1. ITV Report

Carillion crisis: Government holds last-ditch rescue talks with company bosses

Carillion was awarded two Network Rail contracts in November 2017. Credit: PA

The government is holding high level talks with Carillion bosses to discuss a long-term rescue package for the construction giant as it teeters on the brink of collapse.

The weekend-long talks come as unions warned that thousands of jobs and workers' pensions were in danger of being "dragged under" by another bout of "reckless corporate irresponsibility".

The firm has debts of £1.15 billion and a pension shortfall of over half a billion and it's believed the company, which employs 20,000 workers in the UK, could go under in days.

Unite have called for an inquiry into the crisis, while Labour will question ministers about the crisis in the Commons this week.

Questions are being asked of transport secretary Chris Grayling who awarded huge contracts to a company despite already knowing the firm was in serious financial trouble.

  • ITV News Business Editor Joel Hills explains the Carillion crisis and the options available to the government:

Carillion is a key supplier to the government and has contracts in the rail industry, education and NHS. Carillion bosses have met lenders to discuss options to reduce debts, recapitalise and/or restructure the group's balance sheet.

Administrators could be called in within days unless shareholders, creditors or the government agree to stump up funds, it is believed. Banks headed by HSBC, Barclays and Santander, have yet to agree on a restructuring plan and are understood to be reluctant to pour in new funding unless the government is involved in a bailout.

Jim Kennedy, Unite's national officer for local government, said: "Public services, vast amounts of public money, thousands of jobs, including in a lengthy supply chain of insecure agency workers who are also at risk, and workers' hard-saved pensions are all in danger of being dragged under by yet another bout of reckless corporate irresponsibility.

"There are also serious questions that need to be asked and answered about Carillion's conduct.

TUC deputy general secretary Paul Nowak said: "Tens of thousands of jobs are now at risk, along with vital public services and major infrastructure projects across the country.

"Workers, taxpayers and public service users could well be left to carry the can.

"The government needs to step in, guarantee jobs and services, and explain how they let this mess happen in the first place."

Tory party chairman Brandon Lewis told BBC1's The Andrew Marr Show: "It is a going concern, it's a very commercially sensitive situation so I wouldn't comment further than to say it is a going concern.

"I would hope to see that the working capital they need will be there, working with their partners.

"But of course ministers and my colleague the Secretary of State at Business is keeping a very close eye on it."

Shadow transport secretary Andy McDonald said: "Failed contract awards to Stagecoach/Virgin on east coast and Carillion on HS2 demonstrate an appalling lack of judgement from the Secretary of State for Transport and an inability to protect the taxpayer interest. "Only Labour will deliver public procurement which protects the public."