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| Carillion executives accused of giving misleading evidence to MPs | Carillion executives accused of giving misleading evidence to MPs |
| (about 17 hours later) | |
| Former executives of Carillion have been accused by one of the defunct construction firm’s largest customers of giving misleading evidence to a parliamentary inquiry this week. | Former executives of Carillion have been accused by one of the defunct construction firm’s largest customers of giving misleading evidence to a parliamentary inquiry this week. |
| The comments came after seven former directors, including the one-time chief executive Richard Howson, were branded as “delusional characters” on Tuesday by MPs, who said the managers were willing to blame everyone but themselves for the contractor’s failure. | The comments came after seven former directors, including the one-time chief executive Richard Howson, were branded as “delusional characters” on Tuesday by MPs, who said the managers were willing to blame everyone but themselves for the contractor’s failure. |
| Appearing at a joint session of the business and work and pensions select committees, Howson pointed to a £200m bill owed to Carillion by Qatar, which he said remained unpaid for 18 months. | Appearing at a joint session of the business and work and pensions select committees, Howson pointed to a £200m bill owed to Carillion by Qatar, which he said remained unpaid for 18 months. |
| The project was to redevelop parts of Qatar’s capital city, Doha, to prepare it for the 2022 World Cup. Howson said he repeatedly tried to extract payment during monthly visits to the country, adding: “I felt like a bailiff.” | The project was to redevelop parts of Qatar’s capital city, Doha, to prepare it for the 2022 World Cup. Howson said he repeatedly tried to extract payment during monthly visits to the country, adding: “I felt like a bailiff.” |
| However, the client, Msheireb Properties, said the company “disputes the claims made by Carillion executives during the House of Commons select committee”. | However, the client, Msheireb Properties, said the company “disputes the claims made by Carillion executives during the House of Commons select committee”. |
| A spokesman added: “Despite ongoing project delay, Msheireb Properties continued to pay Carillion; however, Carillion did not pass these funds on to its supply chain, leaving over 40 subcontractors unpaid. | A spokesman added: “Despite ongoing project delay, Msheireb Properties continued to pay Carillion; however, Carillion did not pass these funds on to its supply chain, leaving over 40 subcontractors unpaid. |
| “This resulted in Msheireb Properties absorbing significant additional costs as we were forced to pay Carillion’s supply chain directly and engage a third-party contractor to ensure that Carillion’s original project was delivered.” | “This resulted in Msheireb Properties absorbing significant additional costs as we were forced to pay Carillion’s supply chain directly and engage a third-party contractor to ensure that Carillion’s original project was delivered.” |
| Howson could not be contacted for additional comment on Wednesday. However, one former Carillion source said that the Qatar contract was a commercial dispute, with both sides arguing they were owed money by the other. | Howson could not be contacted for additional comment on Wednesday. However, one former Carillion source said that the Qatar contract was a commercial dispute, with both sides arguing they were owed money by the other. |
| The Wolverhampton-based firm was second only to Balfour Beatty in size. | The Wolverhampton-based firm was second only to Balfour Beatty in size. |
| It was spun out of the Tarmac construction business in 1999 and steadily took over rivals, such as Mowlem and Alfred McAlpine. It expanded into Canada and built a construction arm in the Middle East. | It was spun out of the Tarmac construction business in 1999 and steadily took over rivals, such as Mowlem and Alfred McAlpine. It expanded into Canada and built a construction arm in the Middle East. |
| Carillion then diversified into outsourcing, taking on contracts such as running the mailroom at the Nationwide building society to helping upgrade UK broadband for BT Openreach. It took over running public service projects, ranging from prison and hospital maintenance to cooking school meals. In 2017 a third of its revenue – £1.7bn – came from state contracts. It employs 43,000 people, with more than 19,000 in the UK. | Carillion then diversified into outsourcing, taking on contracts such as running the mailroom at the Nationwide building society to helping upgrade UK broadband for BT Openreach. It took over running public service projects, ranging from prison and hospital maintenance to cooking school meals. In 2017 a third of its revenue – £1.7bn – came from state contracts. It employs 43,000 people, with more than 19,000 in the UK. |
| • GCHQ government communications centre in Cheltenham (2003) | • GCHQ government communications centre in Cheltenham (2003) |
| • Beetham Tower, Manchester (2006) | • Beetham Tower, Manchester (2006) |
| • HS1 (2007) | • HS1 (2007) |
| • London Olympics Media Centre - now BT Sport HQ (2011) | • London Olympics Media Centre - now BT Sport HQ (2011) |
| • Heathrow terminal 5 (2011) | • Heathrow terminal 5 (2011) |
| • The Library of Birmingham (2013) | • The Library of Birmingham (2013) |
| • Liverpool FC Anfield stadium expansion (2016)~ | • Liverpool FC Anfield stadium expansion (2016)~ |
