# Can we talk about Carillion



## gawkrodger (Jan 13, 2018)

Carillion, the second largest construction company in the UK and a massive outsourcing company is on the verge of going under

The company that runs Britain is near to collapse. Watch and worry | Aditya Chakrabortty

Carillion crisis looms for government as time runs out for refinancing deal

Carillion in crisis as outsourcing operation crumbles under debt

Critical construction industry watchers have been saying how screwed the UK construction industry is, and plenty of people have been banging on about Carillion being a walking disaster zone for the past 3-4 years (if not longer). As the Chakrabortty piece (first Grauinaid link) stresses, it's mad that despite the state of Carillion being common industry knowledge, the govt. has kept on handing over contract after contract.

As it's now 'too big to fail', and will royally fuck the government it it does so (and could be a potential recession trigger) I suspect we will see a state bailout by Tuesday/Wednesday.


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## Pickman's model (Jan 13, 2018)

I hoped the last line was going to be funeral


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## 1927 (Jan 13, 2018)

The market value of the entire company is £60m right now, the government should nationalise the fucking thing. long term it would save the taxpayer a friggin fortune. Thats very simplistic i know, but it would.


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## 1927 (Jan 13, 2018)

More likely a foreign company will come in and buy them, the uk government will give them loads of cash to save company, they'll slash layers of managemen and make loads of redundancies, strip out what they want, then let the company fail anyway.


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## weepiper (Jan 13, 2018)

They owe hundreds of millions of pounds to... *drum roll*... Can you guess?


RBS and Lloyd's.
Lloyds, RBS Bad-Loan Surge Is Said to Be Driven by Carillion


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## DotCommunist (Jan 13, 2018)

annoyingly I keep reading this as Marillion and going 'cayliegh, is it to late to say I'm sorry, maybe we can get back together again'.


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## toblerone3 (Jan 13, 2018)

state bailout. Might as well nationalise it.


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## SaskiaJayne (Jan 13, 2018)

The Tories are so fuckin finished.


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## weltweit (Jan 13, 2018)

Vince Cable was on the radio earlier saying that the taxpayer shouldn't take all of the hit, that the shareholders and banks should take the brunt of it.


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## 1927 (Jan 13, 2018)

weltweit said:


> Vince Cable was on the radio earlier saying that the taxpayer shouldn't take all of the hit, that the shareholders and banks should take the brunt of it.



Does he know how shareholding works?

Shareholders will take a hit by the fact that the company is worthless and they paid a fortune for their shares, they have no other liability. If the banks take a hit, as pointed out above, the tax payer will take the hit anyway! He's a clueless fuck.


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## mx wcfc (Jan 13, 2018)

1927 said:


> The market value of the entire company is £60m right now, the government should nationalise the fucking thing. long term it would save the taxpayer a friggin fortune. Thats very simplistic i know, but it would.


I get what you mean but this is

Privatise profit
Nationalise losses.

Not even the Tories will accept that?  Will they?  

Just take the contracts off them and employ their staff.  People keep their jobs, taxpayer keeps their money.  

Another abject failure of capitalism.  Hopefully big enough to bugger up HS2.


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## William of Walworth (Jan 13, 2018)

That Chakrabortty article (just read it) is superb .....


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## 1927 (Jan 13, 2018)

mx wcfc said:


> I get what you mean but this is
> 
> Privatise profit
> Nationalise losses.
> ...



But it would be cheaper to nationalise the entire company, although they take on the debts it might actually be cheaper than the total reorganisation needed.


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## mx wcfc (Jan 13, 2018)

1927 said:


> But it would be cheaper to nationalise the entire company, although they take on the debts it might actually be cheaper than the total reorganisation needed.



Neither of us know about the inner workings of this, but if "we" nationalise Carillion, we (taxpayers) will end up with the debt.  If the state just takes back the contracts, we don't get the debt.  The work involved in the contracts needs to be done so the state is going to have to take it over (so people should keep their jobs) - but the state does not have to take over the debt that Carillion has.  

I think.


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## Ground Elder (Jan 13, 2018)

> annoyingly I keep reading this as Marillion and going 'cayliegh, is it to late to say I'm sorry, maybe we can get back together again'.



More annoyingly, so will we all now


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## 1927 (Jan 13, 2018)

mx wcfc said:


> Neither of us know about the inner workings of this, but if "we" nationalise Carillion, we (taxpayers) will end up with the debt.  If the state just takes back the contracts, we don't get the debt.  The work involved in the contracts needs to be done so the state is going to have to take it over (so people should keep their jobs) - but the state does not have to take over the debt that Carillion has.
> 
> I think.


But the taxpayer owns the banks anyway, so we still pick up the debt, and to take over contracts in a piece meal basis might actually be more costly than keeping the company going with the debt as a going concern, albeit it in public ownership.


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## mx wcfc (Jan 14, 2018)

1927 said:


> But the taxpayer owns the banks anyway, so we still pick up the debt, and to take over contracts in a piece meal basis might actually be more costly than keeping the company going with the debt as a going concern, albeit it in public ownership.


How much of the banks do we still own though?  I don't think it's a lot.


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## Celyn (Jan 14, 2018)

DotCommunist said:


> annoyingly I keep reading this as Marillion and going 'cayliegh, is it to late to say I'm sorry, maybe we can get back together again'.



Yes, and what a bloody horrible song. BUT, I was only vaguely aware of it at the time, it being on radio, I suppose, but now I went to find out about it and found it be on Top of the Pops. 


Hell! Never saw it before.

It is so dire, utterly horrible, vile, lacking in adjectives to be enough bad.


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## coley (Jan 14, 2018)

1927 said:


> The market value of the entire company is £60m right now, the government should nationalise the fucking thing. long term it would save the taxpayer a friggin fortune. Thats very simplistic i know, but it would.


But how many 'directorships' would be lost?


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## coley (Jan 14, 2018)

weltweit said:


> Vince Cable was on the radio earlier saying that the taxpayer shouldn't take all of the hit, that the shareholders and banks should take the brunt of it.



First sensible utterance from Cable...ever...


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## coley (Jan 14, 2018)

mx wcfc said:


> I get what you mean but this is
> 
> Privatise profit
> Nationalise losses.
> ...



Not if they nationalise it properly, E.g. Give them a quid, write off all executive pensions redundancies golden   Farewells ect.
Taking on the existing workforce shouldn't be a problem,  as Carillion will have employed them on the meanest terms available, even an emergency terms of employment will probably be a big  improvement on their current TOE.
Let's hope it hope  it will bury HS


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## Smoking kills (Jan 14, 2018)

This is going to hit sub-contractors hardest, whichever way the banks, accountants and share holders dismember the corpse. As usual.


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## existentialist (Jan 14, 2018)

1927 said:


> More likely a foreign company will come in and buy them, the uk government will give them loads of cash to save company, they'll slash layers of managemen and make loads of redundancies, strip out what they want, then let the company fail anyway.


2 ripoff failures for the price of...well, 2. I could see that happening


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## existentialist (Jan 14, 2018)

1927 said:


> More likely a foreign company will come in and buy them, the uk government will give them loads of cash to save company, they'll slash layers of managemen and make loads of redundancies, strip out what they want, then let the company fail anyway.


Also, they'll gut the pension fund, just to make sure as much of the pain as possible is inflicted on the non-fat cats.


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## Celyn (Jan 14, 2018)

coley said:


> First sensible utterance from Cable...ever...


Yeah, and at this time the LibDems are not the ones shoring up a Tory Government. This must be SO much fun for the Lib Dems.
I don't forget, though.


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## yield (Jan 14, 2018)

mx wcfc said:


> How much of the banks do we still own though?  I don't think it's a lot.


RBS over 70%. Lloyds bank was fully privatised last year


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## alex_ (Jan 14, 2018)

coley said:


> First sensible utterance from Cable...ever...



The shareholders have already taken a bath - the share price is already down 15x in a year.


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## cupid_stunt (Jan 14, 2018)

weepiper said:


> They owe hundreds of millions of pounds to... *drum roll*... Can you guess?
> 
> 
> RBS and Lloyd's.
> Lloyds, RBS Bad-Loan Surge Is Said to Be Driven by Carillion



Lloyds is back in private hands & it looks like RBS is a fairly small lender, according to one of the links in the OP,  Carillion’s main lenders are Barclays, HSBC and Santander.


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## SaskiaJayne (Jan 14, 2018)

The down the pan they go option would include massive losses for banks & Tory voting shareholders. Small subcontractors owned by Tory voting Charlie Mullins types would not get paid & probably go bust. Pension fund tab would have to be partially picked up by pension protection fund. Existing workers could be re employed as public sector workers doing same jobs. Is that right?

 Is there a way of resolving this that would actually benefit ordinary taxpayers in the long term by bringing privatised services back into public ownership?

I think the problem here is that there are wheels within wheels at work that the general public can never hope to understand. There will be no good ending except where people who caused this & have profited massively lose everything they have personally made out of this which won’t happen.


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## 8115 (Jan 14, 2018)

Dividends being paid to shareholders as recently as last year, apparently.


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## 1927 (Jan 14, 2018)

coley said:


> First sensible utterance from Cable...ever...


Explain how shareholders will take any hit?


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## cupid_stunt (Jan 14, 2018)

1927 said:


> Explain how shareholders will take any hit?



For any shareholders from 2 years ago, they have basically almost loss everything already, back then shares were £3.00 & company was valued at £2bn, as of Friday the share price was just over 14p, valuing the company at only £60m.


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## Poot (Jan 14, 2018)

People seem to be separating this into 'Fat Cat Tory-voting shareholders' and 'blameless taxpayers picking up the tab' but please remember that there are swathes of folk who are working, or have worked to the best of their ability for this company for all of their working life - when it was Tarmac too - and are proud of their work. Some of them, believe it or not, have an emotional investment. I am related to one and I want the best for those people, too, as well as the countless subbies who will no doubt be treated like shit yet again.


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## 1927 (Jan 14, 2018)

cupid_stunt said:


> For any shareholders from 2 years ago, they have basically almost loss everything already, back then shares were £3.00 & company was valued at £2bn, as of Friday the share price was just over 14p, valuing the company at only £60m.


I understand that! But they can’t be made to take anymore of a hit. 

Maybe I’ve misinterpreted Cable’s comments!


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## 1927 (Jan 14, 2018)

Poot said:


> People seem to be separating this into 'Fat Cat Tory-voting shareholders' and 'blameless taxpayers picking up the tab' but please remember that there are swathes of folk who are working, or have worked to the best of their ability for this company for all of their working life - when it was Tarmac too - and are proud of their work. Some of them, believe it or not, have an emotional investment. I am related to one and I want the best for those people, too, as well as the countless subbies who will no doubt be treated like shit yet again.


You give  the impression that the subbies are small companies.

Carillion  isn’t so much a construction company as a management company! I’d be very surprised if they employ any tradesman directly. All the work they do is carried out by subbies and many of those will be themselves large companies. But I get your point they will be shafted however big they are.


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## cupid_stunt (Jan 14, 2018)

1927 said:


> I understand that! But they can’t be made to take anymore of a hit.
> 
> Maybe I’ve misinterpreted Cable’s comments!



No more than losing the last 14p per share.


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## 1927 (Jan 14, 2018)

cupid_stunt said:


> No more than losing the last 14p per share.


