GOVERNMENT officials have some explaining to do over the Carillion collapse, according to corporate recovery and business advisory specialists Quantuma.

Partner Graham Randall said: “The Government is facing increasing calls from opposition figures to explain why it awarded £2bn of contracts to Carillion after the distressed contracting company issued a number of profit warnings.”

Carillion has gone into liquidation today with debts of £1.5bn. Crisis talks with Government officials ended on Sunday as the company failed to secure the funding required to support its rescue plan.

The company is reportedly involved in 450 public infrastructure projects in the transport, defence, education and health sectors and the Government rejected calls to bail the construction company out.

Graham said: “I would expect these public sector contracts to either be taken back in-house or awarded to other contractors which is likely to increase costs significantly.”

On July 17 last year the Department of Transport awarded Carillion two major HS2 contacts a week after the company revealed its chief executive was stepping down in the light of the company having to set aside $1bn to cover loss making contracts in the UK and abroad.

Graham said: “The failure of Carillion will have a serious impact on employees and its supply chain, putting the financial future of many people and smaller businesses at risk”.

He added “Carillion appears to have won HS2 and other Government contracts after their financial difficulties emerged last year.

“This raises significant questions over the judgement of Government officials and their handling of the due diligence process that took place when these contracts were awarded.”