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Sunday 16 December 2018

Carillion apprentices face having pay stopped in next few days

Carillion apprentices will not be paid from later this week in a fresh twist to the crisis caused by the construction firm’s collapse.

Carillion crisis
Carillion crisis

By Alan Jones and Ravender Sembhy, Press Association

Unions have attacked news that apprentices caught up in the collapse of construction giant Carillion will not be paid from later this week.

Skills minister Anne Milton said that affected apprentices would only be paid by the receiver until the end of January.

A written answer to shadow education secretary Angela Rayner said that the Construction Industry Training Board was “utilising their existing employer contracts” and grant incentives to secure employers for apprentices.

“Once alternative employment has been secured, it will be the responsibility of these individual employers to determine the frequency of payments to their apprentices,” said the minister.

Rehana Azam, national officer of the GMB union, said: “Once again the Government’s response to the Carillion crisis is inadequate and inept.

“These are young people starting out in their careers and they have no idea if they will have apprenticeships this time next week.

“It’s simply not good enough – the Government has a duty of care to these people.

“They should give a guarantee these people gain the skills to become Britain’s future workforce.

“We were told every Carillion apprentice would be contacted. The evidence suggests that is not the case.”

Meanwhile, it was announced that the accountancy watchdog is to open an investigation into accountancy giant KPMG over its audits of Carillion.

The Financial Reporting Council (FRC) said that following inquiries made since Carilion’s profit warning in July, it would open an investigation under the Audit Enforcement Procedure.

The probe will cover the years ended 2014, 2015 and 2016, and additional audit work carried out during 2017.

The investigation will be conducted by the FRC’s Enforcement Division and will consider whether the auditor has breached any relevant requirements, in particular the “ethical and technical standards” for auditors.

KPMG’s audit of the company’s use and disclosure of the going concern basis of accounting, estimates and recognition of revenue on significant contracts and accounting for pensions will all come under the FRC’s microscope.

The FRC also pledged to conduct the investigation “as quickly and thoroughly as possible”.

“The FRC is progressing with urgent inquiries into the conduct of professional accountants within Carillion in connection with the preparation of the financial statements and other financial reporting obligations under the Accountancy Scheme.

“The FRC is liaising closely with the Official Receiver, the Financial Conduct Authority, the Insolvency Service and The Pensions Regulator to ensure that there is a joined-up approach to the investigation of all matters arising from the collapse of Carillion,” the FRC said.

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File photo dated 08/12/14 of Labour MP Frank Field, chairman of the Work and Pensions Committee. (Anthony Devlin/PA)

It comes as Carillion was accused of trying to “wriggle out” of its obligations to pensioners while paying out tens of millions in dividends for shareholders and “handsome pay packets” for bosses.

The Commons Work and Pensions Committee criticised the collapsed outsourcing giant after publishing a letter from Robin Ellison, chairman of trustees of Carillion’s pension scheme, which gives an account of the firm’s pension scheme.

Carillion’s liquidation left in its wake a £900 million debt pile, a £590 million pension deficit reported by the firm, and hundreds of millions of pounds in unfinished public contracts.

Ms Rayner said:  “This simply isn’t good enough. Ministers had promised that these apprentices were being taken back in-house and that they were doing everything to keep them in training, but now they admit that they could stop being paid within a week.

“On their watch, Carillion was handed millions of pounds of public money and allowed to become the country’s biggest provider of construction apprenticeships. They cannot now just stand by and allow thousands of apprentices who have done nothing but work hard for their qualifications to be abandoned, without pay, work or continued training.

“Only months after the collapse of LearnDirect highlighted the risks of over-reliance on private companies for the provision of adult training, it’s high time the Tory Government started learning the lessons of their previous failures.”

A Department for Education spokesman said: “We have taken steps to protect learners by transferring the training of all Carillion apprentices to the Construction Industry Training Board.

“CITB has already secured new employment, with wages, for over half of the apprentices and is working around the clock to find alternative employers for the others.”

Press Association

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