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Carillion crisis: Theresa May rules out bailout as Labour accuses ministers of collusion - live updates Carillion crisis: Theresa May rules out bailout as Labour accuses ministers of collusion - live updates
(about 2 hours later)
Hello again. Wednesday’s front pages are coming through, and many are leading on the Carillion crisis.
The Daily Telegraph’s business section focuses on the meagre scraps that will be available to Carillion’s creditors:
TELEGRAPH BUSINESS: Carillion creditors in line for less than 1p in £1 #tomorrowspaperstoday pic.twitter.com/eu9lSUF6Gx
City AM says Carillion’s directors face mounting pressure as the ‘fast-track’ probe into their activities looms:
CITY AM: Screws turn in Carillion execs #tomorrowspaperstoday pic.twitter.com/KH5QeEgz1n
The FT leads on those court papers, showing how Carillion had run so short of cash:
FINANCIAL TIMES: Cash strapped Carillion held just £29m in its final days #tomorrowspaperstoday pic.twitter.com/rRuRcsx7Tb
The Morning Star predicts that Carillion’s rivals will also be dragged into trouble:
Carillion fall is just the beginning #tomorrowspaperstoday pic.twitter.com/582XktItXQ
The dramatic collapse of Carillion has started to hit thousands of the firm’s suppliers, as the real world impact of the demise starts to emerge, the Guardian reports tonight.The dramatic collapse of Carillion has started to hit thousands of the firm’s suppliers, as the real world impact of the demise starts to emerge, the Guardian reports tonight.
Subcontractors owed money by the construction and services giant are already being pressurised by their banks and have begun laying off workers, as the threat of contagion afflicting the sector was likened to a near re-run of the banking crisis.Subcontractors owed money by the construction and services giant are already being pressurised by their banks and have begun laying off workers, as the threat of contagion afflicting the sector was likened to a near re-run of the banking crisis.
Andrew Adonis, the former Labour transport minister, said:Andrew Adonis, the former Labour transport minister, said:
“It is a bit like Lehman Brothers [the Wall Street investment bank that collapsed in 2008]. You don’t know what the impact will be.“It is a bit like Lehman Brothers [the Wall Street investment bank that collapsed in 2008]. You don’t know what the impact will be.
A very large part of Carillion’s work was project management where subcontractors do the work, but these subcontractors don’t know if they will be paid.”A very large part of Carillion’s work was project management where subcontractors do the work, but these subcontractors don’t know if they will be paid.”
The supplier concerns came as the liquidators PricewaterhouseCoopers said they would not pay any bills “for goods/services provided before the liquidation date [on Monday]”, while Carillion workers providing services to private sector firms face having their wages stopped on Wednesday unless another employer steps in to take over.The supplier concerns came as the liquidators PricewaterhouseCoopers said they would not pay any bills “for goods/services provided before the liquidation date [on Monday]”, while Carillion workers providing services to private sector firms face having their wages stopped on Wednesday unless another employer steps in to take over.
Here’s our full story:Here’s our full story:
Subcontractors begin laying off staff after Carillion collapse https://t.co/fpZBBdZaceSubcontractors begin laying off staff after Carillion collapse https://t.co/fpZBBdZace
The UK government is under growing pressure tonight over its handling of the collapse of Carillion, one of the UK’s biggest contractors.The UK government is under growing pressure tonight over its handling of the collapse of Carillion, one of the UK’s biggest contractors.
Prime minister Theresa May has insisted that taxpayers should not have bailed out Carillion, which plunged into liquidation yesterday. She told a cabinet meeting that the government would be “vigilant in monitoring for any emerging issues in public services” at schools, hospitals, prisons and beyond.Prime minister Theresa May has insisted that taxpayers should not have bailed out Carillion, which plunged into liquidation yesterday. She told a cabinet meeting that the government would be “vigilant in monitoring for any emerging issues in public services” at schools, hospitals, prisons and beyond.
Labour, though, have accused ministers of ‘colluding’ to keep Carillion in business, even as it posted a string of profit warnings.Labour, though, have accused ministers of ‘colluding’ to keep Carillion in business, even as it posted a string of profit warnings.
