Home news Banks create funds for firms hit by Carillion collapse

Banks create funds for firms hit by Carillion collapse

23
0

Three banks have said they will provide money to support small business customers who are struggling after the failure of Carillion.Lloyds is creating a £50m fund, while RBS is offering £75m worth of assistance and HSBC £100m.All were among the banks that stopped backing Carillion after the government refused to insure its debts. The government had asked banks for assurances that they would help firms affected by Carillion’s collapse. Meanwhile, Nationwide building society has said it will take in-house jobs which were performed by Carillion. It said it wanted to provide “reassurances” at an “unsettling” time. Business Secretary Greg Clark welcomed the “quick and positive move” by the banks, which came one day after he had a meeting with them to seek assurances that they would support small firms hit by Carillion’s liquidation. He added: “It is essential that small businesses exposed are given the support they need by their lenders, and I look forward to other banks following suit.”Carillion’s collapse may delay Birmingham’s Metro workHow do companies win government contracts?Carillion collapse raises job fearsThe banks are offering support including capital repayment holiday on loans, help with fees and increases in overdraft limits.’Provide clarity’From next Monday, 250 staff, mainly cleaners and maintenance workers, who were on the Carillion payroll will be employed directly by Nationwide.The lender will also take over contracts arranged by Carillion, which provide employment for another 1,500 workers.Staff previously employed by Carillion carry out cleaning, maintenance and administrative functions for Nationwide, including in its 700 branches.

The building society said the move to take the jobs in-house would “provide clarity for those affected and ensure that services are maintained”.Carillion also sub-contracted some of its cleaning and maintenance work for Nationwide to a number of other companies. However, Nationwide said it would “now look to deal directly with third-party suppliers that currently support the Carillion contract”. A spokeswoman for the company said it was “too early to say” whether Nationwide would look to outsource the jobs again in the future. Carillion went into liquidation earlier this week, threatening thousands of jobs, about 20,000 of them in the UK. It described itself as an “integrated support services business” and held about 450 governmental contracts, spanning the education, justice, defence and transport ministries.Its failure means the government will have to provide funding to maintain the public services run by Carillion.
Source: BBC