Lloyds sets up £50m fund for Carillion’s small business victims

Lloyds Bank branchImage copyright Reuters

Lloyds Bank has said it will provide £50m to support its small business customers who are struggling following the failure of outsourcing company Carillion.

Lloyds was among the banks that stopped backing Carillion after the government refused to insure its debts.

Meanwhile, Nationwide building society has said it will take in-house jobs which were performed by Carillion.

It said it wanted to provide “reassurances” at an “unsettling” time.

Lloyds said its fund, which is now available, was for small businesses within Carillion’s supply chain that “may now be experiencing financial difficulty”.

For the “most severely impacted” customers, that could mean capital repayment holidays on loans for six months to start with, to help with cash flow problems.

Jo Harris, Lloyds managing director of business banking, said: “Small businesses don’t normally have the cash reserves that larger businesses do, so any interruption to their cashflow can have a significant impact on their ability to survive.

“By supporting our small business customers during this difficult time, we hope we can help as many businesses as possible to get back on an even keel as quickly as possible.”

‘Provide clarity’

From next Monday, 250 staff, mainly cleaners and maintenance workers, who were on the Carillion payroll will be be employed directly by Nationwide.

The lender will also take over contracts arranged by Carillion, which provide employment for another 1,500 workers.

Staff previously employed by Carillion carry out cleaning, maintenance and administrative functions for Nationwide, including in its 700 branches.

The building society said the move to take the jobs in-house would “provide clarity for those affected and ensure that services are maintained”.

Carillion also sub-contracted some of its cleaning and maintenance work for Nationwide to a number of other companies.

However, Nationwide said it would “now look to deal directly with third-party suppliers that currently support the Carillion contract”.

A spokeswoman for the company said it was “too early to say” whether Nationwide would look to outsource the jobs again in the future.

Carillion went into liquidation earlier this week, threatening thousands of jobs, about 20,000 of them in the UK.

It described itself as an “integrated support services business” and held about 450 governmental contracts, spanning the education, justice, defence and transport ministries.

Its failure means the government will have to provide funding to maintain the public services run by Carillion.

No Comments, Be The First!

Your email address will not be published.