Shadow Chancellor John McDonnell told parliament:Shadow Chancellor John McDonnell told parliament:
“When there were loud and clear worrying signs about Carillion, why, instead of intervening, did the Treasury Minister collude in the strategy of drip-feeding more contracts to Carillion to buoy up an obviously failing company?”“When there were loud and clear worrying signs about Carillion, why, instead of intervening, did the Treasury Minister collude in the strategy of drip-feeding more contracts to Carillion to buoy up an obviously failing company?”
“I put it no stronger than this: at this stage, there are real suspicions that the Government was too close to this company and too wedded to its privatisation role.“I put it no stronger than this: at this stage, there are real suspicions that the Government was too close to this company and too wedded to its privatisation role.
The government is promising to provide support for thousands of British staff working for private-sector companies inside the stricken conglomerate. But their wages are only guaranteed until Wednesday under the current contingency plans.The government is promising to provide support for thousands of British staff working for private-sector companies inside the stricken conglomerate. But their wages are only guaranteed until Wednesday under the current contingency plans.
Unions have warned that the clock is ticking. They urged ministers to protect the 8,500 workers on private sector contracts, who fear losing their jobs and being unable to pay their mortgages.Unions have warned that the clock is ticking. They urged ministers to protect the 8,500 workers on private sector contracts, who fear losing their jobs and being unable to pay their mortgages.
The TUC has called for a new National Task Force. It would protect jobs, pensions and services, and look for other serious problems in the outsourcing industry.The TUC has called for a new National Task Force. It would protect jobs, pensions and services, and look for other serious problems in the outsourcing industry.
Carillion’s directors are also under the microscope. The government has ordered a ‘fast-track’ investigation into their conduct, and a full investigation of the work done by the company’s auditors, KPMG.Carillion’s directors are also under the microscope. The government has ordered a ‘fast-track’ investigation into their conduct, and a full investigation of the work done by the company’s auditors, KPMG.
Papers filed at the high court show that Carillion’s many creditors may get as little as 1p in the pound. That would be a very serious blow to small firms who were owed money for work they’d carried out.Papers filed at the high court show that Carillion’s many creditors may get as little as 1p in the pound. That would be a very serious blow to small firms who were owed money for work they’d carried out.
Some have already begun firing staff.Some have already begun firing staff.
Although Carillion wasn’t a household name, the collapse of such a major player in the outsourcing and construction industry has rattled the sector.Although Carillion wasn’t a household name, the collapse of such a major player in the outsourcing and construction industry has rattled the sector.
Could other firms be next?Could other firms be next?
My colleague Nick Fletcher has been kicking the tyres of rivals such as Serco, G4S, Capita and Balfour Beatty to test their resilience.My colleague Nick Fletcher has been kicking the tyres of rivals such as Serco, G4S, Capita and Balfour Beatty to test their resilience.
Here’s his verdict on Capita:Here’s his verdict on Capita:
About half of Capita’s annual turnover of £4.9bn comes from central and local government work, ranging from administering the teachers’ pension scheme to providing tech services to the NHS, electronic monitoring services and running the Gas Safe register for the Health and Safety Executive. It has 70,000 UK employees, and a net debt of £1.6bn compared with its market value of £2.8bn.About half of Capita’s annual turnover of £4.9bn comes from central and local government work, ranging from administering the teachers’ pension scheme to providing tech services to the NHS, electronic monitoring services and running the Gas Safe register for the Health and Safety Executive. It has 70,000 UK employees, and a net debt of £1.6bn compared with its market value of £2.8bn.
The company’s shares have lost two-thirds of their value over the past two years after a series of profit warnings and boardroom changes.The company’s shares have lost two-thirds of their value over the past two years after a series of profit warnings and boardroom changes.
Here’s Nick’s full verdict:Here’s Nick’s full verdict:
Accountancy firm PwC is under scrutiny tonight over its involvement in Carillion’s collapse.Accountancy firm PwC is under scrutiny tonight over its involvement in Carillion’s collapse.
