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Carillion collapse leads to sector deal change

The publication of a report outlining the government’s £170m construction sector deal has been delayed following the collapse of Carillion, Construction News has learned.

The sector deal paper was due to be published this month but CN understands it has now been postponed, with details set to be changed to address issues brought to light following Carillion’s demise.

In November, the government revealed construction was to be one of four industries to be given a deal under the government’s industrial strategy.

The deal will see the government provide £170m in construction R&D funding, as well as setting out an agenda for the sector in terms of business models and skills.

At the time, Construction Leadership Council co-chairman Andrew Wolstenholme promised a paper with details “within weeks”.

CN understands that a draft of the report had been written for publication this month, but an official version has been held back until changes can be made in response to Carillion’s collapse.

A BEIS spokesman told CN the sector deal would be published shortly, with the department still working on its content.

He said: “The exact content of the deal is still being finalised and will reflect the current construction sector environment.”

He added: “The construction sector deal has been developed in partnership with industry, and includes commitments in relation to investment in R&D and innovation, skills and in relation to the business model of the construction sector, including payment practices.”

The collapse of Carillion has put construction’s business models and payment practices under the spotlight, with thousands of firms set to lose millions as a result of the contractor’s liquidation.

A spokesman for the Construction Leadership Council, the industry body which helped to draft the sector deal, said the collapse highlighted the unsustainable nature of the industry’s business models.

He said: “CLC believes that the sector deal is absolutely essential in helping construction firms make this transition – focusing on digital, manufacture and performance as catalysts for the changes necessary to put our industry on a more sustainable footing.

“We have also taken steps to make sure the sector deal addresses many of the procurement, payment and risk transfer issues which contribute to many of the difficulties faced by construction firms and their workforce.”

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  • 1 trillion 300 billion in debt according to constuction news...

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