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UK taxpayer stuck with £148m bill after Carillion collapse
The UK taxpayer has been stuck with a bill of at least £148m courtesy of government contractor Carillion after its spectacular collapse in January with debts of £1.5bn, the National Audit Office (NAO) said on Thursday.
In a report, the NAO said the actual cost would be higher "because some public sector bodies are paying a 20% premium for post-liquidation services and some customers will incur costs in replacing Carillion as a contractor".
"The total cost to the taxpayer will be higher than this Many public sector customers, including the special purpose vehicles delivering PFI contracts, are objecting to paying this, and many dispute outstanding invoices relating to the period before liquidation."
The NAO said there would be further costs to the wide economy and hits for companies in Carillion's supply chain.
At the point of liquidation Carillion had around 420 contracts with the UK public sector including direct contracts, sub-contracts and special purpose vehicles to deliver private finance schemes. These included services for hospitals, schools, the armed forces, prisons and transport.
This £148 million would be covered by the £150 million the Cabinet Office has already provided to help finance the costs of liquidation.
The £148 million is lower than the rough estimate made by the Cabinet Office before liquidation of £314 million to £374 million
Since then, nearly two-thirds of its UK workforce have found new jobs.
The NAO said 11,638 Carillion workers in the UK, about 64% of the total, were now employed elsewhere. Of the rest, 2,332 - 13% of the total - had been made redundant and the remaining 3,000 were still employed by Carillion.