PwC staff were appointed as ‘special managers’ yesterday, to help the Official Receiver run the company. But the firm doesn’t come to the crisis with a blank slate - last year, it was advising Carillion’s pension trustees, according to the Financial Times.PwC staff were appointed as ‘special managers’ yesterday, to help the Official Receiver run the company. But the firm doesn’t come to the crisis with a blank slate - last year, it was advising Carillion’s pension trustees, according to the Financial Times.
These ‘multiple roles’ don’t look great, the FT says tonight:These ‘multiple roles’ don’t look great, the FT says tonight:
The head of a rival accounting firm, who requested anonymity, added that PwC’s appointment “simply looks wrong”.The head of a rival accounting firm, who requested anonymity, added that PwC’s appointment “simply looks wrong”.
“From a professional point of view they might just be the right side of the line [in terms of managing conflicts], but optically they will be on a hiding for nothing.“From a professional point of view they might just be the right side of the line [in terms of managing conflicts], but optically they will be on a hiding for nothing.
Even if they are OK, they are not OK,” he said. PwC, which is expected by other executives to earn as much as £50m from the liquidation process, declined to comment.Even if they are OK, they are not OK,” he said. PwC, which is expected by other executives to earn as much as £50m from the liquidation process, declined to comment.
PwC:— advised Carillion’s pension trustees on its financial difficulties— advised gov on what to do if Carillion collapsed— are handling the liquidation now that it has collapsedhttps://t.co/UbtJAIbt8ZPwC:— advised Carillion’s pension trustees on its financial difficulties— advised gov on what to do if Carillion collapsed— are handling the liquidation now that it has collapsedhttps://t.co/UbtJAIbt8Z
On the other hand.... the government could hardly appoint KPMG or Deloitte, as they have both acted as Carillion’s auditors, while EY had also advised Carillion.On the other hand.... the government could hardly appoint KPMG or Deloitte, as they have both acted as Carillion’s auditors, while EY had also advised Carillion.
That only leaves smaller firms, who might have less expertise or experience of such as massive job.That only leaves smaller firms, who might have less expertise or experience of such as massive job.
The problem - as with the outsourcing sector - is that there are too few rivals, and thus less genuine choice.The problem - as with the outsourcing sector - is that there are too few rivals, and thus less genuine choice.
Conservative MP Bernard Jenkin agrees that lessons need to be learned from the Carillion crisis.Conservative MP Bernard Jenkin agrees that lessons need to be learned from the Carillion crisis.
Jenkin chairs the Public Accounts Committee, which announced an inquiry into the outsourcing of public services yesterday.Jenkin chairs the Public Accounts Committee, which announced an inquiry into the outsourcing of public services yesterday.
Speaking on Channel 4 News, Jenkin says the government should “expand the pool of companies” which it awards contracts too.Speaking on Channel 4 News, Jenkin says the government should “expand the pool of companies” which it awards contracts too.
The governments “preferred bidder system” makes the assumption, perhaps wrongly, that bigger companies are safer than smaller ones - Jenkin adds.The governments “preferred bidder system” makes the assumption, perhaps wrongly, that bigger companies are safer than smaller ones - Jenkin adds.
Unions have warned the government that the “clock is ticking” for thousands of Carillion workers.Unions have warned the government that the “clock is ticking” for thousands of Carillion workers.
The GMB says there are at least 8,473 Carillion private sector workers in the UK, whose jobs are vulnerable following the firm’s liquidation on Monday.The GMB says there are at least 8,473 Carillion private sector workers in the UK, whose jobs are vulnerable following the firm’s liquidation on Monday.
GMB general secretary Tim Roache says the government must not “throw workers the wolves”.GMB general secretary Tim Roache says the government must not “throw workers the wolves”.
Roache, who met business secretary Greg Clark this evening, says:Roache, who met business secretary Greg Clark this evening, says:
“The clock is ticking for Carillion’s 8,500 private sector workers, and the Government must now offer them reassurance and financial guarantees.“The clock is ticking for Carillion’s 8,500 private sector workers, and the Government must now offer them reassurance and financial guarantees.