Of course the knock on effect is that some of the biggest shareholders will be pension funds which again will impact on workers. This isnt just a fat cat problem!


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## Poot (Jan 14, 2018)

1927 said:


> You give  the impression that the subbies are small companies.
> 
> Carillion  isn’t so much a construction company as a management company! I’d be very surprised if they employ any tradesman directly. All the work they do is carried out by subbies and many of those will be themselves large companies. But I get your point they will be shafted however big they are.



Thank you for explaining that to me. I had no idea.


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## 1927 (Jan 14, 2018)

Poot said:


> Thank you for explaining that to me. I had no idea.


Not everyone will know that, why the facepalm!


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## Poot (Jan 14, 2018)

1927 said:


> Not everyone will know that, why the facepalm!


Because you quoted me as though you were responding to me. 

My point stands. Loads people who work(ed) for Carillion are not directors, they're people on building sites doing jobs. Or in offices doing jobs. They don't deserve this either.


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## SpookyFrank (Jan 14, 2018)

1927 said:


> Maybe I’ve misinterpreted Cable’s comments!



I think it's more a case of Cable chatting shit.


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## existentialist (Jan 14, 2018)

Poot said:


> Because you quoted me as though you were responding to me.
> 
> My point stands. Loads people who work(ed) for Carillion are not directors, they're people on building sites doing jobs. Or in offices doing jobs. They don't deserve this either.


There is probably little that can be done directly, but they may care to consider how all this came about next time they're standing in a voting booth with a pencil in their hand.


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## Poot (Jan 14, 2018)

existentialist said:


> There is probably little that can be done directly, but they may care to consider how all this came about next time they're standing in a voting booth with a pencil in their hand.


Yes. The same as all of us, really. They are all of us - that's what I was trying to say. The person that I was talking about, well, you would really like them. They are very gentle and they like building stuff and their politics are good. There is no divide here, but when I read the thread I thought it sounded like an 'us and them' situation, which made me sad.


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## 1927 (Jan 14, 2018)

If I was a betting man I’d say that Buoyges would be the sort of company that might be interested in Carillion. French owned, where they have a totally different attitude to business funding, already involved in HS2 and expanding in UK right now.


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## binka (Jan 14, 2018)

Been reading a bit about Carillion and it looks like they paid out a dividend in June last year of 12.65 pence per share (which just so happens to be their highest dividend in years) which was about a month before their profit warning and the crash in the value of the shares.

The directors must have known the company was in trouble when the record dividend was being decided. I've seen other people refer to this as an exit dividend - last chance to get paid on a stock you know is worthless (or will be very soon.)

Very much looking forward to the police investigation for fraud


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## binka (Jan 14, 2018)

1927 said:


> If I was a betting man I’d say that Buoyges would be the sort of company that might be interested in Carillion. French owned, where they have a totally different attitude to business funding, already involved in HS2 and expanding in UK right now.


I don't know why any company would want to buy Carillion and it's massive debts rather than just bid for the existing contracts when they go back out to tender.


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## 1927 (Jan 14, 2018)

binka said:


> I don't know why any company would want to buy Carillion and it's massive debts rather than just bid for the existing contracts when they go back out to tender.


There’s a lot of reasons you might do that. Expediency, buying influence, contacts, a ready trained workforce etc. Plus by buying company you take away any doubt that you’ll win the retendered Work. Plus, the sort of contracts they’d get would cost millions just to price.


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## binka (Jan 14, 2018)

1927 said:


> There’s a lot of reasons you might do that. Expediency, buying influence, contacts, a ready trained workforce etc. Plus by buying company you take away any doubt that you’ll win the retendered Work. Plus, the sort of contracts they’d get would cost millions just to price.


I'm not sure all that is worth a billion pounds of debt. Obviously neither of us know without seeing the books so it's probably a pointless conversation anyway. Plus the fact all their contracts will have break clauses in means the best ones could be taken off then anyway


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## 1927 (Jan 14, 2018)

But if they bought the company lock stick and barrel there would be no need for break clauses as it’s the same company essentially. Added to the fact that UK plc can’t afford the risk of work on Carillion contracts to cease as we’d grind to a halt!


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## MrSki (Jan 14, 2018)

yes


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## SpookyFrank (Jan 14, 2018)

It's going to be a cash bailout isn't it? The banks won't take responsibility for lending too much money to a crippled company, nationalisation is a four letter word and Carillion can't be allowed to fail. 

Grayling will keep his job beause May can't afford to do any more fucking about right after a farcical reshuffle. I doubt she's got anyone left in reserve that can spell their own name right at least 50% of the time and doesn't already have a job as minister of something.


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## binka (Jan 14, 2018)

1927 said:


> But if they bought the company lock stick and barrel there would be no need for break clauses as it’s the same company essentially.


Depends if the company goes into administration or not which it surely will if the government doesn't guarantee the funding they're looking for


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## binka (Jan 14, 2018)

SpookyFrank said:


> It's going to be a cash bailout isn't it? The banks won't take responsibility for lending too much money to a crippled company, nationalisation is a four letter word and Carillion can't be allowed to fail.
> 
> Grayling will keep his job beause May can't afford to do any more fucking about right after a farcical reshuffle. I doubt she's got anyone left in reserve that can spell their own name right at least 50% of the time and doesn't already have a job as minister of something.


I think Carillion and the banks are both looking for the government to guarantee the new loans Carillion are looking for. So it may not be funding now but it will be in X months time when the company fuck it all up again


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## existentialist (Jan 14, 2018)

binka said:


> I think Carillion and the banks are both looking for the government to guarantee the new loans Carillion are looking for. So it may not be finding now but it will be in X months time when the company fuck it all up again


I hope that everything possible will be done politically to ensure that a government which has justified repeated brutal assaults on its most vulnerable on the basis that there isn't any money would reap the whirlwind of public fury, if (when) this happens. There should be massive demonstrations, and constant demands to justify baling out banks against leaving ambulances stacked up outside hospitals, doubling the rate of suicide amongst benefits claimants compared to the general population, and selling our children's education down the river. 

Will it happen? It could, but...well, it should already, but nothing has changed yet. 

Maybe Carillion might be the bale of straw that breaks the camel's back.


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## Brainaddict (Jan 14, 2018)

Is this a sign of a deeper malaise in the construction industry? If so I'm beginning to wonder if we are all fucked. The economy of London appears to hang on the slender threads of the finance industry and house price inflation, plus the even more slender threads of software development and construction. It seems to me only one of these needs to go for a downward spiral to be sparked off. The economy in much of the rest of the UK is already a basket case of course, so if London's economy goes there isn't too much left.


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## alex_ (Jan 14, 2018)

SaskiaJayne said:


> The down the pan they go option would include massive losses for banks & Tory voting shareholders. Small subcontractors owned by Tory voting Charlie Mullins types would not get paid & probably go bust. Pension fund tab would have to be partially picked up by pension protection fund. Existing workers could be re employed as public sector workers doing same jobs. Is that right?
> 
> Is there a way of resolving this that would actually benefit ordinary taxpayers in the long term by bringing privatised services back into public ownership?
> 
> I think the problem here is that there are wheels within wheels at work that the general public can never hope to understand. There will be no good ending except where people who caused this & have profited massively lose everything they have personally made out of this which won’t happen.



Shareholders will include pension funds so everyone, Shareholders getting fucked has already happened look at the share price - there is no “if” here.

The public sector doesn’t have the skills to insource this anymore.

Alex


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## binka (Jan 14, 2018)

alex_ said:


> Shareholders will include pension funds so everyone, Shareholders getting fucked has already happened look at the share price - there is no “if” here.
> 
> The public sector doesn’t have the skills to insource this anymore.
> 
> Alex


I would have thought the big institutional share holders like pension funds would have got out by now. Surely the only ones still holding Carillion shares are the speculators who think it's too big/important to fail and have gambled that government support will save the company and bring the share price back up for a quick profit


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## StoneRoad (Jan 14, 2018)

Carillion's debts are in two fields. Firstly, the operational type (owed to suppliers / subbies etc) and secondly the black hole in their own pension funds.

What makes the first type is the problem of your clients not paying up "on time" - and even that is something a farce (at one point, you were lucky if certain big clients would pay on 90 days, and that situation isn't getting any better) but you still have to pay wages, subbies and suppliers, thus the factor borrowing money "to live". Another factor is a contract that is "underpriced" ... although Carillion don't usually get caught that way. Not to mention paying large, unwarranted, dividends and massive fees to consultants and directors.

Second Problem - the pensions fund. If a company has a deficit in this, they have to pay a lump sum into the government's "pension insurance" on a graduated scale. However, the larger your hole, the higher the fee - which creates yet another cost.

I hope that I've got the above right (I'm working from memory)


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## Badgers (Jan 14, 2018)

Options... 

1. Some sort of government (tax payer) backed loan 
2. Tax payer bailout 
3. Let them go down


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## teqniq (Jan 14, 2018)

Think it's likely to be option 2. We, the tax-payers pick up the tab. Isn't capitalism just great?



> ...But the banks, headed by HSBC, Barclays and Santander, have yet to agree on a restructuring plan and are understood to be reluctant to pour in new funding unless Downing Street takes part in a bailout....



Carillion crisis: UK government locked in last-ditch rescue talks


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## DotCommunist (Jan 14, 2018)

time to hew a few more limbs from the magic money tree lol


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## Badgers (Jan 14, 2018)

Bail out greedy failing company and sanction the sick and poor. Usual shit from this cesspit government.

Nationalising Carillion would be a good start but it ain't gonna happen.


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## cupid_stunt (Jan 14, 2018)

Let them go into administration, buy it cheap from the administrators & fuck the banks over, would be my preferred option.


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## existentialist (Jan 14, 2018)

cupid_stunt said:


> Let them go into administration, buy it cheap from the administrators & fuck the banks over, would be my preferred option.


I wonder if this could be 2008 all over again, and the hit the also "too big to fail" banks would take as a result would necessitate the taxpayer baling THEM out. Again.


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## cupid_stunt (Jan 14, 2018)

existentialist said:


> I wonder if this could be 2008 all over again, and the hit the also "too big to fail" banks would take as a result would necessitate the taxpayer baling THEM out. Again.



No, the banks are 'only' at risk for about £1bn, spread across at least 5 banks, 4 in totally private hands, and RBS exposed for about £150m, the banks can take the hit easily.


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## binka (Jan 14, 2018)

Was just doing some reading on this and here is a Financial Times article from last April (before the profit warning):

Subscribe to read



> Carillion, a construction and support services group, has been the most popular stock for hedge funds to sell “short” on the UK market for 18 months.
> 
> In that time the share price has dropped more than a quarter, handing large profits to the investors, yet 16 funds still have in place short positions that are large enough to require public disclosure.



So the big boys had been shorting the stock for 18 months up to that point. Shorting is where someone else loans you the shares, you sell them and then plan to buy them back at a lower price to return to the owner - basically it means making money off a falling stock price.

So that was April 2017, the massive dividend was paid out in June 2017, then the following happens in July 2017:

Hedge funds pocket Carillion windfall after profit warning hits share price



> Hedge funds pocketed huge windfalls yesterday after more than £300m was wiped off Carillion’s stock market value on Monday as the building contractor warned on profits, axed its dividend and parted company with its chief executive.



