17/01/2018 14:29 GMT

Bonus Payments To Carillion Directors Stopped, Says Insolvency Service

Jeremy Corbyn and Theresa May spar over failed firm at PMQs.

PA Wire/PA Images

Bonus payments to Carillion directors – including severance payments to former executives – have been stopped after the date of liquidation.

On Wednesday afternoon spokesman for the Insolvency Service said: “Any bonus payment to directors, beyond the liquidation date, have been stopped and this includes the severance payments which were being paid to some senior executives who left the company.”

Earlier today it was announced workers on the majority of private sector contracts held by failed construction company will continue to be paid.

The Insolvency Service said 90% of the company’s private customers have indicated they want it to carry on providing services until new suppliers can be found and will provide funding to keep employees on.

The announcement came as a 48-hour period of support for firms working on Carillion’s private sector contracts approached its end, with thousands of workers uncertain about their future.

The company’s interim chief executive has revealed that Carillion had just £29 million in cash by the time it went bust, at a time when it was struggling under £900 million of debt and a £587 million pension deficit.

The fate of Carillion also dominated the exchanges at Prime Minister’s Questions today.

Jeremy Corbyn called for private firms to be “shown the door” by the Government as he accused Theresa May of “negligence” over the collapse of the construction giant.

May said a third of government contracts with Carillion were let by the previous Labour administration, adding she wants to provide “good quality public services, delivered at best value to the taxpayer”.

Outsourcing and construction giant Carillion - which employs 20,000 British people - issued its third profits warning last year.

It has public sector or public/private partnership contracts worth a staggering £1.7bn and ministers were so worried about the implications an emergency COBRA meeting was called on Monday so they could discuss the crisis.

The group’s massive portfolio included providing school dinners, cleaning and catering at NHS hospitals, building HS2 and maintaining 50,000 army base homes for the Ministry of Defence, but it had been struggling under £900m of debt and a £587m pension deficit.