What does the Carillion collapse mean for the UK public sector?

It’s been a talking point since the announcement earlier this month, and naturally, many people have been left wondering what the Carillion collapse means for those involved with the business. At David Bailey Furniture Systems, we’ve watched with concern as many of the industries we’ve operated in since our formation have waited to hear how the collapse will affect their prospects.

One such area is the healthcare sector, as the construction company has been responsible for a large number of hospital projects over the years. It isn’t just building projects that have been affected by the Carillion collapse, as the company was also responsible for many estate and facilities management contracts which include a number of services such as cleaning, catering and general building maintenance.

The NHS won’t necessarily be the hardest hit by the firm’s demise though, as the Government has confirmed that current construction contracts for two of the affected hospitals, The Royal Liverpool Hospital and The Midland Metropolitan Hospital will remain ongoing for now. Future plans for the NHS and healthcare sector affected by the Carillion collapse remain unclear however, with both politicians and The British Medical Association pressuring decision makers for a solution.

The healthcare sector isn’t the only public sector to have felt the repercussions of the Carillion collapse. The construction giant going in to liquidation will also be concerning news for the UK’s schools, as hundreds relied on the firm for a number of services including providing school dinners and caretaking services.

Despite being concerning news for some, it was reported earlier this week that one Manchester based school had a lucky escape, cutting ties with the doomed firm just days before the liquidation announcement came. The Discovery Academy in Hattersley’s Executive Head Teacher Karen Burns took heed of profit warnings and decided to sever the school’s association with the company just in the nick of time, finishing their sponsorship contract within days of the announcement. While she believes this was a good move for the establishment, she also sympathised with Carillion’s 43,000 employees and recognised that the school still has catering and cleaning contracts with the firm, as do many others.

So what does the collapse of the firm mean for the number of educational environments across the country that rely on them to deliver vital school services? The UK Government has confirmed that the services delivered to schools will continue, however, it has been reported such is the concern that one county (Oxfordshire) has the fire service on standby to assist with meal serving.

Claims from Carillion’s website state that the company delivers over 32,000 school meals each and every day, and provides facilities management services to 875 schools, plus other services such as electrical support. The UK Government claims that the firm has 250 schools in direct contracts with the company and have confirmed that all public sector services will continue to be provided.

Naturally, one of the main concerns for all is that of the potential job losses for those working in jobs that are directly affected by the firm going under. There are also currently calls from the education sector for reassurances that jobs, employee pensions and wages are safe. Many staff across the country have also become concerned that already strained resources could be further impacted by the news.

While the ramifications of the Carillion collapse continue to be felt, many will be left wondering what lessons we can learn from the loss of such a prevalent firm in the construction industry. In the meantime, if you or your business has been affected by the issue, you can find useful information here.