Government contractor Interserve was bought out of administration last week, with assets moved to a group controlled by the company's lenders.
The firm, which operates food service brand Autograph catering to schools and hospitals, employs some 45,000 people in the UK, holding roughly £2b of government contracts. Administrators EY were called in on Friday and the pre-pack administration completed by the end of the day. The company will continue its contracts.
Data analyst group Tussell has claimed the firm continued to receive contracts from the government despite racking up debt and issuing profit warnings in May 2016, October 2017 and November 2018. The firm was handed public contracts worth £432m in 2017, and £233m last year. In December 2018 it announced a debt-for-equity rescue deal after accruing debts approaching £700m. It went on to receive a further £6m of government contracts.
Rehana Azam, National Secretary for union GMB, said: "Awarding hundreds of millions in taxpayer-funded contracts to troubled outsourcing companies is the height of irresponsibility.
"Interserve was clearly in trouble, and yet ministers saw fit to hand it hundreds of millions of pounds of public money. What on earth were they thinking?
"This government's obsession with outsourcing has now put another 45,000 jobs at risk, along with thousands more in the supply chain. ministers have still not taken on board the lessons from the collapse of Carillion."
The Caterer has contacted the Cabinet Office for comment.Get The Caterer every week on your smartphone, tablet, or even in good old-fashioned hard copy (or all three!).