Ministers have set up a task force involving businesses and trade unions to support companies and workers affected by the collapse of Carillion.
The construction and outsourcing giant, employing 43,000 people including 20,000 in Britain and engaged in a variety of public sector contracts, went into liquidation earlier this week.
It has left thousands of suppliers and subcontractors owed money in limbo and seen work paused on building sites, prompting anger over the pay awards enjoyed by the company’s bosses as well as questions over the background to the collapse.
Carillion was left mired in £1.3bn of debt as well as being saddled with a £600m pensions deficit.
Video: Who will be affected by the collapse of Carillion?
The task force announced on Thursday was to begin work with a meeting chaired by Business Secretary Greg Clark.
A Business Department spokesman said the group would “continue to support and monitor the impact on small businesses and employees who have been affected by Carillion’s insolvency”.
He added the task force would include representatives from business, the construction trade associations, the trade unions, lenders and the Government.
TUC general secretary Frances O’Grady welcomed the formation of the task force.
She said: “Time is of the essence in dealing with this crisis. We need urgent action to protect jobs, pay and pensions.”
The TUC said it would press for the transfer of private sector contracts to alternative providers with jobs, pay and pensions protected, as well as comprehensive support packages for workers, apprentices and small firms at risk.
Video: How did it come to this for Carillion?
It also wants Carillion’s public service contracts to be brought back in-house, an urgent risk assessment for other large outsourcing firms, and a moratorium on future outsourcing work.
Earlier, building society Nationwide said it was safeguarding the jobs of 250 Carillion workers employed on services such as cleaning and security by taking their roles in-house.
It also said that it would directly take on deals involving 1,500 workers with firms that had been sub-contracted to work for it via Carillion.
Separately, Lloyds Banking Group said it had set up a £50m package of support to its small business customers within Carillion’s supply chain affected by the liquidation.
The fund will provide some with fee-free overdrafts and the worst hit with capital repayment holidays on loans for an initial six-month period.
State-backed Royal Bank of Scotland, meanwhile, announced a £75m fund to provide payment holidays and overdraft help to affected small business customers.
Carillion’s collapse came after banks pulled the plug on the failing firm.
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UK Finance, the industry body, has said lenders are now taking steps to ease the impact on small companies hit by the liquidation.
Construction industry body Build UK has estimated there are 25,000-30,000 businesses owed money for work carried out for Carillion prior to the allegation.