Carillion entering liquidation: Considerations for organisations with PFI contracts


Sharon Renouf

Sharon Renouf


Following the news of Carillion's liquidation this morning, public sector organisations whose projects involve Carillion as service provider will be keen to obtain comfort from their Project Co about service continuity and the related cost.

While there is an expectation that the public sector will continue to pay for services and staff, how will these services be delivered, in practice?  The majority of contracts, especially PFI will have "step-in" or "self-help" provisions which may need to be invoked.  If there is a non-Carillion owned Project Co, has or will it agree to meet the cost of any public sector step-in. 

We are already advising several NHS Trusts in ensuring that their arrangements on the ground are backed by contractual agreements from their private partners to meet costs and make alternative arrangements as soon as possible.

For those public organisations with outsourced contracts awarded directly to Carillion the contracts are likely to include termination grounds for insolvency but may be light on the practical and operational consequences and potential liabilities that may be incurred.  Consideration will need to be given to staff, pension issues including any deficits, assets, data, systems, subcontracts and many other issues. Whilst services will need to continue public bodies need to be conscious of possible liabilities that may be incurred and be ever mindful of their duties and procurement rules.

HM Government have offered this advice.

As one of the leading advisors to public sector organisations regarding the management of PFI contracts and suppliers, we can provide all the legal advice and reassurance you may need.   Contact our PFI team for more information.

Related Insights

Employment Status Update

by Sarah Lamont

Authority Update 8/6/18

by Claire Booth

HSE and CQC Prosecutions for Health and Safety: Guidance for Public...

by Hannah Taylor

The Health and Safety Executive (the "HSE") is responsible for the regulation and enforcement of workplace health and safety. The...

Introduction to CTO Recall: Part 2

by Clementine Robertshaw

My previous article "Introduction to CTO Recall: Part 1" covered the basic process and procedure of recall from a Community...

Reducing the Number of Compulsory Admissions: Positive Changes for...

by Alice O'Donoghue

In May 2017, Theresa May suggested that, if elected, she would consider replacing the Mental Health Act 1983 ("MHA") “in its...

Surrogacy, Adoption, and Information Governance

by Julia Jones

There are a number of patients for whom their clinical records need special consideration, including those who have had, or are...

Waste Watch - April / May 2018

by Nadeem Arshad

Authority Update 25/5/18

by Claire Booth

This update contains brief details of recent Government publications, legislation, cases and other developments relevant to those...

Keep up to date With Bevan Brittan

What interests you?

About you?

You can view our privacy policy here