| • Midland Metropolitan Hospital in Smethwick (due 2019) | • Midland Metropolitan Hospital in Smethwick (due 2019) |
| • Aberdeen bypass (due 2018) | • Aberdeen bypass (due 2018) |
| • Royal Liverpool University Hospital (due 2018, behind schedule) | • Royal Liverpool University Hospital (due 2018, behind schedule) |
| • NHS – managed 200 operating theatres; 11,800 beds; made 18,500 patient meals a day | • NHS – managed 200 operating theatres; 11,800 beds; made 18,500 patient meals a day |
| • Transport – “smart motorways” to monitor traffic and ease congestion; work on HS2; track renewal for Network Rail; Crossrail contractor | • Transport – “smart motorways” to monitor traffic and ease congestion; work on HS2; track renewal for Network Rail; Crossrail contractor |
| • Defence – maintained 50,000 armed forces’ houses; a £680m contract to provide 130 new buildings in Aldershot and Salisbury plain for troops returning from Germany | • Defence – maintained 50,000 armed forces’ houses; a £680m contract to provide 130 new buildings in Aldershot and Salisbury plain for troops returning from Germany |
| • Education – cleaning and meals for 875 schools | • Education – cleaning and meals for 875 schools |
| • Prisons – maintained 50% of UK prisons. | • Prisons – maintained 50% of UK prisons. |
| The latest twist in the saga came as the liaison select committee, which is made up of the chairs of the Commons select committees, also took evidence on the government’s response to the firm’s collapse. | The latest twist in the saga came as the liaison select committee, which is made up of the chairs of the Commons select committees, also took evidence on the government’s response to the firm’s collapse. |
| The Cabinet Office minister, David Lidington, along with John Manzoni, the chief executive of the civil service, and Gareth Rhys Williams, the government’s chief commercial officer, said that the official receiver had been granted £150m of public funds in order to run the Carillion liquidation. Private lenders had also made around £1bn available to assist subcontractors struggling to cope with the fallout. | The Cabinet Office minister, David Lidington, along with John Manzoni, the chief executive of the civil service, and Gareth Rhys Williams, the government’s chief commercial officer, said that the official receiver had been granted £150m of public funds in order to run the Carillion liquidation. Private lenders had also made around £1bn available to assist subcontractors struggling to cope with the fallout. |
| Lidington said: “The banks have put together about £1bn of support in the form of loans, credit and other financial support to affected businesses, and HMRC is giving affected businesses a grace period, rather than expecting them to pay immediate tax bills.” | Lidington said: “The banks have put together about £1bn of support in the form of loans, credit and other financial support to affected businesses, and HMRC is giving affected businesses a grace period, rather than expecting them to pay immediate tax bills.” |
| Manzoni added that the final cost to the taxpayer could be more or less than the £150m, depending on how much the receiver managed to claw back from selling on Carillion’s contracts. | Manzoni added that the final cost to the taxpayer could be more or less than the £150m, depending on how much the receiver managed to claw back from selling on Carillion’s contracts. |
| It has also emerged that not a single minister or official from the Department for Transport met with Carillion, or its subsidiaries, in the year before its collapse. | It has also emerged that not a single minister or official from the Department for Transport met with Carillion, or its subsidiaries, in the year before its collapse. |
| This was despite the firm being awarded four major government contracts worth almost £1.5bn, including two to start construction of stretches of the HS2 high-speed rail line. | This was despite the firm being awarded four major government contracts worth almost £1.5bn, including two to start construction of stretches of the HS2 high-speed rail line. |
| In a written answer to a Labour parliamentary question, the transport minister Nusrat Ghani confirmed there had been no meetings since January 2017. She said: “The department’s interaction with Carillion is primarily through its arm’s length bodies.” | In a written answer to a Labour parliamentary question, the transport minister Nusrat Ghani confirmed there had been no meetings since January 2017. She said: “The department’s interaction with Carillion is primarily through its arm’s length bodies.” |
| Jon Trickett, Labour’s shadow Cabinet Office minister, said: “Far from falling asleep on the job, Chris Grayling’s department clearly went into full-blown hibernation. | Jon Trickett, Labour’s shadow Cabinet Office minister, said: “Far from falling asleep on the job, Chris Grayling’s department clearly went into full-blown hibernation. |
| “They need to wake up and explain to the public how they could have possibly awarded a contract the size and significance of HS2, without so much as a meeting with Carillion.” | “They need to wake up and explain to the public how they could have possibly awarded a contract the size and significance of HS2, without so much as a meeting with Carillion.” |
| The two biggest contracts, for HS2, were announced in July 2017, exactly a week after Carillion’s first profit warning. | The two biggest contracts, for HS2, were announced in July 2017, exactly a week after Carillion’s first profit warning. |