IT’S shocking to hear that Carillion have gone into liquidation, and frightening to hear that their pension fund is in the red to the tune of nearly £600m.
I really liked their 1985 hit
. Perhaps they wouldn’t be in this situation if they hadn’t agreed to such large retirement payments for former lead singer Fish and...Marillion? Oh, right – I see what happened there. The band build monolithic brooding rock songs, and the construction giant has it’s fingers in a worryingly large number of pies, but forgot to keep an eye on the piggy bank.
With 20,000 staff in the UK alone, and over twice that worldwide, their financial meltdown is a huge concern for their many employees. It’s a big worry for the rest of us too, as it looks like we’ll be “doing a banks” again, and bailing them out of the £1.5bn hole they’ve dug themselves into.
As their portfolio includes contracts for services such as hospital and prison maintenance, and cleaning and dinners in schools, the government have stepped in to ensure employees are paid.
With 450 government contracts, including a £1.4bn joint venture for the HS2 rail project, and maintaining the homes of 50,000 military personnel, the gigantic organisation will now have it’s future decided by a court-appointed official receiver. Don’t expect it to get resolved quickly – it will take a large team of experts months to figure this one out. Much like me trying to use most car park ticket machines.
At least I only inconvenience a couple of people behind me in the queue (and generally lose 50p) when I get it wrong. Carillion have thousands of current and former staff who need pension payments, which may now need covering by the Pension Protection Fund. Some of their public service contracts may need to be taken in-house by the government, along with the necessary employees.
Other companies working in a consortium with the failed giant may take on their staff too, but what about the worried companies in the supply chain who are owed money? What about the loss-making public contracts; will the government have to nationalise them to get the job done?
Which leads us to the inevitable, depressing, conclusion - we’ll all be paying for this building firm’s falling-down. As if that very bitter bill wasn’t hard enough to swallow, we’ll get to wash it down with the fact that eight contracts were awarded to the company after profit warnings had been issued. By the government. Yes – they chucked (your) money into a failing venture, and will now want some more to fix the whole mess and keep important services running, and essential projects under way.
Cabinet ministers had a Cobra crisis meeting on Monday about keeping vital public services going.
Meanwhile, the House of Commons Public Administration Committee launched an enquiry into government outsourcing.
On the up-side, we’ve got something else to grumble about now other than Brexit and the weather.
Marillion’s
contains the line “Is it too late to say I’m sorry?” For Carillion, it definitely is.
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