43 Facts About Carillion

Carillion plc was a British multinational construction and facilities management services company headquartered in Wolverhampton in the United Kingdom, prior to its liquidation in January 2018.

Carillion was created in July 1999, following a demerger from Tarmac.

May 2018 report of a Parliamentary inquiry by the Business and the Work and Pensions Select Committees said Carillion's collapse was "a story of recklessness, hubris and greed, its business model was a relentless dash for cash", and accused its directors of misrepresenting the financial realities of the business.

Carillion was created in July 1999, following a demerger from Tarmac, which had been founded in 1903.

Tarmac focused on its core heavy building materials business, while Carillion included the former Tarmac Construction contracting business and the Tarmac Professional Services group of businesses.

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Under CEO John McDonough, Carillion expanded into the facilities management services sector.

Carillion Rail carried out track renewals on the rail network, and contract work for Network Rail.

Carillion announced later that day that it would no longer pursue a merger with its rival.

In 2009, Carillion was revealed as a subscriber to an illegal construction industry blacklisting body, The Consulting Association, though its inclusion on the list was mainly due to its previous ownership of Crown House Engineering, and previous use of TCA by Mowlem .

Carillion made two voluntary submissions to the House of Commons' Scottish Affairs Select Committee, one in September 2012, and another in March 2013, relating to its involvement with TCA.

In July 2014, Carillion was one of eight businesses involved in the 2014 launch of the Construction Workers Compensation Scheme, though this was condemned as a "PR stunt" by the GMB union, and described by the Scottish Affairs Select Committee as "an act of bad faith".

On 20 December, Carillion announced it had brought forward the arrival of new CEO Andrew Davies to 22 January 2018.

The Financial Times later reported Carillion had just £29m in cash when it collapsed, and would have run out of cash by 18 January 2018.

On 15 January 2018, the BBC reported Carillion was to go into liquidation, the company having issued a notice to the London Stock Exchange "that it had no choice but to take steps to enter into compulsory liquidation with immediate effect".

On 19 January, Carillion Limited was placed in provisional liquidation, and on 25 and 26 January 2018 ten further UK companies went into liquidation.

Four companies in Lagan Construction Group went into administration owing £21m in early March 2018 partly as a result of Carillion's insolvency; tightened credit terms and requests for upfront payments had affected cashflow.

In September 2019, Antrim-based electrical subcontractor Blackbourne ceased trading, making 86 staff redundant, partly due to Carillion debts incurred on the Royal Liverpool University Hospital project.

Nationwide Building Society took on around 250 former Carillion employees engaged in facilities management work at its offices and branches.

Carillion Welding was acquired by Rail Safety Solutions Ltd, saving 63 jobs.

At this date, some 140 Carillion staff were still based at the building, working for PwC; over 320 staff had either left or been made redundant.

Carillion-owned assets set for auction in July 2018 include 12 car parking spaces at Wolverhampton's Molineux Stadium, and development land in Rowley Regis and Loughborough.

In early September 2018, the NHS Trust revealed that the cost of rectifying serious faults, including replacing non-compliant cladding installed by Carillion, was holding up plans to restart and finish the £350m project; with the project further delayed, the Trust was considering invoking a break clause to terminate the PFI contract.

Lincoln eastern bypass project, originally awarded by Lincolnshire County Council to Carillion, was taken over by Galliford Try, adding £24m in costs and delaying the project's completion by six months to May 2020.

Tameside Council's 'Vision Tameside' project east of Manchester was taken over by Robertson Construction, but rising costs for this and other former Carillion projects meant 18 major investment projects were put on hold, while the council faced rising fees imposed by PwC.

Knock-on impact of Carillion's liquidation affected bank loans to supplier companies forced into administration: for example, Vaughan collapsed owing £2.

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At Prime Minister's Questions on 17 January 2018, Labour leader Jeremy Corbyn challenged Prime Minister Theresa May over Carillion, asking why over £2bn of contracts had been awarded to Carillion even after the company had issued three profit warnings.

Pensions advisers were said to have repeatedly warned that Carillion was prioritising shareholder dividends over the funding of its pension scheme.

In 6 February hearings, Carillion directors blamed the company's collapse on problem contracts, high levels of debt arising from the 2011 acquisition of Eaga, plus Brexit, the 2017 General Election and interest rates.

Carillion claimed it was owed £200m in relation to the Msheireb Downtown Doha project in Qatar – former CEO Richard Howson said he felt like "a bailiff" in chasing the debt.

On 22 February 2018, the Pensions Regulator told a joint select committees hearing that it was considering pursuing individuals connected with Carillion to recover cash for its indebted pension schemes, but was criticised for not forcing Carillion to pay sufficient money into its retirement schemes.

Two days before 16 May 2018 publication of the parliamentary inquiry report, Frank Field said Carillion had "displayed utter contempt for its suppliers", using them to "prop up a failing business model" and conceal true levels of debt.

Collapse of Carillion and related implications were investigated by multiple Parliamentary select committees.

Carillion's rise and spectacular fall was a story of recklessness, hubris and greed.

Carillion had been downgraded to red following its July 2017 profit warning; when officials recommended a provisional black rating in November 2017, Carillion bosses persuaded them not to.

In June 2018, the National Audit Office published its investigation into the collapse of Carillion, criticising the government for not spotting financial problems at a key supplier sooner.

Field said Carillion had "hoodwinked" the government and viewed PwC's involvement in managing the liquidation as a potential conflict of interest.

In June 2018, it was reported that KPMG and Carillion bosses had maintained a £329m valuation of goodwill relating to the former Eaga business, despite huge losses.

Carillion warned that Carillion's collapse could be the first of several if the industry did not overhaul itself.

Carillion provided facilities management services, provided architectural and engineering design and project management services, and undertook a range of construction projects in sectors including: aviation; central government; commercial, retail, residential and leisure; corporate; defence; education; financial services; healthcare, local government; oil and gas; and transport.

Carillion comprised 326 subsidiary companies, joint ventures and holding companies, 199 in the United Kingdom, plus others in Canada and other countries.

Sarah Albon, chief executive of the Insolvency Service told MPs on 30 January 2018 that Carillion had 169 directors in total but poor Carillion record keeping had made determining that number difficult.

In March 2015 Carillion moved its head office from Birch Street in Wolverhampton to the former Staffordshire Building Society offices in Wolverhampton.

The Health and Safety Executive said that Carillion had failed to put up signs to warn motorists of a road closure in good time.