga, there is also a wider lesson to learn about the concentration of public contracts in the hands of a small number of very big businesses. Public procurement must be much more small-business friendly, in which it is easier for small firms to navigate the system and the Government should prioritise meeting its target of at least one third of taxpayer-funded contracts going to smaller firms.”

See also this week’s letters.