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Carillion insolvency - Is Your School Affected?

on Thursday, 25 January 2018.

The recent announcement that Carillion had started insolvency proceedings has received a lot of media attention. Carillion provided services to over 800 schools including school meals, cleaning and maintenance as well as large capital build projects.

The government quickly announced that it will continue to deliver all public sector services by providing the necessary funding to maintain public services. The government statement emphasised that those staff paid by Carillion working on public sector projects should continue to come to work as normal.

If you have contracts with Carillion for catering, cleaning or maintenance, we recommend using experienced insolvency professionals to review the contracts (they may provide for what is to happen on insolvency) and to set out the options available to you. We expect further announcements from the government as to what will happen to the contracts and the staff delivering the services over the next few weeks.

Where you have engaged a company within the Carillion group to carry out construction works, we recommend that you carefully review the contract documentation or seek assistance from an appropriately qualified professional. Most standard form building contracts will provide mechanisms and procedures that can be followed in the event of a parties' insolvency. Care should be taken to ensure any 'pay less notices' have been issued within the prescribed time frames. If you are midway through a building project or in the final stages of having your building handed over from Carillion we recommend you discuss your options with one of our construction team.

Carillion has also provided services in respect of a number of public private partnership (PPP) school projects which can include PFI. Private Finance Initiative (PFI) contracts can be high spend, long standing contracts for schools. Carillion's collapse may bring the end to some of these PFI contracts for schools or Carillion may simply 'fall away' from the vehicle that is delivering the project.

If you need further information about how your school may be affected by PFI contracts we recommend you discuss your options further with Doug Locke in our Commercial Law team on 0117 314 5602

The Insolvency & Restructuring team at VWV can provide the advice needed.  We specialise in all aspects of corporate insolvency and restructuring and can also draw on the expertise of a large Construction team and contracts experts.  Please contact Ambuja Bose for advice or information in our Commercial Litigation team on 020 7665 0990.

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