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27/02/2018
Unite Slams Govt For 'Selling Out' Carillion Supply Chain
Union Unite has hit out at the Government for 'selling out' Carillion's sub-contractors and supply chain.
The accusation comes after a hearing of the Public Accounts and the Public Administration and Constitutional Affairs Committee today, 27 February.
MP's heard evidence from former Carillion directors that from October last year, the government was receiving weekly updates of Carillion's financial health, including the company's cash flow.
As Ministers began planning for the firm's eventual collapse, the Department of Transport signed a contract on 06 November for the electrification of the London to Corby train line.
However, Unite said Carillion did not normally pay invoices for 120 days, therefore the vast majority of the work undertaken by the company's sub-contractors was not paid, even after the government was fully aware of the company's financial situation.
In addition, it emerged Ministers were told in mid-December that any sub-contractors owed money would only receive a penny in the pound if the company collapsed.
The hearing also revealed last year Carillion lobbied Liam Fox, the Secretary of State for International Trade, to try and help recoup money owed to them from projects in Qatar and Oman.
Unite's national officer for construction, Jerry Swain, said the fact that the government knew of Carillion's financial situation, while also planning for a post-Carillion world without warning its supply chain, is a "total abdication of responsibility".
"We now know Carillion resorted to begging Liam Fox to act as its debt collector in the Middle East," he said.
"This is more like something from a second rate Carry On script, than the sensible financial strategy one would expect of a multinational company.
"The selling out of sub-contractors and the supply chain, has led to workers losing their jobs and company's going to the wall. This has caused enormous damage to the construction industry which it will take years to recover from. How on earth did the Department of Transport ever think it was a good idea to continue to award contracts to Carillion, when the company was clearly on life-support."
(LM/MH)
The accusation comes after a hearing of the Public Accounts and the Public Administration and Constitutional Affairs Committee today, 27 February.
MP's heard evidence from former Carillion directors that from October last year, the government was receiving weekly updates of Carillion's financial health, including the company's cash flow.
As Ministers began planning for the firm's eventual collapse, the Department of Transport signed a contract on 06 November for the electrification of the London to Corby train line.
However, Unite said Carillion did not normally pay invoices for 120 days, therefore the vast majority of the work undertaken by the company's sub-contractors was not paid, even after the government was fully aware of the company's financial situation.
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In addition, it emerged Ministers were told in mid-December that any sub-contractors owed money would only receive a penny in the pound if the company collapsed.
The hearing also revealed last year Carillion lobbied Liam Fox, the Secretary of State for International Trade, to try and help recoup money owed to them from projects in Qatar and Oman.
Unite's national officer for construction, Jerry Swain, said the fact that the government knew of Carillion's financial situation, while also planning for a post-Carillion world without warning its supply chain, is a "total abdication of responsibility".
"We now know Carillion resorted to begging Liam Fox to act as its debt collector in the Middle East," he said.
"This is more like something from a second rate Carry On script, than the sensible financial strategy one would expect of a multinational company.
"The selling out of sub-contractors and the supply chain, has led to workers losing their jobs and company's going to the wall. This has caused enormous damage to the construction industry which it will take years to recover from. How on earth did the Department of Transport ever think it was a good idea to continue to award contracts to Carillion, when the company was clearly on life-support."
(LM/MH)
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