Interserve’s subcontractors will not be affected by its ‘pre-pack administration' last week, a minister has told MPs.
Cheltenham MP Alex Chalk asked Cabinet Office minister Oliver Dowden to confirm that no subcontractors have been adversely affected by outsourcing contractor’s move, in which it went into administration and ended up being owned by its creditors.
Mr Dowden (pictured) said he was happy to give suppliers ‘that assurance’. He added: ‘There is absolutely no change in the status of the credit rights of those suppliers who are providing services, as the operating companies remain unaffected; it is the ownership that has changed.’
Mr Chalk also raised the case of Carillion, in which ‘subcontractors were left dangerously exposed by unethical and over-lengthy payment terms’, asking the minister ‘what he is doing to ensure that these big companies cannot continue to act unethically in this way, but should play by the rules’.
Mr Dowden said he had twice brought in strategic suppliers ‘and reminded them of the importance of paying their subcontractors on time, and we are backing that up with action’.
The minister described Interserve’s move as a 'pre-pack administration', a ‘well-established and normal process’ of which hundreds are performed every year, under which the operating companies…that actually deliver the services, were then almost immediately purchased by a new company, Interserve Group Ltd.’
He said: ‘To be clear, the operating companies responsible for the delivery of all Interserve’s services, public and private, have remained wholly unaffected.’