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Government moves to reassure over Interserve public services
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Parliamentary Secretary of the Cabinet Office Oliver Dowden has issued reassurances over public services in relation to the difficulties being experienced by Interserve.

The outsourcing giant, which went into administration on March 15th and has already completed the sale of the Group, other than Plc, to newco Montana 1 Ltd, is a big provider of services to the public sector.

However, it was revealed that the government had handed £660m worth of public contracts to Interserve in the run-up to it going into administration.

It also, like Carillion before it, has significant suppliers of its own who will be naturally extremely concerned.

This prompted Shadow Cabinet Office Minister Christian Matheson to request a statement from government on the situation.

The Dowden statement read: “As I have said repeatedly to the House, the government are not responsible for decisions taken by companies in the private sector.

“What the government are responsible for is the continued delivery of public services, and I assure the house that has happened in this case. Schools continue to be cleaned, roads continue to be repaired and improved, and services in Government buildings continue to run as normal.”

“I reassure hon. members that nothing in Interserve’s refinancing will affect the delivery of public services. No staff have lost jobs and no pensions have been affected.”

Dowden went on to say that the government had learned lessons from the collapse of Carillion, including revision of its procurement processes.

Interserve has appointed Alan Hudson and Hunter Kelly of Ernst & Young LLP as administrators for its PLC business.

Meanwhile, experts have pointed out that the Interserve situation differs from Carillion’s in that the latter fell immediately into liquidation, with no chance of investors recovering assets. Conversely, Interserve’s administration is being viewed as relatively orderly, with creditors in full control.

Government offers advice to suppliers on Carillion crash
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The Government has offered advice to suppliers and creditors affected by Carillion’s liquidation last week.

Troubled UK facilities management and construction giant Carillion owed almost £1.3bn to banks and the end finally came on January 15th as a winding up order was made against the firm, with the court appointing the Official Receiver as the liquidator.

The company held just £29m in cash when it collapsed.

Advice on the Government’s website for customers, suppliers and sub-contractors is to call usual operational points of contact for the Carillion Group, or visit the website www.pwc.co.uk/carillion.

The site also recommends that you register as a creditor in the liquidation if you haven’t been paid for goods or services you’ve supplied to the company, and/or you have paid these companies for goods or services that you haven’t received.

Self-employed contractors and agency workers providing services to Carillion are not entitled to redundancy payments.

The company, based in Wolverhampton, employed around 20,000 people across the UK and over 40,000 globally. It is involved in a number of projects including HS2, the construction of new hospitals in Smethwick and Liverpool, maintaining 50,000 army base homes for the Ministry of Defence and providing school dinners to over 30,000 pupils a day across 218 schools.

Discussing the announcement, Carillion chairman, Philip Green, said: “This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years. Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future.

“In recent days, however, we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.”