Recent data from the Insolvency Service has shown that there has been over 2,700 construction firms to enter insolvency in the last year, a 6% rise following Carillion’s liquidation
An insolvency expert has said that ‘shockwaves’ following the Carillion crash has led to a spike in liquidation figures.
2,764 construction firms entered insolvency in 2017/18*, jumping 6% in just a year from 2,608 in 2016/17, says Moore Stephens, the Top 10 Accountancy firm.
Since Carillion’s liquidation in January 2018, there have been detrimental knock-on effects for the whole construction supply chain surrounding what was the UK’s second biggest construction company.
Moore Stephens says that 780 construction companies fell into insolvency following Carillion’s collapse in the first quarter of 2018, up 20% from 652 in the fourth quarter of 2017.
In order to offer some guidance to companies fearing the worst, the Birmingham firm has put together a free practical workshop to inform businesses how to avoid falling into potential financial pitfalls and recognise key warning signs.
Lee Causer, Partner at Moore Stephens, said: “The collapse of Carillion sent shockwaves through the construction sector, and we are seeing more insolvencies as a direct result.
“SMEs and specialist subcontractors have been hit particularly hard by Carillion’s fall, as many of them will have relied on the giant for significant amounts of their work.
“It is also likely that these subcontractors would have had to write off virtually everything owed to them by Carillion.
“Our workshop is suitable for the whole supply chain through employer, architect, quantity surveyor, engineer, project manager, contractor, and subcontractor.
“We will discuss how to avoid disputes and make your relationships work and have a variety of experts ready to share their experience.”
The workshop has been put together by Moore Stephens and Harrison Clark Rickerbys.
Harrison Clark Rickerbys’ Partner Keith Blizzard, will speak on the construction payment cycle, while Moore Stephens’ Lee Causer and Terri Bruce will discuss sector pressures on cash flow and VAT issues respectively.
The workshop, titled ‘Keeping Construction Cash Flowing’ on October 18th is being held at The Studio, Cannon Street, between 8am and 10am.
To to attend the event, visit www.moorestephens.co.uk/events