Carillion

Seriously bad news for this is, as the banks effectively pull the plug forcing it into compulsary liquidation. It sounds as though they must have been a totall basket case, however despite numerous profit warnings and changes at the top, Chris Grayling still thought it would a great idea to hand £1.4 billion worth of HS2 work to it.

Its bad for construction as they were in a number of JV's with other contractors, its bad news for the Government as well as HS2 they are on a huge number of infrastructure projects and its bad news of course for its 43,000 employees.

Sounds like they underbid on too many projects in the recession and that has come back to haunt them. I'd also imagine the huge skills shortage in the UK has hit them as well.

I hope nobody on here is either a subby, supplier or employee

Hugh Watt wrote:

Seriously bad news for this is, as the banks effectively pull the plug forcing it into compulsary liquidation. It sounds as though they must have been a totall basket case, however despite numerous profit warnings and changes at the top, Chris Grayling still thought it would a great idea to hand £1.4 billion worth of HS2 work to it.

Its bad for construction as they were in a number of JV's with other contractors, its bad news for the Government as well as HS2 they are on a huge number of infrastructure projects and its bad news of course for its 43,000 employees.

Sounds like they underbid on too many projects in the recession and that has come back to haunt them. I'd also imagine the huge skills shortage in the UK has hit them as well.

I hope nobody on here is either a subby, supplier or employee

How can a company be allowed to run that badly without someone speaking out!!! let alone the government giving them more money after there last financial report.

Still this will be ceased apon by brent as an excuse as to why work wont start now.

"Private sector = good. Public sector = bad."

Carillion is yet another instance that disproves the mantra routinely trotted out.

"Profit = privatised. Losses = nationalised."

Carillion is yet another instance that proves another mantra routinely trotted out.

Do we know how much money Carillion has donated to the Tory Party over the years?

Sir Francis Drake wrote:

Do we know how much money Carillion has donated to the Tory Party over the years?

Carillion Philip Green was appointed as an adviser to Number 10 on corporate responsibility believe it or not!

Dontcha love it when they just chuck out rumours that the collapse was due to underbidding. More like milking the beast for as much as they could in dividends and "bonuses for the executives and shareholders. Then leave the over leveraged mess of a stripped carcass for the taxpayer to pick up once again. How anyone can possibly fail with such huge plum contracts is quite extraordinary.
A bit like all the private care home providers who were only in it to profit from the property boom and then leave stripped carcasses of failing companies.
One day soon, as more giants go to the wall, the truth will out and a whole sea change will happen. Hopefully that will give political power to sequestrate the assets of these profiteers, bung em inside, and ruin the reputation of big private business for a generation. A community of large numbers of people needs planning and producing for need at a decent price, not everything wrapped around the return on capital invested. Capitalism's bad reputation is getting worse by the year. Can't be too much longer now.

Among the many issues wrapped up in this story is the fact that the schools Carillion ran, the hospitals and the prisons will all still have to function. Those ill people will still need treating, those kids will still need teaching and convicts will still need incarcerating so in some shape or form the cost of providing these services and countless others will fall back onto the state.

It's just like the Olympic Security that G4S was supposed to supply. G4S put in their bid, won the contract, took the cash and then failed to provide security at the last moment meaning the army had to step up at short notice and provide the security it was never intended to provide but which it always obviously should have or else the Olympics would have been cancelled.

There was once always the logic behind state provision of anything that these things were too important to be left to the whims of the market and that it was in the national interest to actually control things like our schools, hospitals and prisons, water supply and electricity generation and distribution because, quite simply, the market cannot be trusted.

Well now here we are and even commentators like Robert Peston consider this to be "Carillion’s collapse is the definitive end of Tory and New Labour governments 25-year love affair with private provision of public services".

Well it should be anyway.