“No worker should go hungry, default on a bill or miss a rent or mortgage payment because of a crisis they did not cause.”“No worker should go hungry, default on a bill or miss a rent or mortgage payment because of a crisis they did not cause.”
The unions are worried because cabinet office minister David Lidington said yesterday that the government would only protect Carillion’s private sector contracts for 48 hours. That raised fears that jobs cut start being cut on Wednesday....The unions are worried because cabinet office minister David Lidington said yesterday that the government would only protect Carillion’s private sector contracts for 48 hours. That raised fears that jobs cut start being cut on Wednesday....
Carillion’s collapse means the company’s workers and pensioners will soon be in the hands of the UK’s pension’s lifeboat.Carillion’s collapse means the company’s workers and pensioners will soon be in the hands of the UK’s pension’s lifeboat.
The Pension Protection Fund is widely expected to take on Carillion’s pensions deficit, of around £580m. Those already taking pensions will be protected, but those members below retirement age will face cuts of 10-20%.The Pension Protection Fund is widely expected to take on Carillion’s pensions deficit, of around £580m. Those already taking pensions will be protected, but those members below retirement age will face cuts of 10-20%.
The PPF has got the resources to cope. But my colleague Rupert Jones reports that its pockets are only so deep....The PPF has got the resources to cope. But my colleague Rupert Jones reports that its pockets are only so deep....
The former pensions minister Steve Webb told the Guardian that “Carillion would be the biggest-ever hit on the PPF” but that the lifeboat would be able to “comfortably absorb” the Carillion scheme.The former pensions minister Steve Webb told the Guardian that “Carillion would be the biggest-ever hit on the PPF” but that the lifeboat would be able to “comfortably absorb” the Carillion scheme.
Nigel Green, the chief executive of deVere Group, one of Britain’s biggest independent financial adviser firms, said: “UK final salary pension schemes have an enormous deficit black hole, which raises the inevitable question: how many more big hits can the PPF take?”Nigel Green, the chief executive of deVere Group, one of Britain’s biggest independent financial adviser firms, said: “UK final salary pension schemes have an enormous deficit black hole, which raises the inevitable question: how many more big hits can the PPF take?”
The Carillion liquidation, he said, “should trigger alarm bells for pension savers across the UK”.The Carillion liquidation, he said, “should trigger alarm bells for pension savers across the UK”.
Labour MP Rachel Reeves is also piling pressure on the government tonight.Labour MP Rachel Reeves is also piling pressure on the government tonight.
She’s calling on ministers to urgently tighten Britain’s corporate governance rules to prevent another Carillion crisis.She’s calling on ministers to urgently tighten Britain’s corporate governance rules to prevent another Carillion crisis.
Reeves, who chairs the Business, Energy and Industrial Strategy select committee, says firms shouldn’t be allowed to pay out dividends when they’re also reporting profit warnings or losing money.Reeves, who chairs the Business, Energy and Industrial Strategy select committee, says firms shouldn’t be allowed to pay out dividends when they’re also reporting profit warnings or losing money.
She told the BBC News that:She told the BBC News that:
In the end, the people who lose out when money is siphoned off is suppliers, workers, and when government contract are involved it’s ultimately the British tax payer.In the end, the people who lose out when money is siphoned off is suppliers, workers, and when government contract are involved it’s ultimately the British tax payer.
It’s not acceptable that those risks can be transferred to the taxpayers and employees, while the executives get the bonuses and the dividends.It’s not acceptable that those risks can be transferred to the taxpayers and employees, while the executives get the bonuses and the dividends.
That’s not right and the corporate governance code urgently needs to be tightened up in the light of this scandal.That’s not right and the corporate governance code urgently needs to be tightened up in the light of this scandal.