So everyone knew it was fucked from at least 2015 by my reckoning. Wonder how many more contracts they 'won' since then? Oh and one of the biggest shorters was Blackrock - about the time of the first article they started employing George Osborne for £650k per year.


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## 1927 (Jan 14, 2018)

SaskiaJayne said:


> The down the pan they go option would include massive losses for banks & Tory voting shareholders. Small subcontractors owned by Tory voting Charlie Mullins types would not get paid & probably go bust.


What makes you think that shareholders only vote Tory? AS already outlined the shareholders are likely to be in the main large pension companies across a whole range of sectors. The shareholders are not Tory voting on the whole, they are normal men and women who have put money away every month via company and private pension schemes which will now see a downfall in income to pay out, so everyone loses here.


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## binka (Jan 14, 2018)

1927 said:


> What makes you think that shareholders only vote Tory? AS already outlined the shareholders are likely to be in the main large pension companies across a whole range of sectors. The shareholders are not Tory voting on the whole, they are normal men and women who have put money away every month via company and private pension schemes which will now see a downfall in income to pay out, so everyone loses here.


I very much doubt the current shareholders are pension schemes, they'll be speculators trying to 'catch a falling knife'


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## 1927 (Jan 14, 2018)

Badgers said:


> Options...
> 
> 1. Some sort of government (tax payer) backed loan
> 2. Tax payer bailout
> 3. Let them go down


Or 4. a white knight company agrees to buy out the company and keep it running for time being on basis that they get funding from government and probably bring forward payments on some PFI contracts. Then once dust has settled they rape the company of what they want making thousands of redundancies and selling off bits they don't want, and then fuck iff back to France to count the millions they have screwed out of the UK taxpayer.


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## 1927 (Jan 14, 2018)

binka said:


> I very much doubt the current shareholders are pension schemes, they'll be speculators trying to 'catch a falling knife'


I guess so, but they've already taken a hit, so my point still sort of stands, the cost hasn't just been bourne by Tory voting fat cats!


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## binka (Jan 14, 2018)

1927 said:


> I guess so, but they've already taken a hit, so my point still sort of stands, the cost hasn't just been bourne by Tory voting fat cats!


Pension funds will be well diversified and they would have more than made up for any loss on Carillion in other investments - FTSE has been hitting record highs recently. I wouldn't really worry about the pension funds that invested in Carillion shares, it's the employees pensions we should be worried about


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## 1927 (Jan 14, 2018)

cupid_stunt said:


> Let them go into administration, buy it cheap from the administrators & fuck the banks over, would be my preferred option.


Not that easy tho is it. The banks will get something, even if its pennies in £, the people that walk away with most will be the administrators and consultants tat have to sort out the mess, plus they won't be any money for redundancy payments. Better all round to try and keep it going somehow.


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## agricola (Jan 14, 2018)

cupid_stunt said:


> No, the banks are 'only' at risk for about £1bn, spread across at least 5 banks, 4 in totally private hands, and RBS exposed for about £150m, the banks can take the hit easily.



FWIW there is a massive systemic risk that has been once again highlighted here - this is another example of an Big Four audited company (in this case Carillion was, at least in its most recent report (page 61-64) audited by two of them - KPMG (external audit) and Deloitte (internal audit)) that has had its books polished up, shined and basically fictionalized.  

If you look at nearly all recent financial scandals, the common denominator is that dangerous / bad / illegal behaviour is going on and that the auditors have been well paid but have failed to report it - except in ways that can be used as a defence in court cases years after the event.  That a third of the four is now going to make money out of it as well is obscene.


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## Bahnhof Strasse (Jan 14, 2018)

agricola said:


> FWIW there is a massive systemic risk that has been once again highlighted here - this is another example of an Big Four audited company (in this case Carillion was, at least in its most recent report (page 61-64) audited by two of them - KPMG (external audit) and Deloitte (internal audit)) that has had its books polished up, shined and basically fictionalized.
> 
> If you look at nearly all recent financial scandals, the common denominator is that dangerous / bad / illegal behaviour is going on and that the auditors have been well paid but have failed to report it - except in ways that can be used as a defence in court cases years after the event.  That a third of the four is now going to make money out of it as well is obscene.



And therein lies the problems with auditing companies both large and small, the company being audited is also the customer of the auditor, so there will always be a massive conflict of interest.


----------



## agricola (Jan 14, 2018)

Bahnhof Strasse said:


> And therein lies the problems with auditing companies both large and small, the company being audited is also the customer of the auditor, so there will always be a massive conflict of interest.



Or as the latest Eye points out - the auditor is employed by the company, and the government the company the company is doing business with.


----------



## equationgirl (Jan 14, 2018)

mx wcfc said:


> Neither of us know about the inner workings of this, but if "we" nationalise Carillion, we (taxpayers) will end up with the debt.  If the state just takes back the contracts, we don't get the debt.  The work involved in the contracts needs to be done so the state is going to have to take it over (so people should keep their jobs) - but the state does not have to take over the debt that Carillion has.
> 
> I think.


It's going to depend on how the contracts are set up, and the penalty clauses for terminating them. They might have used what's called the NEC3 Contracts, which are nationally agreed template sets and can be tailored using various optional clauses depending on the job being covered. If something more bespoke was used, drafted between the parties then it could be more complex. 

Either way, the taxpayer could be paying out.


----------



## rubbershoes (Jan 14, 2018)

I hope the directors get their bonuses


----------



## alex_ (Jan 14, 2018)

rubbershoes said:


> I hope the directors get their bonuses



... Paid in shares


----------



## existentialist (Jan 14, 2018)

alex_ said:


> ... Paid in shares


Etched onto paving slabs. Slung around their necks.


----------



## Sasaferrato (Jan 14, 2018)

Ground Elder said:


> More annoyingly, so will we all now



Just put it on. It is good.


----------



## mx wcfc (Jan 14, 2018)

equationgirl said:


> It's going to depend on how the contracts are set up, and the penalty clauses for terminating them. They might have used what's called the NEC3 Contracts, which are nationally agreed template sets and can be tailored using various optional clauses depending on the job being covered. If something more bespoke was used, drafted between the parties then it could be more complex.
> 
> Either way, the taxpayer could be paying out.


I don't disagree that the taxpayer will get shafted, but if Carillion goes under, then it will be Carillion that is in breach of contract, and the taxpayer shouldn't get hit by any penalties.

That is obviously a simplistic approach.  I expect it is more complex.


----------



## 1927 (Jan 14, 2018)

`Evidently if Carillion goes pop by the morning there are 32000 school kids who wont be getting g school meals tomorrow, i dare say there are similar contracts for providing meals in hospitals and prisons etc. This is the reality of outsourcing public services to the private sector and becoming over reliant on a very small pond of companies. 

Hopefully this will be a water shed moment and the folly of the race to  privatise everything will be exposed for what it is.


----------



## agricola (Jan 14, 2018)

I suppose a follow on question from this is whether or not any individual minister, in the entirity of British political history, has ever had a more spectacular record of failure than Chris Grayling:

*2010-12*:  _Minister of State at the DWP_ - closed jobcentres; promoted the whole-fit-to-work thing;
*2012-15*:  _Justice Minister_ - prison deaths up 38% on his watch, along with increased indiscipline (up 100%), and prisoner self-harm (up 9%); banned books; brought in fees for justice; cut 5000 prison officers; cut legal aid
*2015-16*:  _Leader of the House of Commons_ - brilliantly managed the Commons as it passed the EU Referendum Bill, which took out one PM and will probably destroy at least one more.
*2016 - now*:  _Transport Secretary_ - provoked a series of strikes; threw away hundreds of millions by letting Virgin / Stagecoach off the hook on the East Coast; signed a big deal with Carillion a week after the news broke that they were going bust*; *destroys cyclists


----------



## Idaho (Jan 14, 2018)

Bahnhof Strasse said:


> And therein lies the problems with auditing companies both large and small, the company being audited is also the customer of the auditor, so there will always be a massive conflict of interest.





agricola said:


> FWIW there is a massive systemic risk that has been once again highlighted here - this is another example of an Big Four audited company (in this case Carillion was, at least in its most recent report (page 61-64) audited by two of them - KPMG (external audit) and Deloitte (internal audit)) that has had its books polished up, shined and basically fictionalized.
> 
> If you look at nearly all recent financial scandals, the common denominator is that dangerous / bad / illegal behaviour is going on and that the auditors have been well paid but have failed to report it - except in ways that can be used as a defence in court cases years after the event.  That a third of the four is now going to make money out of it as well is obscene.


No other firms are big enough to audit these companies, so we are stuck with a kind of monopoly. Although now the EU has mandated audit rotation, the profit has dropped out. Companies ask all the big 4 to bid for the audit, but often they bid to lose. If they win they have to dismantle all their lucrative consultancy work and set up a massive, loss leading, low margin audit. 

As to whether auditors knowingly sign off companies that are about to fail.. Difficult to say. Not because they are honest people, but because they have a defined role. So many large companies (especially certain banks) could quickly go underwater with a bit of additional stress.


----------



## existentialist (Jan 14, 2018)

Idaho said:


> No other firms are big enough to audit these companies, so we are stuck with a kind of monopoly. Although now the EU has mandated audit rotation, the profit has dropped out. Companies ask all the big 4 to bid for the audit, but often they bid to lose. If they win they have to dismantle all their lucrative consultancy work and set up a massive, loss leading, low margin audit.
> 
> As to whether auditors knowingly sign off companies that are about to fail.. Difficult to say. Not because they are honest people, but because they have a defined role. So many large companies (especially certain banks) could quickly go underwater with a bit of additional stress.


Perhaps the first thing to nationalise would be the auditing sector. It could become an arm of HMRC quite reasonably...assuming HMRC was actually staffed by people competent to do the job, which is a whole other question.


----------



## Bahnhof Strasse (Jan 14, 2018)

existentialist said:


> Perhaps the first thing to nationalise would be the auditing sector. It could become an arm of HMRC quite reasonably...assuming HMRC was actually staffed by people competent to do the job, which is a whole other question.



IME HMRC staff are very competent and nice and helpful, their numbers have been slashed in recent years so it is not possible to run it though, tax has become almost voluntary.

Nationalising audting is needed if it is to be meaningful for unless blatant, in your face criminality shows up then a business will always be
given the green light or else the bill won’t get paid.


----------



## existentialist (Jan 14, 2018)

Bahnhof Strasse said:


> IME HMRC staff are very competent and nice and helpful, their numbers have been slashed in recent years so it is not possible to run it though, tax has become almost voluntary.
> 
> Nationalising audting is needed if it is to be meaningful for unless blatant, in your face criminality shows up then a business will always be
> given the green light or else the bill won’t get paid.


Competent they may be, but not to the standard I experienced 20 years ago when last running a business. Then, they'd actually give advice, and you didn't have to shoehorn your way three levels up the hierarchy who could talk in anything other than a mouthbreathing "computer says no" script.


----------



## agricola (Jan 14, 2018)

existentialist said:


> Perhaps the first thing to nationalise would be the auditing sector. It could become an arm of HMRC quite reasonably...assuming HMRC was actually staffed by people competent to do the job, which is a whole other question.



