UK taxpayers have handed out £50m in redundancy payments to Carillion workers, and the total bill will be £65m, a union has learned.
Construction union Unite made a Freedom of Information request to the Insolvency Service, which revealed that the Redundancy Payments Office (RPO) has already made substantial payments, and will pay more.
The revelation contradicts ministers’ assurances that taxpayers would not foot the bill for Carillion’s collapse in January.
"Taxpayers should not, and will not, bail out a private sector company for private sector losses or allow rewards for failure," cabinet office minister David Lidington told Parliament after the collapse.
Taxpayers will also have to foot much of accountancy firm PwC’s £50m bill for dismantling Carillion, Unite said.
"While the directors and senior executives of Carillion have largely slithered off into lucrative new roles it is the taxpayers who have been left to pick up the pieces from their mess," said Unite assistant general secretary Gail Cartmail.
In response to Unite’s request, the RPO said: "the total amount we may pay out is approximately £65 million of which £50 million has been paid so far based on actual claims received."
The government must order a full public inquiry into Carillion’s collapse to not only understand who was responsible for the greatest corporate failure in UK history but also the total cost to the taxpayer– Gail Cartmail, Unite
This figure is solely for former staff of the company and does not include workers who lost their jobs when companies in Carillion’s supply chain also hit the wall.
Accountancy firm PwC, which was engaged by the Insolvency Service to break up Carillion and transfer its outsourcing contracts, is expected to have earned around £50m from the company’s collapse, Unite added, noting that since Carillion had only £29m in the bank when it crashed, much of that bill will be picked up by the taxpayer.
Also due from the public purse is the tab for completing several of Carillion’s projects, including the Midlands Metropolitan Hospital and, possibly, the Royal Liverpool University Hospital.
Unite says the cost of finishing these projects will be more than £100m.
"These latest figures demonstrate that the taxpayers have had to pick up the tab for the greed and recklessness which led to Carillion’s collapse," said Gail Cartmail, adding that they "underline why the government must order a full public inquiry into Carillion’s collapse to not only understand who was responsible for the greatest corporate failure in UK history but also the total cost to the taxpayer."
She concluded: "Additionally the police need to undertake an immediate criminal investigation into those responsible for Carillion’s collapse. If no laws were broken then we need better stronger laws to prosecute the guilty."
Image: The revelation contradicts ministers’ assurances that taxpayers would not foot the bill for Carillion’s collapse in January (Carillion)
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