FSB National Chairman, Mike Cherry, said: “Sadly this sorry saga has laid bare the danger of having the fate of huge supply chains resting on the financial health of a few large companies, and especially in a sector of the economy riddled with poor payment practice.
“Countless small businesses working for Carillion have not been paid for months and are facing the prospect that they will not receive a penny for their hard work, products or services.
“It is unacceptable that the future of these businesses, and the jobs they provide, have been put in jeopardy by the reckless and irresponsible behaviour of one company. The government must take action now to ensure that this cannot happen again.
“Introducing protected project bank accounts, for all public projects, would ensure that money for work carried out would still be paid to those who have put in the hours and delivered on what they’ve been asked to do. It would also help stop the awful payment practices deployed by big businesses that squeeze smaller firms and put them risk.
“Carillion’s collapse is a watershed moment that cannot be ignored. Small businesses need to be given the confidence that a catastrophe of this scale cannot happen again. Otherwise, the post-Carillion legacy could be a public sector procurement programme that is small-business-free, further increasing costs and risks to the taxpayer.”