Perhaps, though that might just end up with almost everything being offshored so the "national" audit would only capture the local company, not its much larger parent.  

I'd rather see more openness in publicly listed firms - on a twice-yearly (or yearly at the most) basis publishing (in easily accessable, online and free format) audits setting out what a firms actual liabilities, assets, sales, wage and renumeration structures, tax structures etc are so that investors, citizens, governments and other firms can work out what sort of health that firm is in for themselves.  In the short term this would probably result in chaos, but as time went on you'd see confidence go up because everyone would know what everyone else was up to, and it would be much harder to hide scandals / thefts / collossal overpayment because everyone would see it.  It would also remove much of the very real incentives that exist now to hide underperformance / malpractice.

Obviously if the audit turned out to be fraudulent, or incompetently completed, then the audit firm could be gone after as well as the client firm itself.


----------



## alex_ (Jan 14, 2018)

1927 said:


> `Evidently if Carillion goes pop by the morning there are 32000 school kids who wont be getting g school meals tomorrow, i dare say there are similar contracts for providing meals in hospitals and prisons etc. This is the reality of outsourcing public services to the private sector and becoming over reliant on a very small pond of companies.
> 
> Hopefully this will be a water shed moment and the folly of the race to  privatise everything will be exposed for what it is.



There are 8.2 million kids attending 24,000 schools in the uk. Carillion are providing school dinners for 0.4% of the uk school population - this is hardly a crisis.

I suspect some dinner ladies will get tupied onto school payrolls and things will continue as normal.

Alex


----------



## 1927 (Jan 14, 2018)

..


----------



## cupid_stunt (Jan 15, 2018)

BBC News reporting they have now gone into compulsory liquidation, instead of administration.

Carillion to enter liquidation after unsuccessful talks with the government



> Carillion has announced it will enter compulsory liquidation with immediate effect after rescue talks with the government over the weekend were unsuccessful.
> 
> The company said: "An application was made to the High Court for a compulsory liquidation of Carillion before opening of business today and an order has been granted to appoint the Official Receiver as the liquidator of Carillion.
> 
> ...



However:



> We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.


----------



## danny la rouge (Jan 15, 2018)

Carillion to go into liquidation Carillion to go into liquidation


----------



## Ponyutd (Jan 15, 2018)

Administration or liquidation


----------



## cupid_stunt (Jan 15, 2018)

Ponyutd said:


> Administration or liquidation



Liquidation.

Live updates - Business Live: Carillion reaction

And - Carillion goes into liquidation after last-ditch talks fail - live updates


----------



## Badgers (Jan 15, 2018)

Shareholders walk off into the sunset...


----------



## cupid_stunt (Jan 15, 2018)

Badgers said:


> Shareholders walk off into the sunset...



...having lost everything.


----------



## existentialist (Jan 15, 2018)

cupid_stunt said:


> ...having lost everything.


Ah well, them's the breaks. 

*shrugs* *moves on*

The employees, and pensioners, OTOH...


----------



## alex_ (Jan 15, 2018)

existentialist said:


> Ah well, them's the breaks.
> 
> *shrugs* *moves on*
> 
> The employees, and pensioners, OTOH...



It does rather make the point that these privatisation specialists aren’t exactly making money hand over fist out of the government.

Alex


----------



## alex_ (Jan 15, 2018)

Badgers said:


> Shareholders walk off into the sunset...



The share price has fallen to zero - how do you think shares work ?

Alex


----------



## Sue (Jan 15, 2018)

alex_ said:


> It does rather make the point that these privatisation specialists aren’t exactly making money hand over fist out of the government.
> 
> Alex


Does it?


----------



## alex_ (Jan 15, 2018)

Sue said:


> Does it?



Are you saying that Carillion was so profitable that they just went into liquidation ?

Their cash flow problems being that they just had way too much cash ?

Alex


----------



## cupid_stunt (Jan 15, 2018)

Some reports have claimed their problems were with overseas contracts, which suggests they were doing OK in the UK.


----------



## Sue (Jan 15, 2018)

alex_ said:


> Are you saying that Carillion was so profitable that they just went into liquidation ?
> 
> Their cash flow problems being that they just had way too much cash ?
> 
> Alex


Or maybe there was very poor management of the company, such as bidding for risky contracts and paying record dividends as recently, I believe, as last year.


----------



## 1927 (Jan 15, 2018)

cupid_stunt said:


> Some reports have claimed their problems were with overseas contracts, which suggests they were doing OK in the UK.


That’s not totally true. Look at Liverpool hospital contract as a  start!


----------



## Badgers (Jan 15, 2018)

alex_ said:


> The share price has fallen to zero - how do you think shares work ?
> 
> Alex


Those that did not sell as soon as they saw the writing on the wall.


----------



## existentialist (Jan 15, 2018)

Badgers said:


> Those that did not sell as soon as they saw the writing on the wall.


This is just more grist to the mill for the idea that promoting share ownership to "Fred" (yer average citizen, basically) was a rather irresponsible thing for the Tory governments of the 80s and 90s to be doing. Fred did OK when they were undervalued state assets being sold off for a song, but I rather wonder whether those "I'm a shareholder" aspirations are looking quite so one-sided now...


----------



## DownwardDog (Jan 15, 2018)

existentialist said:


> This is just more grist to the mill for the idea that promoting share ownership to "Fred" (yer average citizen, basically) was a rather irresponsible thing for the Tory governments of the 80s and 90s to be doing. Fred did OK when they were undervalued state assets being sold off for a song, but I rather wonder whether those "I'm a shareholder" aspirations are looking quite so one-sided now...



The FTSE 100 has averaged 7% annual growth for the last 100 years and positive growth for 66 of those 100 years. If you buy a secular mix of companies in the index and hold them long term you'll do just fine. It's certainly better than leaving your money in the bank.


----------



## SaskiaJayne (Jan 15, 2018)

Council building works depts built council houses in the 60/70s so I’m sure they can build HS2.


----------



## Idaho (Jan 15, 2018)

Badgers said:


> Those that did not sell as soon as they saw the writing on the wall.


Those that sold, sold to people who bought... Who then lost all that money.


----------



## existentialist (Jan 15, 2018)

DownwardDog said:


> The FTSE 100 has averaged 7% annual growth for the last 100 years and positive growth for 66 of those 100 years. If you buy a secular mix of companies in the index and hold them long term you'll do just fine. It's certainly better than leaving your money in the bank.


That's not what the kind of people who get told by their mates (or the government) that buying some shares is a good thing to do usually do, though. I suspect quite a lot of those who caught the Carillion cold were the kind who thought or were told "Construction. Government contracts. Can't fail", and shoved all their eggs into that one basket.

Anyway, it's academic, because I don't care about them - beyond outright fraud (which Carillion may yet be found to have committed), if you want to play with the big boys, you take the risks.


----------



## Idaho (Jan 15, 2018)

existentialist said:


> This is just more grist to the mill for the idea that promoting share ownership to "Fred" (yer average citizen, basically) was a rather irresponsible thing for the Tory governments of the 80s and 90s to be doing. Fred did OK when they were undervalued state assets being sold off for a song, but I rather wonder whether those "I'm a shareholder" aspirations are looking quite so one-sided now...


To those of us working in jobs that don't have final salary/average salary/defined benefits pensions - we have no choice but to gamble on the stock market with our pension funds.


----------



## existentialist (Jan 15, 2018)

Idaho said:


> To those of us working in jobs that don't have final salary/average salary/defined benefits pensions - we have no choice but to gamble on the stock market with our pension funds.


Hmm. OK, there go my moral certitudes. I've got some investment-based pension stuff, but I went for unit trusts. I decided long ago that I just don't have the kind of organisation or focus to make share ownership worth risking. I did have some Orange ones for a while, but I think they cashed them in and sent me a cheque when it got taken over by someone.


----------



## Idaho (Jan 15, 2018)

Unit trusts are shares


----------



## existentialist (Jan 15, 2018)

Idaho said:


> Unit trusts are shares


Yeah, but my whole point is that, if your share ownership strategy is "Ooh, that looks nice and my mate says it's as safe as houses", and you invest everything in one company (eg Carillion), you could either make out like a bandit, or catch a nasty cold.

If, OTOH, you think "Hmm, I like the way UK construction is going, I shall go and find a reasonably reputable unit trust investing in the sector", you've diversified your risk. First off, your fund manager is likely to notice before you do that Carillion's numbers are starting to smell like last week's haddock, and secondly, even if he doesn't, Carillion isn't going to represent the entirety of your investment.


----------



## Dan U (Jan 15, 2018)

Carillions payment terms were 120 days according to a few reports today.

Firstly that is outrageous and secondly their will be a lot of anxious SME businesses in there supply chain today.

Already seeing reports the well oiled provider failure mechanism is kicking in in local government (councils have a lot of experience in this due to statutory duty to manage provider failures in social care)

Oxfordshire County Council is taking school dinners back in house today.

Be interesting to see how national govt manages all the big stuff.


----------



## existentialist (Jan 15, 2018)

Dan U said:


> Carillions payment terms were 120 days according to a few reports today.
> 
> Firstly that is outrageous and secondly their will be a lot of anxious SME businesses in there supply chain today.
> 
> ...


When I was freelancing, most large companies would try to pull off 90 or 120 days' payment. I learned to stop fighting quite quickly. I upped my prices by 15%, and offered a 5-7.5% "early payment discount" for payment within 30 days. Even then, there were times when accounts departments would attempt to pay on 90 days and claim the fucking discount anyway. I just sent them an arrears reminder. Mostly, they fell in with it, but the whole thing's a bloody try-on


----------



## kebabking (Jan 15, 2018)

is a very reluctant user and buyer of Carillion's services, their business model is to cost a contract, put in a bid 10% or so lower than the cost - let alone cost+profit+contingency - and then a) not provide bits of the contact, and only stump up when they get threatened to be dismissed, b) use very expensive lawyers and contract managers to attempt to get the client to pay extra for stuff that was specified in the original contract, and c) when it (a) and (b) fail, or fail to bring in enough, go cap in hand to the client knowing that the client doesn't (usually) have the ability to either run the job themselves or the systems to appoint another contractor immediately, and hope/expect that the client would prefer to stump up rather than go without the services Carillion provide.

the reason for Carillions 'success' to date has been that they actually employ very few people (relative to the size of their contracts), with pretty much everything actually done by sub-contractors - this however may be the reason they couldn't get a bail out - the clients have wised up that they don't actually need Carillion, they can just cut them out and employ the same sub-contractors doing exactly the same thing.

no loss to the world.


----------



## Smokeandsteam (Jan 15, 2018)

Sue said:


> Or maybe there was very poor management of the company, such as bidding for risky contracts and paying record dividends as recently, I believe, as last year.



There needs to be a public enquiry into the collapse of Carillion.

The enquiry should look at the management of the company, executive pay and shareholder dividends and so on.


But it should also look at the public sector contracting out model in the round (given Carillion's footprint in the NHS, schools, prisons and public sector construction it could start there but should extend to the privatisation of public services in the round). 

We know that low pay and race to the bottom terms and conditions are built into these contracts at the insistence of the Government/public body contracting the work out and that Carillion are happy to operate this. We know that sucessive Governments have turned a blind eye to the blacklisting of trade unionists by Carillion. We also know that many of these contracts are badly conceived by Government and badly tendered by companies seeking to undercut each other meaning work often coming in massively over budget (underwritten by the tax payer), badly done/provided to cut corners and costs and that the entire model is built on a debt/PFI/deferred money bubble. 

