News - Construction News

Unite warns no lessons learnt over Carillion

Unite, Britain and Ireland’s largest union, has warned that a year after Carillion’s collapse the government’s inaction is putting jobs at risk and could result in future corporate meltdowns.

With £7Bn in liabilities and just £29M in the bank, Carillion went into compulsory liquidation on 15 January 2018. Experts believe that Carillion had been trading while insolvent for several years prior to its collapse.

Some 3,000 of Carillion’s staff were made redundant with many other workers in the company’s supply chain also losing their jobs. Many of Carillion’s sub-contractors were also forced out of business. The cost to the taxpayer for Carillion’s collapse is well in excess of £150M, with much of this money paid to accountants PwC.

Despite the scale of Carillion’s collapse, Unite is appealing against the inaction against any of Carillion’s directors or senior managers, despite longstanding investigations by the Financial Reporting Council (FRC) and the Insolvency Service. There have also been suggestions of investigations into potential insider trading. The delay in action led Unite to call for an immediate criminal investigation into Carillion’s collapse in September last year.

Unite say that the government has rejected all calls for substantial reforms to prevent further Carillion style collapses, with the only change being government piloting a policy that requires major outsourcing companies with public sector contracts in financial difficulties to produce a ‘living will’ to detail how services can continue to be run following a company’s demise.

Unite assistant general secretary Gail Cartmail: “It is staggering that a year after the biggest corporate failure in modern UK history the government has carried on as though it is business as normal.

“The government’s failure to take action to ensure that there cannot be similar collapses in the future is a betrayal of workers, who still face being cast on the scrapheap without warning because of irresponsible directors who place profits and shareholder dividends before people.

“The fact that no one involved in Carillion has yet had any form of action taken against them, demonstrates either that the regulators are failing to do their jobs or that existing laws are too weak. If it is the latter then we need better stronger laws.

“Taxpayers were handed a bill of over £150M to clean up the mess left by Carillion, yet the government has failed to end bandit capitalism in the UK.

“A year on from Carillion’s collapse the government needs to stop prevaricating and start taking effective action to drive bandit capitalism out of the UK.”

In December last year Unite published the first comprehensive report into Carillion’s collapse with over 20 recommendations for reforms needed to prevent future corporate collapses, the report is titled: Ending Bandit Capitalism: Learning the lessons following Carillion’s collapse.

If you would like to read more articles like this then please click here.