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Notification of Contingent Liabilities: Liquidation of UKCloud Ltd and Virtual Infrastructure Group

Volume 721: debated on Wednesday 26 October 2022

Today I am notifying the House of the steps taken by the Government in regards to the compulsory liquidation of UKCloud Ltd and Virtual Infrastructure Group Ltd.

Throughout this unfolding situation the Government have prioritised the continued delivery of public services. Taxpayers should not be expected to bail out a private sector company or allow rewards for failure.

The court has appointed an official receiver from the Insolvency Service who has taken control of the supply of services upon which public services ultimately rely. Whether these services are affected directly or throughout their supply chain, we will support the official receiver to find suitable alternative solutions for these customers.

In order to safeguard our public services, Departments affected have been implementing contingency plans.

The customers exposed to UKCloud Ltd may have their contracts repriced in return for continuation of services in the short term. This will allow the retention and employment of staff to deliver these services until suitable alternatives are found.

I would like to provide further reassurance that all employees affected by this liquidation will be contacted directly by the official receiver with regards to their position, rights and entitlements.

Our top priority, which we have emphasised to the official receiver, is to safeguard the continuity of public services. I have laid a departmental minute today notifying the House of two contingent liabilities that have been incurred by my Department in indemnifying the official receiver for any claims made against him, and for any costs and expenses incurred by him in carrying out the proper performance of his duties as liquidator. The official receiver has now taken over the running of services for a period following the insolvency of the company and will evaluate the appropriate insolvency strategy. The court appointment of the official receiver will allow us to protect the delivery of public services—something that would not have been possible under a normal liquidation process.

Alongside ministerial colleagues, I will keep the House updated on this ongoing situation.