There now needs to be a forensic independent analysis of the viability of the model with recommendations to end contracting out. In the interim there should be a halt to contracting out work and existing Carillion contracts bought back in house with a guarantee of no compulsory redundancies for their workforce.


----------



## oddworld (Jan 15, 2018)

My other half works / worked for Carillion. He worked all over Christmas and is owed a fair amount in wages. Not a good start to Monday morning.


----------



## TheHoodedClaw (Jan 15, 2018)

Dan U said:


> Be interesting to see how national govt manages all the big stuff.



Good thing the civil service has nothing much else on the moment.


----------



## Smokeandsteam (Jan 15, 2018)

oddworld said:


> My other half works / worked for Carillion. He worked all over Christmas and is owed a fair amount in wages. Not a good start to Monday morning.



Must be an awful time for him and you. I understand that Carillion staff employed on Government contracts have had their wages guaranteed by the Minister David Liddington.


----------



## oddworld (Jan 15, 2018)

Smokeandsteam said:


> Must be an awful time for him and you. I understand that Carillion staff employed on Government contracts have had their wages guaranteed by the Minister David Liddington.



Thanks , he works under the rail side which may mean something I guess. Who knows? He's heard nothing so far , he's got lots of men ringing him too wondering if they will be paid and if they should go into work.


----------



## Dan U (Jan 15, 2018)

Croydon Council have taken libraries back in  house, terminated contract with Carillion this morning.


----------



## cupid_stunt (Jan 15, 2018)

oddworld said:


> Thanks , he works under the rail side which may mean something I guess. Who knows? He's heard nothing so far , he's got lots of men ringing him too wondering if they will be paid and if they should go into work.



It looks like he/they should be OK, fingers crossed. 



> Its failure means the government will have to provide funding to maintain the public services run by Carillion.
> 
> "All employees should keep coming to work, you will continue to get paid. Staff that are engaged on public sector contracts still have important work to do," said government minister David Lidington.
> 
> ...


----------



## cupid_stunt (Jan 15, 2018)

1927 said:


> That’s not totally true. Look at Liverpool hospital contract as a  start!



You are right, looks like some projects in the UK, as well as those aboard have caused the problem. 



> Its biggest problems were cost overruns on three UK public sector construction:
> 
> 
> The £350m Midland Metropolitan Hospital in Sandwell: opening delayed to 2019 due to construction problems
> ...


----------



## Dan U (Jan 15, 2018)

An interesting detail in some of these contracts, such as the Midland Hospital and the road project in Scotland, the other partners in the consortia have to take up the slack. Some are now reporting potential losses due to taking on a bigger risk share for over runs, penalties etc.


----------



## kalidarkone (Jan 15, 2018)

This will impact massively on the nhs winter crisis. I'm pretty sure elective surgery will be postponed, as In my trust Carillion were responsible for hospital/theatre equipment maintenance, cleaning theatres. As well as patient meals, portering. Shit.


----------



## teqniq (Jan 15, 2018)




----------



## Teaboy (Jan 15, 2018)

oddworld said:


> Thanks , he works under the rail side which may mean something I guess. Who knows? He's heard nothing so far , he's got lots of men ringing him too wondering if they will be paid and if they should go into work.



Must be a very worrying time for you.  There is some information here which may be of help:

Carillion staff and suppliers told to carry on working |  Construction Enquirer

I have to say, I'm very surprised that it has been allowed to fail, but glad government money wasn't used to prop the company up as I have no doubt that would have ended up where the rest of the cash has.


----------



## agricola (Jan 15, 2018)

I do like how after KPMG and Deloitte were responsible* for auditing Carillion, and E&Y were brought in to assist with the attempt to go into administration, it fell to PWC to advise the liquidator.  A full house!

 

* not criminally or morally, of course


----------



## Gromit (Jan 15, 2018)

> Analysis: Simon Jack, BBC business editor
> Damned if they did, damned if they didn't?
> The government refused to insure Carillion's debts, so the banks pulled the plug. If it had offered guarantees to big banks on behalf of a private company it might have been accused of nationalising losses while privatising profits.
> The whole point of having private companies do public work is that they shoulder some of the risk. The truth is the government has been helping out Carillion for a while. Awarding it contracts when it knew it was in trouble raised eyebrows last year.
> ...



Good analysis. 

“nationalising losses while privatising profits”

That’s been going on for too long. Glad someone has finally had the guts to draw a line in the sand. Glad and quite frankly amazed. 

The government tried to help out but safe guarded HS2 on the off chance. 

I’m confused. It sounds like competent people have been dealing with this. I’m not used to seeing this.


----------



## Brainaddict (Jan 15, 2018)

I didn't know Carillion had got into the wider outsourcing business. I wish it were Capita going under. That would make me proper lol.


----------



## Brainaddict (Jan 15, 2018)

Gromit said:


> Good analysis.
> 
> “nationalising losses while privatising profits”
> 
> ...


I imagine the approach to the nitty gritty of contracts would have been led by civil servants rather than government ministers. Contrary to myth there are some competent Sir Humphreys. I'm not saying their competency is always put to good use...


----------



## Smokeandsteam (Jan 15, 2018)

Brainaddict said:


> I didn't know Carillion had got into the wider outsourcing business. I wish it were Capita going under. That would make me proper lol.



You wouldn't 'LOL' if you were one of the thousands who worked for them or a family member did. 

We all know that the senior management of Capita are scum but it's not them who suffer when these models collapse. It's their workforce and those who rely on the services they provide.


----------



## Brainaddict (Jan 15, 2018)

Smokeandsteam said:


> You wouldn't 'LOL' if you were one of the thousands who worked for them or a family member did.
> 
> We all know that the senior management of Capita are scum but it's not them who suffer when these models collapse. It's their workforce and those who rely on the services they provide.


I know such things are stressful, but if people are doing jobs that need to be done they'll generally be kept in those positions one way or another, as will happen with Carillion staff. I don't know if I'd limit the scumminess of Capita just to the senior management either  There's a lot of people doing dirty work in the company.


----------



## Smokeandsteam (Jan 15, 2018)

Brainaddict said:


> I know such things are stressful, but if people are doing jobs that need to be done they'll generally be kept in those positions one way or another, as will happen with Carillion staff. I don't know if I'd limit the scumminess of Capita just to the senior management either  There's a lot of people doing dirty work in the company.



Except whoever takes on these contracts will conclude that greater efficiency measures are requires. Guess what that means....


----------



## Poot (Jan 15, 2018)

It's horrible having this shit hanging over you when you've a job to do, bills to pay and no certainty. My thoughts are with the people at Carillion who are having a shit day. Tens of thousands of them, and I'm quite surprised at the tone of this thread in parts. It's not like anyone's going to be held to account anytime soon. It's just shit all round, really.


----------



## existentialist (Jan 15, 2018)

Poot said:


> It's horrible having this shit hanging over you when you've a job to do, bills to pay and no certainty. My thoughts are with the people at Carillion who are having a shit day. Tens of thousands of them, and I'm quite surprised at the tone of this thread in parts. It's not like anyone's going to be held to account anytime soon. It's just shit all round, really.


TBF, the tone at this thread is (at least implicitly) directed towards the scum at the top who have presided over this disaster. I don't suppose there are many on Urban - if any - who'd be thinking or suggesting that the poor bastards who are employed by (or contracted to) Carillion are in any way responsible for this, nor I imagine are many people wishing that this had happened - merely expressing their disgust and anger at a political and business environment that allows it to.


----------



## SaskiaJayne (Jan 15, 2018)

I suppose any joy expressed in this thread will be because it proves the entire outsourcing model is probably fucked. Any intellectual argument for outsourcing that can be made has to ignore the pigs in trough mentality of those who see only a profit motive rather that anything that might benefit taxpayers.

Longer term there needs to be a return to strong employment law & better pay & conditions rather than some idea that it saves taxpayer money by running the employees ragged.


----------



## agricola (Jan 15, 2018)

Thieves:



> Much of the criticism has centred on Richard Howson, Carillion’s former chief executive from 2012 until a shock profit warning last July resulted in his stepping down.
> 
> Howson earned £1.5m in 2016, including £591,000 in bonuses. He continued to work for the firm until last autumn after stepping down as chief executive and is due to stay on the payroll, receiving his £660,000 salary and £28,000 benefits for another year, until October 2018.
> 
> ...





(edited for spelling)


----------



## Teaboy (Jan 15, 2018)

As I mentioned in another thread I was briefly employed by Carillion when they acquired a company I worked for at the time.  I have to be a bit careful here because there were a lot of confidentiality agreements signed and they may still be in force, needless to say though this hasn't surprised me at all.  The waste was spectacular and there was a lot of money being hived out of the system.


----------



## SpookyFrank (Jan 15, 2018)

agricola said:


> I do like how after KPMG and Deloitte were responsible* for auditing Carillion, and E&Y were brought in to assist with the attempt to go into administration, it fell to PWC to advise the liquidator.  A full house!
> 
> 
> 
> * not criminally or morally, of course



These accountancy firms do seem to be remarkably shit at their jobs. Almost as if the kind of business model you need to become one of only a handful of major players in your sector was inherently at odds with doing stuff properly. 

A more cynical man than me might suggest that, far from being incompetent, the big four had a nice cosy little deal going whereby they allow companies to fail in order to create lucrative asset-stripping opportunities down the line. But then that would be a cartel situation, and I'm sure we all have too much faith in the moral standards of accountants to countenance that possibility.


----------



## Gromit (Jan 15, 2018)

Brainaddict said:


> I imagine the approach to the nitty gritty of contracts would have been led by civil servants rather than government ministers. Contrary to myth there are some competent Sir Humphreys. I'm not saying their competency is always put to good use...


I’ve been the Civil servant in situations like this. 
You try to put in safeguards, the private company moans to the minister that the civil servant is being obstructive, the civil servant is told ‘make it happen’. 
The civil servant expresses concerns to the minister. Told that failure is certain, just a matter of time. 
The civil servant is told make it happen ‘now’. 
Civil servant sighs and signs the approval without the safeguards.


----------



## Gromit (Jan 15, 2018)

Smokeandsteam said:


> You wouldn't 'LOL' if you were one of the thousands who worked for them or a family member did.
> 
> We all know that the senior management of Capita are scum but it's not them who suffer when these models collapse. It's their workforce and those who rely on the services they provide.


Actually I would. At this risk of invoking Godwin’s law... working for Capita is like being a SS officer or an Infantry Soldier working for Hitler in a concentration camp. From the top to the bottom they are still doing the will of evil nazis. I was only following orders is not an excuse.

Capita going under is thatcher dead level of celebration to my mind.


----------



## Idaho (Jan 15, 2018)

SpookyFrank said:


> These accountancy firms do seem to be remarkably shit at their jobs. Almost as if the kind of business model you need to become one of only a handful of major players in your sector was inherently at odds with doing stuff properly.
> 
> A more cynical man than me might suggest that, far from being incompetent, the big four had a nice cosy little deal going whereby they allow companies to fail in order to create lucrative asset-stripping opportunities down the line. But then that would be a cartel situation, and I'm sure we all have too much faith in the moral standards of accountants to countenance that possibility.


