Carillion suppliers will not be paid for work up to its collapse, says PwC

Officials have confirmed that Carillion’s suppliers will not be paid for work carried out up to Monday when the firm went bust.

The news comes as the thousands of subcontractors caught up in the catastrophe were warned not to take matters into their own hands and break into idle sites and recover plant and equipment.

John Wevill, head of construction at law firm Boodle Hatfield, told firms: “Don’t take the law into your hands. The only legal way to retrieve the goods is to contact the keyholder of the site and retrieve them under supervision.”

The warning comes as liquidator PwC confirmed subbies’ worst fears that they won’t be paid for work carried out for Carillion up to its collapse 48 hours ago at a meeting with industry groups at the Department for Business this morning.

I don’t think anyone will be rushing to enter these arrangements. Some are owed millions, they just may not have the resources to carry on

Rudi Klein, SEC Group

PwC was unable to confirm if invoices submitted after Carillion’s collapse would be paid but said it hoped to form so-called “special relationships” with companies to finish work on unfinished jobs.

The accountant, which is acting on behalf of the official receiver, has said it is looking for companies interested in special deals under which they continue to supply materials and work on site.

PwC has committed to paying these suppliers directly while it tries to appoint main contractors to Carillion’s former contracts. If companies do want to take up the offer, they have been advised by PwC to contact the Carillion management they normally deal with

But Rudi Klein, chief executive of Specialist Engineering Contractors’ Group, said he doubted many would find the “special relationships” attractive and added: “I don’t think anyone will be rushing to enter these arrangements. Some are owed millions, they just may not have the resources to carry on. Some sites are closed, they will have to be mobilised again. Will that cost be covered? I think they’ll be reluctant to go back.”

For those that do want to enter these relationships, Klein said they need to make sure they secure rapid payments for the work they do.

The plight of Carillion suppliers unable to access millions of pounds worth of building materials and plant on Carillion sites that have been shut since Monday was also raised at today’s meeting.

Klein said: “There are specialists who have just delivered plant to sites that is worth thousands of pounds. Total value could run into nearly quarter of a million on any one site. This is expensive kit and while it’s locked up, it can’t be used on another job.”

PwC has said there will be a process for sorting out ownership of equipment on sites but would not commit to a timeframe.

The firm said it would be updating its website today to include a list of questions and answers about the latest developments.