THE Scottish Government is “ready to support” employees of collapsed construction firm Carillion – and began working on contingency plans last summer, it has emerged.

Economy Secretary Keith Brown said ministers will not allow major schemes such as the Aberdeen Western Peripheral Road (AWPR), also known as the Aberdeen bypass project, to fail after the company fell into liquidation yesterday.

Carillion is one-third of a consortium working on the infrastructure scheme, and holds the contract for the extension of platforms at Waverley train station in Edinburgh.

It was also hired to manage properties for West of Scotland Housing Association and the Ministry of Defence.

This includes the servicing of around 650 homes in Lossiemouth and Elgin, as well as family accommodation at Kinloss.

The Scottish Government said it expects work on the AWPR to continue and is holding discussions about other contracts.

Brown said: “Our first thoughts are with those Carillion employees who will be concerned for their jobs today.

“We are in discussions with the liquidators and the UK Government regarding the measures they intend to put in place regarding private sector, Network Rail and UK Government-backed contracts in Scotland to support Carillion employees and to secure the completion of these contracts.

“The Scottish Government has been working to manage or eliminate risks associated with Carillion’s difficulties since July last year.

“It has contingency plans in place for affected contracts, including the AWPR, where the contract contains a mechanism for the remaining two joint venture partners to deliver the project, and we expect that work to continue.”

He went on: “Should it be necessary, we stand ready to support for any affected employees through our Partnership Action for Continuing Employment (PACE) initiative, which aims to minimise the time individ-uals affected by redundancy are out of work.”

Network Rail said it is also activating its contingency plans as a result of the news.

Meanwhile, Scottish Building Federation (SBF) president Stephen Kemp, managing director of Orkney Builders, said: “The news that Carillion has now gone into liquidation has major ramifications for the UK construction sector.

“It should also stand as an important lesson for government that, when it comes to awarding public-sector work, big is by no means always best.

“As a trade federation, we have long argued that the bundling of contracts into huge frameworks that only the very biggest companies can bid for is not only detrimental for small and medium-sized enterprise (SME) contractors that are unable to compete, but also creates big risks for government when something like this happens.”

In the Commons yesterday, the SNP’s Tommy Sheppard asked Cabinet Office Minister David Lidington if it was “incompetence or ideology that led to ministers signing off multi-million-pound contracts to a company that was going bust”.

Lidington revealed the company’s private-sector contracts, which make up 60 per cent of its business, could be cancelled within 48 hours, while workers on public projects will be paid by the Official Receiver.

He said: “It is regrettable that Carillion has not been able to find suitable financing options with its lenders and I am disappointed that the company has become insolvent as a result.

“It is, however, the failure of a private-sector company and it is the company’s shareholders and its lenders who will bear the brunt of the losses – taxpayers should not and will not bail out a private-sector company for private sector losses or allow rewards for failure.”

Labour’s Jon Trickett called Lidington’s handling of the issue “recklessly complacent”, accusing him of “seeking to avoid responsibility for the Government” over the awarding of contracts.