You are describing a level of organisation (within the big four) and a level of cooperation (between the big four) that they would dream of, but really can't hope to implement.


----------



## Smokeandsteam (Jan 15, 2018)

Gromit said:


> Actually I would. At this risk of invoking Godwin’s law... working for Capita is like being a SS officer or an Infantry Soldier working for Hitler in a concentration camp. From the top to the bottom they are still doing the will of evil nazis. I was only following orders is not an excuse.
> 
> Capita going under is thatcher dead level of celebration to my mind.



I don't know what you do for a living but in the real world the following applies:

1. Most people don't have the luxury of choosing their employer or the option of exploring the ethics of the employer to ensure that they meet their own stringent moral/political standards. They just need a job.
2. A significant number of people didn't choose Capita - they were transferred in. What would you have them do? Resign?
3. Do your politics preclude you from supporting workers - at Carillion, Capita or anywhere else - if their employer doesn't meet your ethical standards?


----------



## existentialist (Jan 15, 2018)

Teaboy said:


> As I mentioned in another thread I was briefly employed by Carillion when they acquired a company I worked for at the time.  I have to be a bit careful here because there were a lot of confidentiality agreements signed and they may still be in force, needless to say though this hasn't surprised me at all.  The waste was spectacular and there was a lot of money being hived out of the system.


I know of someone who works for Crapita, who would say much the same...


----------



## SpookyFrank (Jan 15, 2018)

existentialist said:


> I know of someone who works for Crapita, who would say much the same...



Hardly surprising. The whole outsourcing model actively encourages shoddy business practices.


----------



## SpookyFrank (Jan 15, 2018)

Gromit said:


> Actually I would. At this risk of invoking Godwin’s law... working for Capita is like being a SS officer or an Infantry Soldier working for Hitler in a concentration camp. From the top to the bottom they are still doing the will of evil nazis. I was only following orders is not an excuse.
> 
> Capita going under is thatcher dead level of celebration to my mind.



Depending on what sector you work in you might have a choice between working for a handful of equally shit employers or no choice at all. And if you are lucky enough work for a relatively decent firm, you still have no say in the matter if they are then subcontracted by a bunch of crooks. Likewise your employers will probably have no choice but to take the work.


----------



## agricola (Jan 15, 2018)

SpookyFrank said:


> These accountancy firms do seem to be remarkably shit at their jobs. Almost as if the kind of business model you need to become one of only a handful of major players in your sector was inherently at odds with doing stuff properly.
> 
> A more cynical man than me might suggest that, far from being incompetent, the big four had a nice cosy little deal going whereby they allow companies to fail in order to create lucrative asset-stripping opportunities down the line. But then that would be a cartel situation, and I'm sure we all have too much faith in the moral standards of accountants to countenance that possibility.



I don't think they deliberately allow companies to fail so they can asset strip them (at least in the way those current guests of Her Majesty, formerly employed by HBOS did), I think its more of a case that they are financially incentivized - both directly in terms of fees and indirectly in that they aren't punished and profit from the administration process - not to see things.


----------



## Ranbay (Jan 15, 2018)

almost 7 years working for them cunts when they bought out our firm.... fuck worst company i EVER worked for.


----------



## Pickman's model (Jan 15, 2018)

It will all end in tears


----------



## Sprocket. (Jan 15, 2018)

Pickman's model said:


> It will all end in tears



And plant machinery auctions.


----------



## Pickman's model (Jan 15, 2018)

Sprocket. said:


> And plant machinery auctions.


*Checks bank a/c*


----------



## Bahnhof Strasse (Jan 15, 2018)

agricola said:


> I don't think they deliberately allow companies to fail so they can asset strip them (at least in the way those current guests of Her Majesty, formerly employed by HBOS did), I think its more of a case that they are financially incentivized - both directly in terms of fees and indirectly in that they aren't punished and profit from the administration process - not to see things.



What does happen though is KPMG will go in to work out how much can be salvaged to pay the creditors, that amount will have an uncanny resemblance to the cost of KPMG's work leaving jack shit for the creditors.


----------



## 1927 (Jan 15, 2018)

Sprocket. said:


> And plant machinery auctions.


They hire pretty much everything. Hire companies have already been on site and reclaimed everything they can today. Subbies have also been on many sites taking everything they can. Carillion employees cant fuel their cars as cards have been blocked, they dont even know if they are still covered by insurance and when the lease companies will arrive to repossess the cars.


----------



## 1927 (Jan 15, 2018)

Dan U said:


> Carillions payment terms were 120 days according to a few reports today.


Asked the boss of one of my clients today if they had lost much as they did work for Carillion just last month, and he said they hadn't lost a penny, and actually made comment that he wished everyone paid as promptly as Carillion.


----------



## teqniq (Jan 15, 2018)

agricola said:


> Thieves:
> 
> 
> 
> ...


Ffs so these scum get to walk away from the wreckage unscathed, where have I heard this story or something in a similar vein before?


----------



## Sprocket. (Jan 15, 2018)

1927 said:


> They hire pretty much everything. Hire companies have already been on site and reclaimed everything they can today. Subbies have also been on many sites taking everything they can. Carillion employees cant fuel their cars as cards have been blocked, they dont even know if they are still covered by insurance and when the lease companies will arrive to repossess the cars.


 
I have spent some happy hours delivering, repairing and collecting plant from such operations in the past. Mostly repairs because as you say they hire in lots of plant and work it to destruction.


----------



## teqniq (Jan 15, 2018)

Carillon bosses face investigation into 'shameful' bid to protect their bonuses before the firm went bust


----------



## gawkrodger (Jan 15, 2018)

binka said:


> So everyone knew it was fucked from at least 2015 by my reckoning. Wonder how many more contracts they 'won' since then? Oh and one of the biggest shorters was Blackrock - about the time of the first article they started employing George Osborne for £650k per year.



Checked earlier and I wrote about Carillion being an example of everything wrong with construction in Sep 2015 and I'm hardly at the centre of the industry


----------



## gawkrodger (Jan 15, 2018)

kebabking said:


> is a very reluctant user and buyer of Carillion's services, their business model is to cost a contract, put in a bid 10% or so lower than the cost - let alone cost+profit+contingency - and then a) not provide bits of the contact, and only stump up when they get threatened to be dismissed, b) use very expensive lawyers and contract managers to attempt to get the client to pay extra for stuff that was specified in the original contract, and c) when it (a) and (b) fail, or fail to bring in enough, go cap in hand to the client knowing that the client doesn't (usually) have the ability to either run the job themselves or the systems to appoint another contractor immediately, and hope/expect that the client would prefer to stump up rather than go without the services Carillion provide.
> 
> the reason for Carillions 'success' to date has been that they actually employ very few people (relative to the size of their contracts), with pretty much everything actually done by sub-contractors - this however may be the reason they couldn't get a bail out - the clients have wised up that they don't actually need Carillion, they can just cut them out and employ the same sub-contractors doing exactly the same thing.
> 
> no loss to the world.



Yep. In other words, they took the UK construction model to wider sectors with predictable results


----------



## gawkrodger (Jan 16, 2018)

Brainaddict said:


> Is this a sign of a deeper malaise in the construction industry? If so I'm beginning to wonder if we are all fucked. The economy of London appears to hang on the slender threads of the finance industry and house price inflation, plus the even more slender threads of software development and construction. It seems to me only one of these needs to go for a downward spiral to be sparked off. The economy in much of the rest of the UK is already a basket case of course, so if London's economy goes there isn't too much left.



I started off this thread with the intention that it will mutate into a Construction Watch UK thread.

In response to the question



> Is this a sign of a deeper malaise in the construction industry?



Yes. Very much so. The Farmer review, the first government funded review of the construction sector in nearly 20 years, stressed the industry needs to undergo radical changes or face complete implosion within a decade.

I will go on and on when it's not past midnight on a school night


----------



## The Fornicator (Jan 16, 2018)

Kayleigh was obv. a decent track, if a little wrought. Otherwise not really.


----------



## Raheem (Jan 16, 2018)

Are they called Carillion because of how much all this is going to cost?


----------



## phillm (Jan 16, 2018)

DotCommunist said:


> time to hew a few more limbs from the magic money tree lol



Hopefully Jeremy will figure it all out when digging his allotment.


----------



## cupid_stunt (Jan 16, 2018)

> Contrary to popular — and populist — opinion, outsourcing is a messy business with little margin for profit. Or for error. Serco boss Rupert Soames has a lavatory brush on his desk to remind himself not to bid for work below the average cleaner’s 5-6 per cent margin. He calls it his “Shitometer”. But if former Carillion boss Richard Howson had something similar on his desk, he ignored its proximity to the fan. Today, the former hit the latter — and Carillion entered liquidation.



Shitometer. 

On a more serious note, I was surprised that all the reports prior to yesterday morning was about administration, then they went down the road of liquidation, so things were clearly more serious then most commentators assumed. Good summary of the situation here:



> But among the many questions this outcome raises, the most pertinent is: why liquidation rather than administration?
> 
> Administration allows a company to continue to operate, as the administrators attempt to find a buyer for viable parts of the business. Liquidation means a company ceases trading, and the liquidator merely tries to realise any remaining assets and distribute them to creditors. Carillion’s “compulsory liquidation” proves it had already reached a point where there was nothing worth buying.
> 
> ...



Subscribe to read


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## Teaboy (Jan 16, 2018)

Raheem said:


> Are they called Carillion because of how much all this is going to cost?



Its a peel of harmonious bells apparently.  Its to reflect that they were formed out of demerger with Tarmac and then grew by buying loads and loads of other related businesses.  When they are acquired the really quite large company I was part of they gave us a long speech about how most take overs fail but they do things differently.  Within a year there was virtually noting left of the company they had spent millions (possibly hundreds of millions on).

So full of shit.  It was clear to me from the out that the execs were being targeted on growth rather than profitability.  The take-over looked a bad deal all round for both companies but it became clear that execs on both side were going to make a killing and it was going to be forced through at all costs.


----------



## existentialist (Jan 16, 2018)

It'd be interesting (and I am sure someone is doing it right now) to put Serco, Crapita, and the rest of the Demon Corporation fraternity under the microscope now, and see how many of the bellwethers that presaged this meltdown apply to them, too.

Your description of a Carillion takeover matches to a T the description I heard from someone in a pensions company that was taken over by Crapita, for example. And what has happened there is an ever-tightening spiral of pettifogging hypercontrol of staff, with a consequent drop in motivation and progressive departure of the more professional ones who - who'd a thunk it! - turned out to be "carrying" their various departments, and having work heaped on them via the various mouthbreathing time management policies and systems, hastening their departure, and concentrating the problem even further.

If that's going on on any kind of general basis - and why wouldn't it be? - then there must be pockets within all of these organisations where the company is rapidly approaching a place where all those who are actually doing the work have left, and it's only a matter of time before, department by department, the operation is imploding.


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## Pickman's model (Jan 16, 2018)

Raheem said:


> Are they called Carillion because of how much all this is going to cost?


the bells were ringing out
for directors' pay


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## 1927 (Jan 16, 2018)

Just found out that in addition to the 20,000 employees, Carillion also had 1400 construction apprentices that now need to be found new companies to continue their apprenticeships!


