Friday 23 March 2018 2:36 pm

Carillion collapse puts hundreds of jobs at risk as first major supply-chain firm faces administration

Hundreds of jobs have been put at risk after a Carillion supplier today prepared to call in administrators.

Vaughan Engineering, a family-owned company founded in 1955, is set to be Carillion's first major supply chain casualty.

Some 160 staff across Vaughan's Edinburgh, Warrington and Newcastle offices are facing redundancy. The firm employs around 500 people in total across the UK, many of whom work from Vaughan's Northern Ireland base.

Carillion collapsed in mid-January under the weight of mammoth debts. Britain's second-largest contractor fell into liquidation, which is being managed by the government's Official Receiver in conjunction with special manager PwC.

While many smaller suppliers have been taken to the brink, Vaughan's plight is understood to be the first large supplier facing a formal insolvency process.

Vaughan was owed £600,000 by Carillion with a further £1.1m of future work in the pipeline for the first three months of 2018 alone. The company has continued to pay its staff for the Carillion jobs despite the fact workers have had to down-tools in the wake of the contractor's demise.

There have been no payments from those handling Carillion's liquidation, the company said.

Finance director Gavin Vaughan said the firm's predicament was a "devastating blow".

"We have three sites in England and Scotland, employing 160 people and paying more than £6m annually in salaries and hundreds of thousands more in rates and to our many suppliers. I think sadly it is inevitable that several of those suppliers and their employees will also be seriously impacted.

“We have tried everything we can to save our business, despite approaches to Scottish Enterprise, the Scottish Government, MPs, local and national government authorities, no assistance has been forthcoming."

Vaughan said it had been forced into a situation where it would be responsible for several years of warranties and maintenance for installations the company has not been paid for. He added:

It is especially painful for all of us involved in this to know that none of it is our fault.

Vaughan's Northern Ireland operations are separate and not reliant on Carillion contracts to continue, with no imminent threat to jobs.