Unite, the
UK and Ireland’s largest union, has warned that the government has failed to
learn the lessons from the collapse of Carillion and that workers still face
losing their jobs without warning and through no fault of their own due to
rampant ‘bandit capitalism’.
Today
(Wednesday 15 January) marks the second anniversary since the collapse of
Carillion, the largest corporate failure in UK history.
Carillion’s
collapse was not an isolated case, in the two years since the company’s
implosion there have been several other high corporate failures including:
Interserve, Valerie Patisserie and Thomas Cook, where a lack of effective
regulation, was a key feature in the various companies financial difficulties
When
Carillion collapsed it had £7 billion of liabilities. Its collapse resulted in
thousands of workers losing their jobs and the taxpayer having to foot a bill
for hundreds of millions of pounds (redundancy, costs of closing the company
and additional costs for the hospitals) yet no one has been found guilty of any
wrongdoing.
It is
understood that a report by the National Audit Office into the manner that the
government awarded contracts to Carillion is imminent.
There is also outstanding investigation by the Financial Reporting
Council (FRC) which is examining Carillion’s audits and accounts dating as far
back as 2013. This week the FRC admitted that the
findings of an initial investigation will not be published until summer 2020.
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, but this is not expected for at least another year.
Meanwhile
delays continue to afflict the 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.The hospital was supposedly 85 per cent complete when Carillion
collapsed but due to a series of defects including problems with load bearing
beams and unsafe exterior cladding, the hospital will cost £300 million to
complete. The original budget for the hospital was £360 million.
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 with the Department of Health agreeing the
funding just before Christmas. It is hoped that the hospital is operational
prior to the Commonwealth Games in 2022, a delay of four years.
Unite
assistant general secretary Gail Cartmail said: “The collapse of Carillion and
other high profile corporate failures, has resulted in thousands of workers
losing their jobs.
“In all
these cases apparently healthy companies suddenly experienced financial
problems and in several cases collapsed.
“The UK’s
existing auditing and accounting system for major companies is clearly not fit
for purpose and workers are suffering as a result.
“Despite
this the government which has many friends among the major accountancy firms,
is proposing to do exactly nothing.
“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.
“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.
“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.”