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## KeeperofDragons (Jan 16, 2018)

There has been a suggestion that they were running a quasi ponzi scheme using New contracts to try & plug holes in previous ones


----------



## 1927 (Jan 16, 2018)

KeeperofDragons said:


> There has been a suggestion that they were running a quasi ponzi scheme using New contracts to try & plug holes in previous ones


I thought no that’s true of a lot of companies! Putting off the inevitable as long as they can!


----------



## KeeperofDragons (Jan 16, 2018)

1927 said:


> I thought no that’s true of a lot of companies! Putting off the inevitable as long as they can!


Yep but they did on a massive scale


----------



## 1927 (Jan 16, 2018)

KeeperofDragons said:


> Yep but they did on a massive scale


They were good at something then!


----------



## KeeperofDragons (Jan 16, 2018)

1927 said:


> They were good at something then!


----------



## existentialist (Jan 16, 2018)

1927 said:


> I thought no that’s true of a lot of companies! Putting off the inevitable as long as they can!


The thing with the Carillions of this world is that they're probably doing it in a way which becomes unsustainable quite quickly. There's a Guardian article which talks of them bidding for contracts at below cost, and then using the substantial upfront payment to keep themselves ticking over, then (presumably repeating that process as they find themselves losing money on the contract further down the line.

Without remotely wanting to let Carillion off the hook here, this is an inevitable consequence of the lowest-bidder-wins contracting approach, which incentivises companies to bid in at unsustainably low prices just to have some skin in the game, and then worry about the consequences later. It's also, of course, the system that enables massive cost overruns as companies get ever-more-cute about "ohhh, but that wasn't in the contract, you'll have to pay on top for that" stuff. The old story about the M40 being built at below cost comes to mind, here - the companies bid for the construction contract at an artificially low price, in the knowledge that, as things came up along the way, they'd be in a position to more or less name their price to get them done.


----------



## gawkrodger (Jan 16, 2018)

1927 said:


> Just found out that in addition to the 20,000 employees, Carillion also had 1400 construction apprentices that now need to be found new companies to continue their apprenticeships!



Welcome to my day at work!


----------



## Pickman's model (Jan 16, 2018)

gawkrodger said:


> Welcome to my day at work!


----------



## 1927 (Jan 16, 2018)

I’ve been in construction related industries for 30 years.

I can remember contracts where the main contractor would decide how much they could afford to LOSE on a job and price accordingly.

I also know of companies who would bid at COST, and then make their money by filling the site with QS’s and putting in claims for everything they could and screw subbies and suppliers. Steel arrives late, claim, concrete late, claim etc.

The other ploy is every single variation to contract, put in inflated costs for the change. Or they find something in the bill of quants with no quantity against it, and price it at a stupid high rate. That way it won’t be included in the bid price, but as soon as there is a requirement for that material or service they hit the jackpot.


----------



## Crispy (Jan 16, 2018)

It's a tough one. The bespoke nature of every job means that it's very hard to say definitively what it will cost; that uncertainty is ruthlessly exploited.


----------



## Sue (Jan 16, 2018)

I'm working at the moment for a company that uses Capita heavily for its back office functions -- some of the Capita staff sit next to us.

In general, they're reasonable enough at what they do but absolutely hamstrung by the rubbishness of Capita.

There are also constant arguments about what is/isn't in the contract and nonsense like trying to charge ludicrous amounts for a basic laptop -- as in multiple times what you'd pay if you walked into PC World (purchasing power of large companies hah).

It's also clear they've agreed to technical things in the contract that they don't actually understand...


----------



## pogofish (Jan 16, 2018)

1927 said:


> I’ve been in construction related industries for 30 years.
> 
> I can remember contracts where the main contractor would decide how much they could afford to LOSE on a job and price accordingly.
> 
> ...



I think the Carrillion/Balfour Beaty consortium for the road project here was looking to make their money off the 25-year operating/maintenance contract that followed the construction - which is well over time and budget already.

How much is unclear but recently, the smallest partner in the consortium (15/20% IIRC) had to stump-up anther 90-odd million, so Carrillion and BB's input would probably be proportional and much higher.


----------



## SpookyFrank (Jan 16, 2018)

The company directors have no personal legal liability for the money Carillion has effectively stolen from its pension fund do they?


----------



## SpookyFrank (Jan 16, 2018)

pogofish said:


> I think the Carrillion/Balfour Beaty consortium for the road project here was looking to make their money off the 25-year operating/maintenance contract that followed the construction - which is well over time and budget already.



It seems pretty obvious that the money in PFI hospital contracts is in the long term maintenance rather than the construction, hence why the one always comes bundled in with the other. 

As usual the logic is perverse. Everything must be contracted out and the lowest bid must be selected because that's how you get value for money for the taxpayer*. Then once the ink is dry everything from plumbing to window cleaning is done by a single company for a generation, and there's no option to get those services cheaper elsewhere. 

*unless the lowest bid comes from the public sector


----------



## pogofish (Jan 16, 2018)

SpookyFrank said:


> Everything must be contracted out and the lowest bid must be selected because that's how you get value for money for the taxpayer*.



Yup - Been here with a contractor who must have drilled the most expensive hole in human history.

They were unquestionably the cheapest in every aspect that the tender considered but then took so long with it that the cost went beyond staggering.

I still see the firm about site, so I assume things continue in much the same way today.


----------



## agricola (Jan 16, 2018)

SpookyFrank said:


> The company directors have no personal legal liability for the money Carillion has effectively stolen from its pension fund do they?



Possibly - the PPF went after Green over BHS (which was for less money than this and in very similar circumstances), though of course he was the owner and manager rather than just the manager.  I'd have thought their bonuses at least would be fair game, as well as the post-resignation wages.


----------



## gosub (Jan 16, 2018)

SpookyFrank said:


> The company directors have no personal legal liability for the money Carillion has effectively stolen from its pension fund do they?


 Fish, you fucking wanker.


----------



## elbows (Jan 16, 2018)

existentialist said:


> The thing with the Carillions of this world is that they're probably doing it in a way which becomes unsustainable quite quickly.



But, but, but, they won the Queens award for sustainability just last year


----------



## elbows (Jan 16, 2018)

gawkrodger said:


> Yes. Very much so. The Farmer review, the first government funded review of the construction sector in nearly 20 years, stressed the industry needs to undergo radical changes or face complete implosion within a decade.
> 
> I will go on and on when it's not past midnight on a school night



Thanks for that, its an interesting read. I dont have time to read all of it now but I read the first 11 pages and would characterise the headline recommendations of the review as:

Big up the Construction Leadership Council, reform the Construction Industry Training Board, focus on trying to make modern pre-fab stuff a meaningful chunk of the industry, get government to incentivise this in various ways.


----------



## agricola (Jan 16, 2018)

elbows said:


> But, but, but, they won the Queens award for sustainability just last year


----------



## Teaboy (Jan 16, 2018)

I'm wondering whether we had any money out to them.  I doubt it but a bit worrying all the same.


----------



## 1927 (Jan 16, 2018)

elbows said:


> But, but, but, they won the Queens award for sustainability just last year



Sustainable development not sustainable business practices!


----------



## elbows (Jan 16, 2018)

1927 said:


> Sustainable development not sustainable business practices!



Yeah I know and although I laughed in that post it is also a sad situation for many. I just cant help but poke fun at the narrow sense of sustainability that the word sustainable has become massively associated with this century.


----------



## ViolentPanda (Jan 16, 2018)

SpookyFrank said:


> It seems pretty obvious that the money in PFI hospital contracts is in the long term maintenance rather than the construction, hence why the one always comes bundled in with the other.
> 
> As usual the logic is perverse. Everything must be contracted out and the lowest bid must be selected because that's how you get value for money for the taxpayer*. Then once the ink is dry everything from plumbing to window cleaning is done by a single company for a generation, and there's no option to get those services cheaper elsewhere.
> 
> *unless the lowest bid comes from the public sector



I asked some senior council officers recently to define "value for money", as they'd used the term to describe a contract with a supplier. "The lowest bid", they said. "So not the lowest bid that provides a high-quality service, from a supplier with a sound reputation in that field, that follows best practice, then?" I asked. Turns out that none of them bother to read the procurement briefs that specify exactly that, they just forward everything onto the nodding donkeys on the council cabinet (some of whom couldn't read a specification for their own ringpiece) and let them rubber-stamp the contract.


----------



## ViolentPanda (Jan 16, 2018)

gosub said:


> Fish, you fucking wanker.



It should have been obvious he was a wrong'un, with a surname like Dick!


----------



## William of Walworth (Jan 16, 2018)

I usually read Nils Pratley and he's usually good (IMO) because he seems to know his finance stuff pretty well amd makes stuff clear ...

His take on the Carillion management's responsibility

This by Rupert Jones about the pension fund is also worth a look I think :
After Carillion, how many firms can the pensions lifeboat rescue?

I'm sure there's plenty in both those articles that's already been mentioned, but I was reading about this whole business _properly_ for the first time today -- and I don't subscribe to the FT!


----------



## Dan U (Jan 16, 2018)

Sue said:


> I'm working at the moment for a company that uses Capita heavily for its back office functions -- some of the Capita staff sit next to us.
> 
> In general, they're reasonable enough at what they do but absolutely hamstrung by the rubbishness of Capita.
> 
> ...



we've got this at one of the places i work at. someone i work with lost a laptop lead the other day and we were so outraged at what they wanted to charge the council for it we were gonna just buy one off Amazon ourselves, fortunately she found it.


----------



## likesfish (Jan 16, 2018)

might be time to bring back the PSA and keep a watch on it


----------



## GarveyLives (Jan 16, 2018)

SpookyFrank said:


> The company directors have no personal legal liability for the money Carillion has effectively stolen from its pension fund do they?


Can anyone clarify what money Carillion has stolen from its various pension schemes (whether effectively or otherwise)?


----------



## GarveyLives (Jan 16, 2018)

SpookyFrank said:


> ... As usual the logic is perverse. Everything must be contracted out *and the lowest bid must be selected* because that's how you get value for money for the taxpayer* ...
> 
> *unless the lowest bid comes from the public sector


That may in fact depend on the scoring mechanism used to adjudicate any given tender, and specifically how (if at all) it scores _both_ price _and_ quality.


----------



## teqniq (Jan 16, 2018)

GarveyLives Looks like they tweaked the rules concerning pensions in relation to their bonuses from the link in the Independent I posted above. So nothing actually _illegal_. haha. Anyway the usual suspects will always be protected so it's probably all a bit meaningless as far as they're concerned.


----------



## elbows (Jan 17, 2018)

Are there any more Philip Greens out there in the giddy heights of the business world that we should know about? With two already featured in the sorry stories of this century I wonder whether I should anticipate further growth in this sector.


----------



## SpookyFrank (Jan 17, 2018)

GarveyLives said:


> Can anyone clarify what money Carillion has stolen from its various pension schemes (whether effectively or otherwise)?



600 million quid was the number I saw. But it's never called theft when you rip people off on that scale is it? Just business.


----------



## squirrelp (Jan 17, 2018)

I don't understand why we need limited liability companies. Why should the people you do business with - the community - effectively be insuring your business against bankruptcy? I suspect it is no accident that limited liability appeared with fractional reserve banking in the 1800s.


