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Public sector clients are taking a second look at the contracts they let following Carillion鈥檚 implosion in January.

The collapse of the country鈥檚 second-largest construction firm has sent shockwaves across town halls with those in charge of the purse strings now wanting to make sure their schemes are not left high and dry if a similar firm goes bust.

Morgan Sindall鈥檚 chief executive John Morgan warned in February that customers, 鈥渆specially the public sector鈥�, were looking more closely at their suppliers鈥� balance sheets in the wake of Carillion鈥檚 failure.

He said: 鈥淭hey鈥檙e asking many more questions about the balance sheet and about movements of the balance sheet between reporting periods. It鈥檚 logical 鈥� the changes in recent weeks will have cost the public sector purse dear.鈥�

And Mark Robinson, group chief executive of Scape, which runs a series of public sector construction frameworks, said public sector clients are doing a 鈥渄ouble check鈥� to ensure that contractors they sign up are not in any danger of going the way of Carillion.

He added: 鈥淐arillion has made them really think about who their projects are going to be delivered by. 

鈥淭hey鈥檙e being forced to rethink the culture of a tick-box approach to assessing financial stability and will be a bit more sceptical now.

鈥淚t鈥檚 difficult because Carillion鈥檚 financials were presented in such a way that you didn鈥檛 easily know what the true picture was. But we鈥檙e talking to our advisers about how we can ensure our public sector clients aren鈥檛 at risk of hiring people who go the same way.鈥�

Robinson said Scape is already looking at how it can introduce more detailed financial vetting into the procurement of its frameworks to detect any contractors with Carillion-style problems 鈥� but warned a 鈥渢ick-box鈥� approach would cut out dozens of smaller firms.

Cenkos analyst Kevin Cammack said Carillion鈥檚 failure has already led to public bodies not tendering large services contracts. 鈥淩enewal dates are coming up but they鈥檙e not retendering 鈥� they鈥檙e just leaving the incumbent in place, as the process has become more complex,鈥� he said.

鈥淭his is because of Carillion, but it鈥檚 much more about the costs of meeting the rising minimum wage and apprenticeship levy.鈥�

The warnings come as Office for National Statistics figures show new orders fell in the last quarter of 2017, while overall output dropped again in January on the back of three successive quarters of decline.