Unite, the UK’s largest union, called for a public inquiry into the collapse of Carillion and for it to cover the government’s approach to the awarding of contracts, following the Dispatches programme shown yesterday (Wednesday 22 August).
The programme included senior business analysts who described Carillion as acting like a “Ponzi Scheme” and that it was probably insolvent in 2016 but continued to trade for over a year.
Dispatches also detailed the so called ‘aggressive accounting’ that took place at Carillion under the former 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 has raised severe concerns about the government’s decision in June to award a 12 year contract to outsource the Ministry of Defence’s firefighter service to Capita, despite the company scoring 10 out of 10 and 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 Carillion went bust it was employing 19,000 people and there were a further 35,000 people employed by it sub-contractors and in its supply chain.
The company went bust with seven billion pounds of liabilities and only £25 million in the bank. The cost of breaking up and closing the company is in excess of £50 million in fees charged by auditors PwC alone. The taxpayer will have to pick up the bill for the auditors fees and for the costs of making thousands of staff redundant.