As workers, suppliers and taxpayers pay the price for Carillion's collapse, the Chief Executive who was sacked last year for his part in the company's downfall is still being paid £660,000 a year. Govt must act to prevent companies siphoning off millions at taxpayers' expense. pic.twitter.com/vYSJbCQrggAs workers, suppliers and taxpayers pay the price for Carillion's collapse, the Chief Executive who was sacked last year for his part in the company's downfall is still being paid £660,000 a year. Govt must act to prevent companies siphoning off millions at taxpayers' expense. pic.twitter.com/vYSJbCQrgg
Here are the key quotes from shadow chancellor John McDonnell in parliament earlier today, as he called for “full transparency” into the Carillion crisis.Here are the key quotes from shadow chancellor John McDonnell in parliament earlier today, as he called for “full transparency” into the Carillion crisis.
“When there were loud and clear worrying signs about Carillion, why, instead of intervening, did the Treasury Minister collude in the strategy of drip-feeding more contracts to Carillion to buoy up an obviously failing company?”“When there were loud and clear worrying signs about Carillion, why, instead of intervening, did the Treasury Minister collude in the strategy of drip-feeding more contracts to Carillion to buoy up an obviously failing company?”
“I put it no stronger than this: at this stage, there are real suspicions that the Government was too close to this company and too wedded to its privatisation role.“I put it no stronger than this: at this stage, there are real suspicions that the Government was too close to this company and too wedded to its privatisation role.
“We need full transparency on meetings and discussions that took place between Government ministers, civil servants and representatives of Carillion and what warnings were given to ministers and what actions recommended implemented or not.“We need full transparency on meetings and discussions that took place between Government ministers, civil servants and representatives of Carillion and what warnings were given to ministers and what actions recommended implemented or not.
We now need the Treasury to start playing its proper role and provide an independent assessment of the potential costs and risks facing the taxpayer.”We now need the Treasury to start playing its proper role and provide an independent assessment of the potential costs and risks facing the taxpayer.”
In response Liz Truss, Chief Secretary to the Treasury, reiterated Theresa May’s view that taxpayers shouldn’t bail Carillion out.In response Liz Truss, Chief Secretary to the Treasury, reiterated Theresa May’s view that taxpayers shouldn’t bail Carillion out.
“It would be completely wrong for a company that had got itself in this state to be bailed out by the state and that is what we are not doing.“It would be completely wrong for a company that had got itself in this state to be bailed out by the state and that is what we are not doing.
Truss also accused McDonnell of taking ‘cheap shots’.Truss also accused McDonnell of taking ‘cheap shots’.
“I think that the Government is dealing with this in a responsible and measured way, rather than making cheap political shots at a time when people’s jobs are in question and we are working to sort that out.”“I think that the Government is dealing with this in a responsible and measured way, rather than making cheap political shots at a time when people’s jobs are in question and we are working to sort that out.”
The Federation of Small Businesses is alarmed to hear that Carillion’s creditors might only recover 1% of the money they are owed (as flagged up earlier).The Federation of Small Businesses is alarmed to hear that Carillion’s creditors might only recover 1% of the money they are owed (as flagged up earlier).
The Evening Standard’s Russell Lynch has the details:The Evening Standard’s Russell Lynch has the details:
The revelation comes in a High Court witness statement submitted by the interim chief executive, Keith Cochrane, on the company’s liquidation yesterday and seen by the Standard.The revelation comes in a High Court witness statement submitted by the interim chief executive, Keith Cochrane, on the company’s liquidation yesterday and seen by the Standard.
Cochrane’s account of the six-month prelude to the company’s demise also delivers a broadside against the firm’s lenders and reveals that private sector clients were refusing to give them new work in contrast with the Government, which awarded them major contracts on the HS2 rail scheme last summer.Cochrane’s account of the six-month prelude to the company’s demise also delivers a broadside against the firm’s lenders and reveals that private sector clients were refusing to give them new work in contrast with the Government, which awarded them major contracts on the HS2 rail scheme last summer.
Carillion collapsed under the weight of £1.6 billion in debts and a pension deficit of £587 million this week, leaving many suppliers facing ruin. But Cochrane’s statement also refers to an “entity priority analysis” by accountants EY, which had been working with the firm since the summer, on the impact of a potential failure of the bank last month.Carillion collapsed under the weight of £1.6 billion in debts and a pension deficit of £587 million this week, leaving many suppliers facing ruin. But Cochrane’s statement also refers to an “entity priority analysis” by accountants EY, which had been working with the firm since the summer, on the impact of a potential failure of the bank last month.
