Carillion

I wonder if there is a single thing that this government does is successful.

The Tories seem to have a reverse Midas touch.

Another government minister given an easy ride by Humphrey

It’s what happens when the term “Value for Money” is translated as “Cheapest”. I don’t believe its totally a political thing, more that the civil service have been pressured for decades to provide the cheapest option so as to avoid tax rises.

Heard of the word corruption?

This reminds me so much of British Leyland and its painful demise. It believed it could do as it wanted because the Government would have to step in and save it, every time.
No lessons learned, and the root cause, greed.

That's exactly what happened Maryeliza low tenders then unable to carry out the work for the specified price. They have government contracts, why is this not monitored. So many allied firms are going to be in great difficulty now.

Yep.... rife throughout the ages!

My ignorance about the whole of this is monumental and indeed I had never heard of them - but my immediate reaction was "Surely someone knew that they were heading for a nose dive."

(Sorry that last was for WW)

Lucky you and me both. I have been reading and catching up with the situation and I am shocked that this has been allowed to happen - the problems cannot have been under the radar.

The government was warned but continued to award contracts

Shocked by all the issues mentioned but gobsmacked when I saw for the first time that that chairman of Carillion is Philip Green!
Not SIR Philip Green so I'm hoping either it's a different Green????? or he's been stripped of his knighthood (not that it would help the situation).
Would someone please tell me I've picked that up wrongly!

No, but just an unfortunate name!,

"Appointed to the Board in June 2011, Philip became Chairman in May 2014. Philip is also Chairman of both the Nominations and Business Integrity Committees.

Philip was Chief Executive of United Utilities Group plc from 2006 to 2011. His earlier business experience includes serving as Chief Executive of Royal P&O Nedlloyd, as a Director and Chief Operating Officer at Reuters Group PLC and as Chief Operating Officer at DHL for Europe and Africa.

He is Non-Executive Chairman of Logicor, a European logistics real estate business owned by Blackstone and of Corsair Infrastructure Management which is based in New York."

Not a Sir but CBE.

I thought after the bank crisis the buzzword was to not let any company get "too big to fail" and then only a few years later we're hearing whispers about the government bailing out yet another company.

Carillion was allowed to get far too big . Huge amounts of money paid out already for services that will still have to be carried out and no doubt paid for again by us mugs ( the tax payers ) . There’s a saying that begins “the higher they climb......”

He is also an adviser to May on corporate social responsibility. Another stunning example of her judgement

David Liddington has just said that he was appointed by DC and does not advise TM on this.

It’s what happens when the term “Value for Money” is translated as “Cheapest”.

So true. I have never understood why anyone thought that a private company, whose first aim is now to pay shareholders before anything else, would be able to do something better and cheaper. There really is no rule of the universe that say that is either true or necessarily possible.

Why do we allow private companies to trouser all the profits, but the taxpayer has to pick up any losses?

No lessons learned, and the root cause, greed.

I don't agree although greed certainly play a large part. It is the ideology of right within the Conservative party that believes you can privatise everything while they seem to understand so little that is causing these horrendous issues. They are simply incompetent and appear to lack real knowledge.

Hummm. suzie let me think

I don't know enough about the detail of what happened at Carillion to take a view yet on how culpable the government is in the collapse of the company.

From the numerous articles in the FT about this, it seems they bought other companies, took on a load of debt and were overstretched when they had some large project failures. Projects were ending without new work coming in. The FT opinion pieces say too much debt, not enough equity.

Apparently, the overreach of the company was noted by some hedge funds back in 2013. It's unlikely, in my opinion, that the company imploded quickly and I would speculate that there are a series of decisions made by banks, auditors and Carillion management that, retrospectively, made liquidation more likely. There have been profit warnings from companies like Mitie, Capita and Serco, so it's a problem across several companies taking on long-term government contracts.

They certainly got HS2 after problems were known about. There are several possible explanations - a too cosy relationship with government that results in rubber stamping of contracts and not enough due diligence; governments concentrating too much on price and companies like Carillion putting in unrealistic bids ; companies being arrogant about not being allowed to fail and relying on being bailed out ; sheer ministerial incompetence - probably a mixture of all of them.Either way, a ringing endorsement of capitalism