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← Carillion in the failures register

Lessons learned report

Carillion: how a construction giant collapsed, and 12 checks to protect your business

On 15 January 2018, Carillion collapsed. It owed around £2 billion to about 30,000 suppliers, subcontractors and other creditors. One early warning sign came almost five years before: its 120-day payment terms. This report tells the story in plain English. It also gives you 12 checks to make before you work for a main contractor.

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The numbers

Owed to suppliers and subcontractors
About £2bn

Carillion owed around £2 billion to its 30,000 suppliers, subcontractors and other short-term creditors, and the Parliamentary committees said they would get little back from the liquidation.

Source: House of Commons BEIS and Work and Pensions Committees, Carillion (HC 769), 16 May 2018, January 2018 (at liquidation)

Standard payment terms
120 days

Carillion's standard payment terms to suppliers were 120 days; suppliers could be paid after 45 days only by selling their invoices at a discount to Carillion's bank through its early payment facility.

Source: House of Commons BEIS and Work and Pensions Committees, Carillion (HC 769), 16 May 2018, From 2013 until the collapse in January 2018

First profit warning to liquidation
About 6 months

Carillion announced an £845 million write-down on its contracts on 10 July 2017 and entered compulsory liquidation on 15 January 2018.

Source: House of Commons BEIS and Work and Pensions Committees, Carillion (HC 769), 16 May 2018, 10 July 2017 to 15 January 2018

Liabilities against cash at collapse
Nearly £7bn vs £29m

Carillion went into liquidation with liabilities of nearly £7 billion and just £29 million in cash.

Source: House of Commons BEIS and Work and Pensions Committees, Carillion (HC 769), 16 May 2018, 15 January 2018

More figures are in the full report.

What's inside

  • •How Carillion grew into the UK's second largest construction company
  • •The six months from first profit warning to liquidation, date by date
  • •The causes the official investigations found
  • •The warning signs, when each became visible, and whether a subcontractor could have seen it
  • •What happened to the subcontractors and suppliers who were owed money
  • •The fines, director bans and payment rule changes that followed
  • •The 12 checks to make before you work for a main contractor

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Sources

  1. Carillion: Second Joint report from the Business, Energy and Industrial Strategy and Work and Pensions Committees (HC 769), House of Commons, 2018-05-16
  2. Investigation into the government's handling of the collapse of Carillion (HC 1002), full report PDF, National Audit Office, 2018-06-07
  3. Investigation into the government's handling of the collapse of Carillion, report page, National Audit Office, 2018-06-07
  4. Annual Report and Accounts 2016 (archived copy), Carillion plc, 2017-03-01
  5. Government protects essential public services as Carillion declares insolvency, Cabinet Office, GOV.UK, 2018-01-15
  6. Carillion declares insolvency: information for employees, creditors and suppliers, Insolvency Service and DWP, GOV.UK, 2018-01-15
  7. Carillion: information for employees, sub-contractors, creditors and suppliers (updated 22 September 2025), Insolvency Service, GOV.UK, 2025-09-22
  8. Business Secretary welcomes banks' support for small businesses affected by Carillion insolvency, BEIS, GOV.UK, 2018-01-17
  9. Practical support for businesses affected by Carillion liquidation, HMRC, GOV.UK, 2018-01-17
  10. Carillion contracts complete transfer, Insolvency Service, GOV.UK, 2018-08-06
  11. Insolvency Service Annual Report 2020 to 2021, Insolvency Service, GOV.UK, 2021-11-10
  12. Register of disqualified directors: Richard John Howson (Carillion plc), Companies House, 2023-10-04
  13. Register of disqualified directors: Richard John Adam (Carillion plc), Companies House, 2023-07-13
  14. Register of disqualified directors: Zafar Iqbal Khan (Carillion plc), Companies House, 2023-06-29
  15. Final Notice: Carillion plc (in liquidation), Financial Conduct Authority, 2026-02-16
  16. FCA publishes Decision Notices for Carillion plc (in liquidation) and three of its former executive directors, Financial Conduct Authority, 2022-07-28
  17. FCA fines former finance directors of Carillion plc (in liquidation), Financial Conduct Authority, 2026-01-07
  18. FCA fines former chief executive of Carillion plc (in liquidation), Financial Conduct Authority, 2026-02-16
  19. Sanctions against KPMG LLP, KPMG Audit plc and two former partners, Financial Reporting Council, 2023-10-12
  20. Findings in relation to Mr Adam and Mr Khan, and confirming enforcement action against three further individuals, Financial Reporting Council, 2026-05-12
  21. Insolvency Service '£8m out of pocket' over Carillion proceedings, Civil Service World, 2023-10-26
  22. Scores of Carillion companies will not pay creditors a penny, Construction News, 2025-09-22
  23. Carillion to double maximum payment terms to 120 days, Building, 2013-03-21
  24. Carillion payment terms grossly unfair: NSCC, The Construction Index, 2013-04-16
  25. Carillion collapse prompts call for payments reform, CIBSE Journal, 2018-02-01
  26. Duty to report: guidance to reporting on payment practices and performance, Department for Business and Trade, GOV.UK, 2025-09-02
  27. Check when large businesses pay their suppliers, GOV.UK, 2026-10-14
  28. Prompt payment policy, GOV.UK, 2025-04-24
  29. About the Fair Payment Code, Office of the Small Business Commissioner, 2026-10-14
  30. Late payments: tackling poor payment practices (consultation), Department for Business and Trade, GOV.UK, 2025-07-30
  31. Late payment consultation: time to pay up, government response, Department for Business and Trade, GOV.UK, 2026-03-24

This report is for education and is based on the public sources listed. It is not legal or financial advice about any company or contract.