“This showed that the insolvency recovery for creditors in the event of a group-wide liquidation would be an average of between 0.8p in the pound and 6.6p in the pound,” he wrote.“This showed that the insolvency recovery for creditors in the event of a group-wide liquidation would be an average of between 0.8p in the pound and 6.6p in the pound,” he wrote.
The Federation of Small Businesses said: “If these figures are correct, many small businesses will not be able to cope with that kind of impact on their cashflow.”The Federation of Small Businesses said: “If these figures are correct, many small businesses will not be able to cope with that kind of impact on their cashflow.”
Carillion crisis: suppliers could get less than 1p in pound, PwC slammed, banks to take hit https://t.co/0LFhpVVZ8P pic.twitter.com/v8TO5Y4GjaCarillion crisis: suppliers could get less than 1p in pound, PwC slammed, banks to take hit https://t.co/0LFhpVVZ8P pic.twitter.com/v8TO5Y4Gja
Here’s a video clip of John McDonnell telling MPs today that the government was “too close” to Carillion, and chose to “drip-feed” contracts to the company rather than heed the warning signs.Here’s a video clip of John McDonnell telling MPs today that the government was “too close” to Carillion, and chose to “drip-feed” contracts to the company rather than heed the warning signs.
“There are real suspicions that this Govt was too close to Carillion & too wedded to it's privatisation role.""We need full transparency of the meetings that took place between Govt ministers and representatives of #Carillion." @johnmcdonnellMP pic.twitter.com/qEJRqocfFo“There are real suspicions that this Govt was too close to Carillion & too wedded to it's privatisation role.""We need full transparency of the meetings that took place between Govt ministers and representatives of #Carillion." @johnmcdonnellMP pic.twitter.com/qEJRqocfFo
Shares in UK geotechnical engineering contractor Van Elle have tumbled by almost 8% today, after it told shareholders that it is owed £1.6m by Carillion.Shares in UK geotechnical engineering contractor Van Elle have tumbled by almost 8% today, after it told shareholders that it is owed £1.6m by Carillion.
The Carillion crisis has spurred many Guardian readers to write in with your views (as well as many excellent online comments, of course!).The Carillion crisis has spurred many Guardian readers to write in with your views (as well as many excellent online comments, of course!).
For example, Paul Davies of Goring, Oxfordshire, says ministers must be held to account:For example, Paul Davies of Goring, Oxfordshire, says ministers must be held to account:
The government has been trumpeting its code that requires large companies to treat their suppliers fairly and pay them on the same terms as the government pays the big companies. Instead it has emerged that Carillion used its suppliers as a bank – refusing to pay them except on 120-day terms, while being paid on 30-day terms by the government.The government has been trumpeting its code that requires large companies to treat their suppliers fairly and pay them on the same terms as the government pays the big companies. Instead it has emerged that Carillion used its suppliers as a bank – refusing to pay them except on 120-day terms, while being paid on 30-day terms by the government.
For the officials and ministers in so many departments to have turned a blind eye to this bullying by Carillion is a disgrace and it is surely time that both officials and ministers in transport, defence, health, education and elsewhere are held accountable for this total failure. If ministers weren’t aware of this, the officials should be subject to disciplinary procedures.For the officials and ministers in so many departments to have turned a blind eye to this bullying by Carillion is a disgrace and it is surely time that both officials and ministers in transport, defence, health, education and elsewhere are held accountable for this total failure. If ministers weren’t aware of this, the officials should be subject to disciplinary procedures.
The brevity award goes to Rick Barker of Stocksfield, Northumberland:The brevity award goes to Rick Barker of Stocksfield, Northumberland:
“More is not always better. Million, billion, trillion… Carillion.”“More is not always better. Million, billion, trillion… Carillion.”
