William Eichler 15 January 2020

Government failing to ‘learn lesson’ of Carillion collapse

Government failing to ‘learn lesson’ of Carillion collapse image

The union Unite has accused the Government of failing ‘to learn the lessons’ from the collapse of the outsourcing giant Carillion.

Today marks the second anniversary since the collapse of Carillion, which led to 3,000 jobs being lost and 450 public sector projects falling through.

‘The collapse of Carillion and other high profile corporate failures, has resulted in thousands of workers losing their jobs,’ said Unite assistant general secretary Gail Cartmail.

‘In all these cases apparently healthy companies suddenly experienced financial problems and in several cases collapsed.’

It is understood that a report by the National Audit Office into the manner in which the Government awarded contracts to Carillion is to be published soon.

The Financial Reporting Council (FRC), which is examining Carillion’s audits and accounts dating as far back as 2013, has reported that it will publish its findings this summer.

A separate investigation by the Official Receiver is expected to report on how long Carillion was trading while insolvent and what action should be taken against the company’s directors.

Ms Cartmail said the auditing and accounting system for major companies is ‘clearly not fit for purpose’.

‘The fact that no regulator has been able to complete an investigation into Carillion and some are still at least a year from completion is a scandal in itself,’ she said.

Unite warned that the delays in establishing what went wrong continue to afflict two flagship hospital projects where work ceased when Carillion collapsed.

The Royal Liverpool hospital in Liverpool, which should have been completed in 2017, will not be completed until 2022. It will now cost £300m to complete. Work on the half-finished Midland Metropolitan hospital, on the border of Birmingham and the Black Country, is yet to restart with the contract only having been recently awarded to Balfour Beatty.

‘Despite the millions of pounds that the collapse of Carillion has cost the taxpayer not one single person has been found guilty of doing anything wrong,’ continued Ms Cartmail.

‘Until there is root and branch reform of how companies are allowed to operate in the UK and the way they are regulated workers will continue to be the innocent victims of bandit capitalism.’

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