Unite calls for public inquiry over Carillion
The UK’s largest union has called for a public inquiry into the collapse of Carillion and for it to cover the government’s approach to the awarding of contracts.
It follows the broadcast of the Channel Four Dispatches programme – How to Lose Seven Billion Pounds – on Wednesday.
The investigation included interviews with senior business analysts and former auditor general Sir John Bourn, who served from 1988 to 20089, who described Carillion as acting like a “Ponzi scheme”.
It claimed that the company was probably insolvent in 2016 but continued to trade for more than a year.
Dispatches also detailed the so called ‘aggressive accounting’ that took place at Carillion, which had its headquarters in Wolverhampton, under the former finance director Richard Adam. Accountants who forecast losses on major projects were told to go back and re-work the numbers to show that the schemes were profitable.
Unite, which has 1.4 million members, has also raised severe concerns about the Government’s decision in June this year to award a 12-year contract to outsource the Ministry of Defence’s firefighter service to Capita, despite the company recording a financial health score of just three out of 10.
Unite assistant general secretary Gail Cartmail, said: “As information continues to emerge about the collapse of Carillion, the need for a public inquiry grows.
“Thousands of workers have lost their jobs and companies in the supply chain have gone to the wall, though no fault of their own and yet no one has been held responsible.
“Rather than learn from its huge errors which contributed to Carillion’s collapse the Government is acting as though it is business as normal.
“There is a growing concern that the Government’s inaction could result in further collapses of outsourcing giants resulting yet again with workers losing their jobs and the taxpayer picking up the tab.”
When construction and outsourcing group Carillion went into liquidation on January 15 it was employing 19,000 people and there were a further 35,000 people employed by its sub-contractors and in its supply chain.
The company went bust with £7 billion of liabilities and only £25 million in the bank. It had a record £800m pension deficit.
Many major projects were left unfinished including the Midland Metropolitan Hospital at Smethwick.
The cost of breaking up and closing the company is in excess of £50m in fees charged by auditors PricewaterhouseCoopers alone. The taxpayer will have to pick up the bill for the auditors fees and for the costs of making thousands of staff redundant.
More than 2,700 people have lost their jobs so far, but the Official Receiver says that more than 13,500 have been saved.