Tomorrow’s newspaper includes a selection of the best, which are online here:Tomorrow’s newspaper includes a selection of the best, which are online here:
Our lead package for tomorrow's letters spread https://t.co/UJDBtMKx0AOur lead package for tomorrow's letters spread https://t.co/UJDBtMKx0A
Reuters has calculated that Carillion paid out $1bn (£775m) to its shareholders in dividends since the firm was created 19 years ago.Reuters has calculated that Carillion paid out $1bn (£775m) to its shareholders in dividends since the firm was created 19 years ago.
The company has been criticised for its ‘progressive dividend’ policy -- basically boosting returns to investors each year.The company has been criticised for its ‘progressive dividend’ policy -- basically boosting returns to investors each year.
Had it paid out less, it could have done more to tackle its pension deficit (£580m), and could have trimmed its net debts, which swelled to £900bn by the time of its collapse.Had it paid out less, it could have done more to tackle its pension deficit (£580m), and could have trimmed its net debts, which swelled to £900bn by the time of its collapse.
Labour’s shadow chancellor John McDonnell has blamed “shambolic Tory government and mismanagement by Carillion’s fat-cat bosses for the company’s collapse.Labour’s shadow chancellor John McDonnell has blamed “shambolic Tory government and mismanagement by Carillion’s fat-cat bosses for the company’s collapse.
Writing in the Guardian tonight, McDonnell says:Writing in the Guardian tonight, McDonnell says:
Nothing has come to symbolise the worship of free market solutions – often against all the evidence – more than the persistent belief that key public services would be better provided by profit-seeking companies. As the journalist Robert Peston put it, the collapse of Carillion represents the definitive end of a 25-year love affair with the private provision of public services.Nothing has come to symbolise the worship of free market solutions – often against all the evidence – more than the persistent belief that key public services would be better provided by profit-seeking companies. As the journalist Robert Peston put it, the collapse of Carillion represents the definitive end of a 25-year love affair with the private provision of public services.
The end of the affair has revealed some unedifying details about some of the participants in it: the apparent reliance by Carillion’s management on “low-balling” bids to win them, then sweating suppliers and workers to squeeze a profit; Chris Grayling’s insistence on awarding Carillion the HS2 contract even after its first profit warning; David Cameron’s decision to appoint Carillion’s chairman, Philip Green, as an adviser on corporate responsibility.The end of the affair has revealed some unedifying details about some of the participants in it: the apparent reliance by Carillion’s management on “low-balling” bids to win them, then sweating suppliers and workers to squeeze a profit; Chris Grayling’s insistence on awarding Carillion the HS2 contract even after its first profit warning; David Cameron’s decision to appoint Carillion’s chairman, Philip Green, as an adviser on corporate responsibility.
McDonnell also points out that Labour has promised not to sign any new PFI contracts if it wins the next election, adding:McDonnell also points out that Labour has promised not to sign any new PFI contracts if it wins the next election, adding:
If the Tories won’t wake up to the reality of the changing economic landscape, it’s time they stood aside and let us take over.If the Tories won’t wake up to the reality of the changing economic landscape, it’s time they stood aside and let us take over.
Andrew Bounds, the Financial Times North of England correspondent, reports that there was little action at a Carillion site in Salford, Manchester, today:Andrew Bounds, the Financial Times North of England correspondent, reports that there was little action at a Carillion site in Salford, Manchester, today:
The “come to work” message has not got through to #Carillion private sector sites. This one in Salford by the Lowry Hotel. pic.twitter.com/BJL5Acv809The “come to work” message has not got through to #Carillion private sector sites. This one in Salford by the Lowry Hotel. pic.twitter.com/BJL5Acv809
Here’s a picture of Andy Bradley of Flora-Tec, who was forced to lay off 10 staff because he’s owed £800,000 by Carillion (see this morning’s posts)Here’s a picture of Andy Bradley of Flora-Tec, who was forced to lay off 10 staff because he’s owed £800,000 by Carillion (see this morning’s posts)
I think he’s holding some mulch. Manure might be more appropriate, given the situation facing hundreds of Carillion’s own suppliers.I think he’s holding some mulch. Manure might be more appropriate, given the situation facing hundreds of Carillion’s own suppliers.