Cabinet secretary for the economy, jobs and fair work, Keith Brown, has moved to reassure MSPs that disruption and job losses caused by Carillion’s collapse would be minimised in Scotland, though the minister stopped short of giving an opening date for the Aberdeen Western Peripheral Route (AWPR).
The UK’s second-biggest builder entered liquidation on Monday after racking up debt and pensions burdens of around £1.5 billion.
The firm formed one-third of the Aberdeen Roads Ltd (ARL) consortium leading the £745 million AWPR work alongside Balfour Beatty and Galliford Try.
In a topical question at Holyrood, Aberdeenshire East MSP Gillian Martin raised concern for jobs dependent upon the project and also the knock-on effect on smaller companies in the supply chain in the North East and throughout Scotland.
In response, Mr Brown said that support is available to any workers who may be concerned for their jobs, with help and advice to be made available to subcontractors through a designated Scottish Enterprise helpline.
Furthermore, the cabinet secretary assured parliament over the contract to deliver the AWPR scheme with the other firms involved in the consortium making clear that they will fulfil their contract obligations and had “very quickly” notified the London Stock Exchange of their intention. Mr Brown confirmed that Transport Scotland will support and work with them throughout this process.
The economy secretary said he was unable to give a “cast-iron guarantee” that jobs would not be lost as a result of the liquidation of the company, but said there was a “good chance” employees would continue to work on existing projects.
When asked about the future of Carillion employees working on the bypass, Mr Brown said: “I think it is likely that the two remaining contractors will require work to be done that was previously done by the employees of Carillion.
“I don’t want to be too definitive, but there’s around 70-plus employees, direct employees of Carillion, employed on that contract plus 190 employed on other terms, including some agency staff.
“We can’t give a cast iron guarantee on the workers but I think there is a good chance that many of those will be reemployed and for those that are not we have offered the assistance I have previously mentioned.”
On the day of Carillion’s collapse, the joint venture firms indicated that the announcement leaves a financial hole of £40-80m in the AWPR project.
Galliford Try said: “The terms of the contract are such that the remaining joint venture members, Balfour Beatty and Galliford Try, are obliged to complete the contract. Our current estimate of the additional cash contribution outstanding from Carillion to complete the project is £60-80m, of which any shortfall will be funded equally between the joint venture members. The companies will discuss the position urgently with the official receiver of Carillion and Transport Scotland, to minimise any impact on the project.”
Mr Brown had said the Scottish Government’s Partnership Action for Continuing Employment (PACE), which helps people facing redundancy, would be available for those under threat.
He said PACE would also be available if anyone should lose defence jobs.
Gillian Martin MSP said: “Our first thoughts when businesses face such serious difficulties should always be for those who may be facing uncertainty over their jobs and their future, and it was encouraging to see parliament united in support of them today.
“I am grateful to the cabinet secretary for the support being made available both to Carillion employees and to subcontractors who may have concerns at this time.
“Early confirmation from the other partners in the Aberdeen Roads consortium that they intend to press ahead and deliver the AWPR contract will be hugely reassuring for my constituents. I know people and businesses across the North East are looking forward to the opening of the much-needed £750 million new route this year, and I will be engaging with the Scottish Government and Transport Scotland going forward to ensure that remains on schedule.”
Meanwhile, the Scottish Government has set up helplines for anyone who may be affected by the failure of the construction firm.
Scottish companies affected by the Carillion insolvency can call Scottish Enterprise on 0300 013 3385 or register their details here.
The redundancy helpline operated by Skills Development Scotland is 0800 917 8000, with help also available here.
It was also announced today that banks and government were working together to mitigate the effects of Carillion’s collapse on businesses within the supply chain.