They've all been given billions in advance of services rendered, and the government minister has the cheek to say it won't cost the taxpayer anything. It already has, the money has already been filtered out to the shareholders in previous dividends on profits that were fake. As you say, services still have to be provided, and now they are going to have to be paid for twice. Just like the 3 year east railway operator claw back. Corruption on a massive scale. No wonder people are angry.

Most people aren't angry, they have beer, football, x factor, Britain's got talent, bake off, a new apple phone, a new PCP car........

A car that runs on angel dust?

They needed a skills audit, that would have solved all their problems

Sir Francis Drake wrote:

A car that runs on angel dust?

Personal Contract Purchase, or Unicorn dust as it's also known....

Carillon have been well known for underbidding in the Rail Industry also Somerset County Council have had real issues with carillion during construction of their inner relief road, bombarding the council with TV’s as realisation sunk in that they cocked up their tender.

The real problem is limited company law, accounting procedures and even international jurisdictions that are now not fit for purpose for the new capitalism that has no ethics whatsoever. Company after company have just made sure they were in at the ground floor for whatever the price that was going, then followed the like of Maxwell and Leeson in raiding their employees pension funds, leveraging to the hilt and beyond, squirrelling away debt while paying dividends on profits that never existed. It hasn't just been the banks doing it. The government know whats been going on, and IS STILL going on with other large contractors supping off the taxpayer teat, other utilities, and they know it's a huge can of worms that could collapse, and of course will do one day. They'll keep a lid on it as best they can, do the "fast track" "we must make sure this never happens again"thing followed by a dose of long grass enquiry, and a rap on the knuckles for one Baron as he pleads poor health in his Bermudan hell hole. Then they'll just rack up the bill to the future public accounts, in effect do what the private companies are all doing, by which time everyone will have forgotten how that debt got there in the first place. Corrupt as corrupt can be.
They might get away with it, they might not. Nothing is sure these days, nothing.

Carillion has paid ever greater dividends to its shareholders for each of the last 16 years.

The company was worth £60m but had debts of £2bn.

Once it hit the skids it went directly into liquidation missing out the administration process because a "Guilfoyle" took a quick look at the books and saw immediately that there was no viable business there to save.

How could this have been allowed to happen?

Carillion didn't rack up all that debt overnight. It's leaders must have known that they were trading whilst insolvent a very long time ago. Trading whilst insolvent is illegal.

What are the chances that anybody will be imprisoned, or even charged, as a result of this?

Would anybody out there like to predict that they are any greater than zero?

Sir Francis Drake wrote:

Trading whilst insolvent is illegal.

If only it were that simple Frank. And of course, the law is only as effective and fair as the people administering and crafting it. Then there's different rules for different people.
I suppose a credible defence could be the whole capitalist world trades on massively leveraged make believe assets with Trump just about to pour boiling oil onto the fire to the tune of trillions, so what the heck. It's not really fraud on a massive scale, just following the needs of capital, or as we and HMRC used to rightly call it before the PC bunch started changing our language, unearned income.

Of course, different rules apply when it's a disabled soul looking for 50 quid of paid support. Then all of a sudden, there's no money, and the world will cave in if there's one hospital bed free for an hour.
I see the government are already quoted as saying "they're worried about where the bodies are buried" As if they don't already know. Faux concern for public consumption. Like a corny Brian Rix farce at the Whitehall.

I see Carrillion's clone Capita are now showing the first signs of chucking in the towel, or at the very least, looking for a crutch now they've seen how easy it is to drop the ball without personal fiscal loss. All part of the "too big to fail" routine rip off.
Couldn't be happening to a nicer company, what with their parking violation strategies among many other things.
Their boss man says they have had "too much focus on short termism" and have been "underbidding". Now where have I heard that beffore. That'll be code for the same old excessive dividend payments on fake overstated profits. It's all the rage, less risky than bank robbing, and the preferred method of getting the hell out with yer booty and bonuses. Naughty naughty, but they don't care. It's an easy mark these days until people finally clock what's going on and punish them.