Work and Pensions Committee chair Frank Field has sought assurances from The Pensions Regulator and the Carillion pensions trustee chair, amid £2.6bn deficit fears.

Field has sent questions to the construction firm’s pension trustee chair, Robin Ellison, as well as The Pensions Regulator chief executive, Lesley Titcomb, raising concerns over Carillion’s “giant pension deficit and a mountain of debt”.

In his letter to Ellison, Field queries what assurances the trustee chair sought about Carillion’s business model and how he responded to the firm's profit warning issued in July 2017.

Field also quizzed Ellison on the “upsurge in pension deficit” and has requested the trustee chair to explain the firm’s investment strategy and de-risking approach before and after the warnings.

It has now emerged that Carillion’s pension deficit could be as high as £2.6bn, considerably higher than the £587m the firm reported in June 2017, on a buy-out basis , according to Sky News. It takes Carillion’s total financial obligations at the time of its collapse to £5bn, however the firm had just £29m on its balance sheet at the time of liquidation.

The firm’s 28,500 members will now fall into Pension Protection Fund, which offers a reduced level of benefits to employees of companies who become bankrupt, and could face a bill of up to £920m for Carilion.

Yesterday (18 January 2017), it emerged that the PPF placed Carillion on its watch list last autumn and was aware of the construction firm’s financial plight for "some time".

Field also raises concerns over the conviction of Carillion chairman Philip Green by the Pensions Ombudsman in 1994, for the “breach of trust and maladministration in respect to the use of pension scheme monies at Coloroll”, where he was previously managing director and pensions trustee.

Commenting on the collapse, Field welcomed the government’s fast-track investigation into the firm, but now wanted to question the apparent mismanagement of the firm’s pension scheme, he said: “We have some specific concerns on the pensions side. It beggars belief that a company can be allowed to run with such apparent recklessness - and be so lucrative for the directors and shareholders - when it has a giant pension deficit and a mountain of debt.

“I will be proposing we take evidence from the company directors, the trustees, the pensions regulator and the auditors who somehow concluded Carillion was a going concern.

“Where our concerns overlap we will look to work closely with the Business Committee, as we have done successfully in the past.”

In a letter to Titcomb, Field asks if the regulator is currently investigating Carillion and whether it will pursue an anti-avoidance case.

In addition, Field wants to know what concerns TPR had about Carillion given its profit warning and whether it had any contact with the firm about this.

On Tuesday, Business Secretary, Greg Clarke, ordered a fast-track investigation into the directors of Carillion, which will look into previous directors of the company to determine whether the firm was mismanaged.

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