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Carillion owes £75m to 80 engineers

Small firms are owed millions by Carillion they are unlikely to recoup, according to two major supply chain trade bodies.

The Building Engineering Services Association (BESA) and the Electrical Contractors’ Association (ECA) collaborated on a survey of their memberships, which found the failed contractor owed around £75m to 80 engineering services companies.

The BESA said it believed total losses were likely to “be far higher” than this figure, given there were thousands of companies operating in the sector.

Among the companies surveyed, the total value of ongoing contracts with Carillion which were now at risk stood at £47.2m.

Micro-businesses – those with less than 10 employees – were owed £98,000 on average, according to the survey. One company revealed it was owed more than £250,000.

Small firms of between 10 and 49 employees were owed an average of £141,000, with one firm reporting that Carillion owed it £800,000.

Medium-sized businesses with 50-249 employees were found to be owed an average of £236,000, with the largest debt in this category totalling £1.4m.

The two trade bodies said they had met with special managers PwC and the government about these debts.

PwC informed BESA and ECA that money owed for private sector work carried out prior to the liquidation date would not be paid.

Subcontractors owed money by Carillion will be treated as ‘unsecured creditors’, a term used to describe those with no assets secured against their debt.

The status of unsecured creditor places these companies second from bottom in the pecking order when it comes to receiving repayment as part of the liquidation process. 

BESA president Tim Hopkinson said: “We knew the fallout from this seismic episode would be extremely serious, but these figures give us a clearer picture of just how hard our sector is going to hit in terms of the thousands of pounds of unsecured debt that will be lost by ordinary hardworking small businesses, jeopardising their future and the future of their staff.”

A survey by rail workers union the RMT survey found 88 per cent of its members had not been contacted by liquidator following the firm’s collapse.

On Monday, Kier revealed it had taken on approximately 200 Carillion staff on HS2 and Highways England joint ventures.

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