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Doubts over Carillion’s early payment scheme

The construction giant Carillion has gone into liquidation, leaving doubts for over more than 20,000 jobs in the UK and real concerns for their suppliers that includes print firms, stationers and sign-makers.

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Carillion have gone into liquidation with concerns over the future of their suppliers

Although many in industry believe most of the firm will be saved through being re-floated, refinanced, nationalised or bought out in some form of rescue plan, there are concerns over whether the thousands of suppliers, self-employed workers and sub-contractors will get paid.

ICSM Credit’s Ian Carrott comments: “When these large concerns go into liquidation the secured creditors will mostly be paid but the little man, the small business and the paper supplier could lose thousands of pounds in unpaid invoices. We’ve seen this in the printing and sign industry last year with many people being left with nothing.”

 The small business and the paper supplier could lose thousands of pounds in unpaid invoices

Carillion draws attention to their adherence to their Early Payment Facility (EPF) on their website, an initiative introduced in 2012 for suppliers in support of the Government’s Supply Chain Finance Initiative. At the time of the announcement the Prime Minister David Cameron said: “I praise the commitment made by these businesses today and the wider support they provide for their supply chains. In the current climate, viable business can struggle to get the finance they need to grow – this scheme will not only help them secure finance and support cash flow, but will help secure supply chains for some of our biggest companies and protect thousands of jobs.”

The idea was for Carillion to pay suppliers on time or early, although some agreements meant some suppliers had to wait up to 130 days for payment. However now the firm is in liquidation there are doubts about how suppliers will be paid.



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