| 12.1°C Belfast

Outsourcing giants draw up plan to avoid Carillion-style collapses

Outsourcing giants Capita and Serco will draw up "living wills" to prevent public services being plunged into chaos if they collapse.

The firms, along with Sopra Steria, have volunteered to implement the measures which are aimed at avoiding the kind of difficulties faced when Carillion went bust in January.

The firms will complete their contingency plans within weeks and other companies are expected to follow.

In a speech to the Business Services Association last night, Cabinet Office Minister David Lidington said: "Carillion was a complex business and when it failed it was left to government to step in - and it did.

"But we did not have the benefit of key organisational information that could have smoothed the management of the liquidation.

"By ensuring contingency plans can be quickly put in place in the very rare event of supplier failure, we will be better prepared to maintain continuity of critical public services."

Serco CEO Rupert Soames said: "As a major government supplier, who has been quite vocal on issues around government contracting, it's pleasing to see industry and government coming together to develop a shared vision for the delivery of public services.

Weekly Business Digest

Margaret Canning’s selection of the must-read business stories straight to your inbox every Tuesday morning

This field is required

"We are now beginning to see progress being made in a number of areas - transparency, standards of behaviour, risk allocation, and 'living wills', which are designed to improve the resilience of government contracting."

Jon Lewis, chief executive of Capita, said: "As a strategic partner to the Government, we support the move to twin contracting with social value.

"Capita is committed to upholding the highest standards of service and working together with the Government to effectively deliver critical UK public services."