Carillion should not be bailed out, says Nottingham campaign group

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A campaign group says there should be no public bail-out of construction group Carillion, which is struggling since reporting half-year losses of £1.15bn.

The company has contracts in the rail industry, education sector, health service and more.

It used to run the cleaning services at Nottingham's hospitals, until the job was taken back in-house when serious concerns were raised about hygiene standards at both the City Hospital and QMC.

Cleanliness standards have since improved at the hospitals.

But Carillion still manages parking enforcement at the two sites.

The company has met with lenders to discuss options to reduce its debts, recapitalise and/or restructure the group's balance sheet.

It has been suggested that the company should benefit from a Government bail-out to avoid major public sector projects being plunged into chaos.

But Mike Scott from the Nottingham and Nottinghamshire Keep Our NHS Public (KONP) group said: "The KONP campaign to ditch Carillion succeeded just in time to prevent the total collapse of support services at the QMC and City Hospitals, with catastrophic consequences for patients and staff. Now other parts of the public sector are in the same state.

"No private company can be ‘too big to fail’. Carillion have got themselves into this position and there is absolutely no reason why Teresa May should be throwing good money after bad.

"They should be allowed to collapse and all public sector contracts be taken back in-house."

A Government spokeswoman said: "Carillion is a major supplier to the Government, with a number of long-term contracts. We are committed to maintaining a healthy supplier market and work closely with our key suppliers.

"The company has kept us informed of the steps it is taking to restructure the business.

"We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress."

Carillion manages 50,000 homes for the Ministry of Defence, provides school and hospital meals, cleans prisons and runs Department of Transport and Network Rail road and rail contracts.

The company said last month that it was "continuing constructive discussions with stakeholders regarding its options to reduce net debt and recapitalise and/or restructure the Group’s balance sheet."

It added: "These discussions are progressing well, and the Board still expects to determine the approach and to commence steps to implement the chosen option during the first quarter of 2018."