MPs have hit out at the board of collapsed outsourcer Carillion after it was revealed that the company paid more than £6m to City advisers just one day before asking the Government for a £10m taxpayer-backed loan.

Philip Green, Carillion’s chairman, wrote to the Cabinet Office on Jan 13 warning the company would fall into a “very disorderly and value destructive” insolvency that would harm its workers, customers and suppliers if it could not secure a bail-out.

But new figures released by the Official Receiver, a civil servant appointed by the courts to handle bankruptcies, show the company handed over millions to its advisers the day before, including £2.5m to Ernst and Young, £1.2m to law firm Slaughter and May and £1m to FTI Consulting. The Government refused to provide a bail-out on Sunday Jan 14 and Carillion applied for liquidation the following day.

Carillion timeline

Rachel Reeves MP, chairman of the business select committee, said Carillion’s board “ensured that the costs of failure would be picked up by the taxpayer – either from a bail-out or footing the bill for a desperate clean-up operation”. She added: “Expensive advisers still pocketed millions while workers risked losing jobs and long-suffering suppliers faced financial ruin”.

Last week some of Carillion’s biggest shareholders complained they had been kept in the dark over the state of its finances.

Representatives from giant funds Aberdeen Standard, Blackrock and Kiltearn Partners attacked the quality of Carillion’s audited reports and claimed management was distracted by setting their own remuneration targets, in testimony before MPs.

Murdo Murchison, the chairman of Kiltearn, told the joint business and pensions select committee that is investigating the outsourcer’s collapse that he was “surprised” and “very, very disappointed” when Carillion announced an £845m writedown in July last year.

Carillion was a major supplier to the Government, working on infrastructure projects including HS2 and maintaining hundreds of prisons, schools and military homes.