Carillion collapse forces Islington firm to lay off staff
30 workers are turned away from construction sites as decorating company faces loss of £230,000
19 January, 2018 — By Samantha Booth
Decorating firm boss Kevin McLoughlin
A DECORATING firm has lost contracts worth nearly a quarter-of-a-million pounds and has had to let staff go after the collapse of construction giant Carillion.
Kevin McLoughlin received a call at 7am on Monday telling him 30 of his staff had been turned away from construction sites, including one in King’s Cross.
His business, K&M McLoughlin Decorating, joint-founded with wife Maxine, is one of thousands affected by Carillion going into liquidation on Monday.
Mr McLoughlin, 60, considers himself “lucky”, because the company can afford to meet the expected £230,000 loss out of existing profits, but he fears for smaller businesses.
“I couldn’t bear to think what would happen if we were a small business,” said Mr McLoughlin, who was born and raised in Islington.
“Because we’ve got a long history and it’s my company, we just leave the money in the business for a rainy day. That’s the first time in 30 years anything like this has happened.
“We as a business have a major amount of work. Carillion forms just a small part of it.
Inside the Brewery Road training centre
“We work in infrastructure, industrial coatings, hotels, railways. We are not exposed to any one sector. If we were a new company, we would have gone under. That’s the problem.”
Mr McLoughlin, who also offers training in decorating at the firm’s base in Brewery Road – off Caledonian Road – said eight staff lost their jobs on Monday as a direct result of the collapse.
“What wasn’t nice was the way it was done,” he said of the Carillion liquidation.
“Over the weekend we are thinking: ‘No, this is going to go’, but you’re always thinking they were going to get bailed out by the banks or the government.
“It’s like when someone is terminally ill. You are still shocked when they die.”
He had no official communication with Carillion as of Wednesday, but is hopeful the owed money could still come through the bank or by negotiating new contracts with developers.
The collapse of Carillion, one of the biggest government contractors, has caused political controversy.
In the Commons, Islington North MP and Labour leader Jeremy Corbyn accused Prime Minister Theresa May of “negligence”, calling outsourcing a “broken system”.
Ms May said that, if the government had backed out when the profit warning was issued, it would have worsened the situation.
Islington Council has no contracts with Carillion, with many of its major services, such as housing maintenance, brought in-house several years ago.
Town Hall leader Richard Watts said yesterday (Thursday) that he was not aware of other local businesses affected, but would be happy to open discussions on how the council could help.
Cllr Watts told the Tribune: “We are not in a position to finance them, but if any business wants to come and talk to us we would be very happy to come forward [to see how we can help].”
He said the council had no concerns about its contracts for other services, such as leisure centres and care.
Mr McLoughlin called for a “major overhaul” of construction procurement.
“The system doesn’t work. We’ve got skills shortages and this is the kind of culmination of under-investment, too much work for the big boys,” he said.
“To be honest, we think this is a really good business opportunity because if there’s change in the system then that means the work will go more towards us.”
Yesterday, Lloyds bank announced a £50m emergency fund for small businesses within the Carillion supply chain.
Carillion declined to comment further on the collapse.