Small contractors hit by the liquidation of industry giant Carillion should have priority for help, the North and Western Lancashire Chamber of Commerce has said.
Its policy manager Alan Welsh said: “The collapse of Carillion raises a number of questions not least of which is the conduct of previous and current directors of Carillion, as well decisions to continue awarding major public sector contracts to an organisation in clear financial distress.
“In the short term, the government is right to step in to ensure essential public services continue and we hope that other projects can be picked up by new contractors quickly.
“Notwithstanding, our main concern is for the hundreds of small and medium sized businesses in the supply chain who have not been paid and may have to cut jobs or even close as a consequence.
“For once they should be a priority over banks and investors when it comes to liquidating the assets of the business and paying creditors.
“We would also call on HMRC and the banking sector to be lenient with any small business facing financial difficulties as a result of this collapse.”
His words have been echoed by the Federation of Master Builders.
Brian Berry, Chief Executive, said: “It’s absolutely critical that the banks give the innocent victims in Carillion’s supply chain as much leeway as possible in the short to medium term.
"We therefore welcome UK Finance’s announcement late this afternoon that lenders are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers, to ensure those facing issues relating to Carillion’s liquidation can stay on track.
"Leniency from the major banks will make all the difference to the thousands of firms in Carillion’s supply chain as to whether they survive its collapse, or follow suit.
"The construction industry is the cornerstone of the UK economy so it’s in all of our interests to do what we can to support these small companies and limit the domino effect that Carillion’s demise could have.”