Banks take 'emergency measures' to aid Carillion sub-contractors
Banks are taking 'emergency measures' to support sub-contractors caught up in the collapse of construction and services giant Carillion.
Thousands of small and medium-sized firms that worked in the Wolverhampton-based group's supply chain are being offered overdraft extensions, so-called 'payment holidays' and waivers on fees to help them through the crisis in the short term.
The efforts are being co-ordinated by UK Finance, a new trade association set up in July last year and representing around 300 firms in the UK providing credit, banking, markets and payment-related services.
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Stephen Pegge, managing director for commercial finance at UK Finance, said: "UK banks and the Government are working closely to make sure the impact of the Carillion liquidation on SMEs (small and medium-sized enterprises) in the supply chain is understood and managed in a way that best supports those in need of assistance.
"Lenders are contacting customers and, where appropriate, are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers to ensure those facing short-term issues can be helped to stay on track."
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Also this morning Lloyds Bank announced a £50 million package of support to its small business customers, as part of a range of emergency measures for those businesses within Carillion’s supply chain which are now in financial difficulty.
The fund will be open from today and existing small business customers can apply through their usual contacts at the bank.
Gareth Oakley, managing director for SME banking, at Lloyds Bank Commercial Banking, said: “We know how critical it will be for businesses within Carillion’s supply chain to receive support with their cashflow, to help them through the temporary challenge to their business. The measures launched today will ensure these small businesses have the financial support they need to get themselves back on track.”
It followed round-table meetings held by Business Secretary Greg Clark with banks, small businesses, trade bodies and unions on Wednesday to discuss the fallout from Carillion's collapse.
The banks at the meeting included Barclays, HSBC, Lloyds, RBS, Santander, Shawbrook, Aldermore and the British Business Bank.
The aim of the meeting was to ensure small businesses exposed to the liquidation of Carillion get the support they need.
The Business Secretary also organised a meeting yesterday between the Official Receiver and leading business groups, construction trade bodies and the unions, following a request from the sector.
Greg Clark said: "It is essential that small businesses exposed to the Carillion insolvency are given the support they need by their lenders.
"I chaired a meeting this morning of high street banks to ensure that they are in contact with customers impacted, that they have in place the advice and support needed and that any individual cases are escalated and dealt with sympathetically, swiftly and appropriately.
"I will continue to meet with them in the days and weeks ahead to ensure these commitments are being acted on.
Economic Secretary to the Treasury, John Glen, added: "I am pleased to see that the UK banks are taking such a constructive approach, proactively contacting affected customers, and taking the required steps to help those facing short term issues as a result of Carillion going into liquidation.
Meanwhile the Insolvency Service has also confirmed it had contacted all of Carillion’s private sector service customers, such as those working in facilities and management, with over 90 per cent stating they wish to continue with current arrangements.
This will provide funding which enables the Official Receiver to retain the employees working on those contacts.
Separately, the Insolvency Service has confirmed that work has paused on construction sites, pending decisions as to how and if they will be restarted.
Closer to home, Carillion staff and subcontractors worried about their future are being urged to visit Citizens Advice.
The fate of the 400 people who work at the company’s headquarters on Wolverhampton Ring road – as well as contractors employed in the region – remains uncertain.
Citizens Advice says it has experts and volunteers at locations in Wolverhampton, Dudley, Sandwell and Walsall ready to provide guidance on redundancy, benefits, debt and housing to anyone who needs it.
Helen Child, chief officer at Citizens Advice Wolverhampton, said: “We know this must be a worrying time for the hundreds of Carillion workers and subcontractors in the area.
“Our staff at Citizens Advice across the Black Country are on hand to provide advice that’s independent and tailored to each person’s different situation.
“If anyone affected by the collapse of Carillion needs advice on what they should do next it’s important they head to their nearest Citizens Advice to speak to one of our experts.”
- To find your local Citizens Advice visit www.citizensadvice.org.uk
- For companies, the Black Country Chamber of Commerce – part of the Wolverhampton taskforce set up to on Monday – is operating a helpline for businesses and subcontractors affected by the Carillion collapse on 01902 912322 or email firstname.lastname@example.org.