----------



## alex_ (Jan 17, 2018)

squirrelp said:


> I don't understand why we need limited liability companies. Why should the people you do business with - the community - effectively be insuring your business against bankruptcy? I suspect it is no accident that limited liability appeared with fractional reserve banking in the 1800s.



Limited Liability Act 1855 - Wikipedia

This sounds familiar...

“it appears to me that a time of war is the very time which you ought to free commerce from restrictions, and, therefore that the reason he mentioned is an especial reason for pressing on the Bill instead of retarding it.”


----------



## DownwardDog (Jan 17, 2018)

squirrelp said:


> I don't understand why we need limited liability companies. Why should the people you do business with - the community - effectively be insuring your business against bankruptcy? I suspect it is no accident that limited liability appeared with fractional reserve banking in the 1800s.



How is limited liability insuring against bankruptcy? Limited companies can and do go bankrupt.


----------



## existentialist (Jan 17, 2018)

DownwardDog said:


> How is limited liability insuring against bankruptcy? Limited companies can and do go bankrupt.


I suspect what he means is "insuring against personal bankruptcy" - an LLC is a vehicle that allows risks to be taken without the directors having to be personally fully liable.


----------



## GarveyLives (Jan 17, 2018)

SpookyFrank said:


> 600 million quid was the number I saw. But it's never called theft when you rip people off on that scale is it? Just business.


Has anyone else seen any report(s) that allege Carillion "stole" £600m from its pension funds?


----------



## Sue (Jan 17, 2018)

So Carillion only had £29 million in cash while owing £1.3 billion to its banks as well as who knows what to its contractors. Is that not trading while insolvent which is illegal? 

(By no means an expert but when a company I worked for went down the tubes despite fresh funding being on the horizon, we were told the directors were obliged to pull the plug as soon as they were aware the company couldn't cover its liabilities.)


----------



## SaskiaJayne (Jan 17, 2018)

The purpose of limited liability I think, is allowing people to take business risk without the possibility of losing everything they have. This means people are more likely to take risks that might pay off & create jobs. In practise though a small businessman is usually asked by the bank to put his house on the line if he does want capital to finance an expansion of his business.

In reality though it is all part & parcel of neoliberalism that seems to allow company directors & bankers to cream off large salaries & bonuses by working closely together to risk other people’s money. I think the principle is on the lines of if you owe the bank enough money you effectively own the bank & that while a small debt is the debtor’s problem a huge debt is the bank’s problem but the directors of both busted company & bank still receive their bloated salaries. When it all goes tits up there are insolvency firms that make huge amounts sorting out the mess.

It appears to be an occupation ideal for very very clever people & allows them to amass huge amounts of personal wealth shovelling around huge amounts of money that has been earned & saved by people doing much less well paid jobs who have a choice. Lend their money safely at piss poor interest rates or take a bit of a punt on the stock market & risk losing their money while the people managing for them & lose it still get well paid.

The reason I guess none of this can be regulated properly is because in order for it to be regulated properly the regulators would need to be at all times ahead of those they are regulating. This will not happen because the regulators can only ever be paid a small fraction of what the regulated are paid. If any regulators are that good they will be soon be made an offer too good to refuse by the regulated. The poachers will always be far better than the gamekeepers because the poachers will always earn many times more than the gamekeepers.

Presumably this is the reason the poachers are paid such obscene amounts? Anybody who is that good will always seek to become a poacher & not a gamekeeper?

Dunno if the above is roughly correct? Thats how it appears to me as an interested spectator.


----------



## alex_ (Jan 17, 2018)

ViolentPanda said:


> I asked some senior council officers recently to define "value for money", as they'd used the term to describe a contract with a supplier. "The lowest bid", they said. "So not the lowest bid that provides a high-quality service, from a supplier with a sound reputation in that field, that follows best practice, then?" I asked. Turns out that none of them bother to read the procurement briefs that specify exactly that, they just forward everything onto the nodding donkeys on the council cabinet (some of whom couldn't read a specification for their own ringpiece) and let them rubber-stamp the contract.



I assume if you send it through with “cheapest” written on it you are done but if you want to justify it on value for money terms you need to write war and peace - so lazyness wins.

Alex


----------



## mwgdrwg (Jan 17, 2018)

Quite amusing that Labour are attacking the Tories for drip-feeding contracts to a failing company when they've been doing exactly the same thing in Wales.


----------



## ViolentPanda (Jan 17, 2018)

alex_ said:


> I assume if you send it through with “cheapest” written on it you are done but if you want to justify it on value for money terms you need to write war and peace - so lazyness wins.
> 
> Alex



I suspect that it does boil down to exactly that.  My local authority used to have lawyers in its' contracts and procurement depts. Not any more. Not for the last 15 years or so.


----------



## kebabking (Jan 17, 2018)

ViolentPanda said:


> I asked some senior council officers recently to define "value for money", as they'd used the term to describe a contract with a supplier. "The lowest bid", they said. "So not the lowest bid that provides a high-quality service, from a supplier with a sound reputation in that field, that follows best practice, then?" I asked. Turns out that none of them bother to read the procurement briefs that specify exactly that, they just forward everything onto the nodding donkeys on the council cabinet (some of whom couldn't read a specification for their own ringpiece) and let them rubber-stamp the contract.



unfortunately, you try being the LGO, Civil Servant or military Officer who reccommends and then pushes for any bid that isn't either the cheapest, or second cheapest by a marginal percentage. no one who has the lamentable job of advising the budget holder on contracts in the public sector is under any illusion that, regardless of what is said about value vs cost, the objective is 'the cheapest quote - end of story'.


----------



## alex_ (Jan 17, 2018)

mwgdrwg said:


> Quite amusing that Labour are attacking the Tories for drip-feeding contracts to a failing company when they've been doing exactly the same thing in Wales.



It’s not a totally crazy thing to do and ultimately the alternatives are worse and hardly quick.

“don’t give any contracts to Carillion” would finish them instantly and the shareholders would have sued the government and the government would have been dealing with that for 10 years.

“Outsourcers must have capital and cash flow adequacy of X” would push up the cost of outsourcing would require new legislation and end up in court.

Letting them take new business and hope they turned it around was probably the least worst option once the government found themselves in this position.

Alex


----------



## SpookyFrank (Jan 17, 2018)

GarveyLives said:


> Has anyone else seen any report(s) that allege Carillion "stole" £600m from its pension funds?



They were obliged to pay into their employee's pensions, and didn't. Those employees have done their work in good faith, and yet a key part of their remuneration for that work has apparently vanished, spent elsewhere to prop up a doomed company and preserve a handful of lucrative directorships. What would you call that, if not theft?


----------



## SpookyFrank (Jan 17, 2018)

alex_ said:


> It’s not a totally crazy thing to do and ultimately the alternatives are worse and hardly quick.
> 
> “don’t give any contracts to Carillion” would finish them instantly and the shareholders would have sued the government and the government would have been dealing with that for 10 years.
> 
> ...



If there is no legislation allowing the government to refrain from awarding contracts to failing companies then that is something that needs to be rectified, otherwise stuff like this will keep happening.

The government temporarily stopped any new G4S contracts at one point IIRC, on grounds of incompetence. Although I think in reality a lot of contracts were agreed on during that hiatus and then rubber-stamped 4.5 seconds after it became OK to give them work again


----------



## existentialist (Jan 17, 2018)

SpookyFrank said:


> They were obliged to pay into their employee's pensions, and didn't. Those employees have done their work in good faith, and yet a key part of their remuneration for that work has apparently vanished, spent elsewhere to prop up a doomed company and preserve a handful of lucrative directorships. What would you call that, if not theft?


And - critically - the employees have no recourse. 

It's all very well operating your economy according to "law of the jungle" principles - well, actually its not, it's shit - but what makes me want to vomit is the constant government/neolib narrative that it's not really like that, and actually they care deeply. It's a complete hollow sham. You've got workers being screwed out of their pensions, SME suppliers to Carillion locked into rebate schemes whereby they can be stiffed for their invoices while the receivers will undoubtedly be coming after then for payment on "rebate" invoices, and the entirety of our ruling elite isn't saying "God, this is shit and rotten to the core". I think it's about time a few directorial Mercs started getting torched.


----------



## Smokeandsteam (Jan 17, 2018)

alex_ said:


> “Outsourcers must have capital and cash flow adequacy of X” would push up the cost of outsourcing would require new legislation and end up in court.



This is an important point. Carillion would no doubt have liked to push up the cost of outsourcing, would have liked to have built big margins into its contracts and would like to have built capital reserves. Had they done that however goverment (including the last labour government) would have awarded them precisely nothing by way of contracts. 

The model of government outsourcing demands the model operated by Carillion. It promotes risk and incoherent debt/ponzi financing approaches and it accelerates a race to the bottom in terms of pensions, pay and terms and condtions. 

The fat cats of Carillion are responsible definitely - but Government contracting has some serious questions to answer because all of Carillion's 'competitors' are on the same journey as a result of the model. An independent enquiry is essential for exactly this reason and I am glad labour is demanding it.


----------



## GarveyLives (Jan 17, 2018)

SpookyFrank said:


> They were obliged to pay into their employee's pensions, and didn't. Those employees have done their work in good faith, and yet a key part of their remuneration for that work has apparently vanished, spent elsewhere to prop up a doomed company and preserve a handful of lucrative directorships. What would you call that, if not theft?


My apologies – can you, or anyone else, clarify the source for the claim that Carillion was not making payments into its various pension schemes?

Where does this information come from?

And how is it that we have not heard this before (from the pension trustees, employees, union representatives and so on)?


----------



## GarveyLives (Jan 17, 2018)

binka said:


> I very much doubt the current shareholders are pension schemes, they'll be speculators trying to 'catch a falling knife'


The _fund managers_ hit by Carillion's collapse

Retail investors bear the brunt of Carillion losses

Carillion PLC: Major Shareholders


----------



## existentialist (Jan 17, 2018)

GarveyLives said:


> My apologies – can you, or anyone else, clarify the source for the claim that Carillion was not making payments into its various pension schemes?
> 
> Where does this information come from?
> 
> And how is it that we have not heard this before (from the pension trustees, employees, union representatives and so on)?


As far as I understand it, the £500m-odd pension deficit is a matter of record, and not in dispute. Maybe it would be helpful if you were to identify the point you're trying to make in pursuing this line of questioning?


----------



## SpookyFrank (Jan 17, 2018)

GarveyLives said:


> My apologies – can you, or anyone else, clarify the source for the claim that Carillion was not making payments into its various pension schemes?
> 
> Where does this information come from?
> 
> And how is it that we have not heard this before (from the pension trustees, employees, union representatives and so on)?



It's been widely reported. I've not seen an article about Carillion that _hasn't_ mentioned the pension deficit.

Fears over pensions deficit as Carillion teeters on the brink


----------



## RainbowTown (Jan 17, 2018)

And once more the ordinary worker is shat upon from a large height.

And, of course, the consequences for those maggots who've caused this disgrace? Absolute zilch. A big fat nothing.

As always.


----------



## DownwardDog (Jan 17, 2018)

existentialist said:


> think it's about time a few directorial Mercs started getting torched.



So what's stopping you?


----------



## binka (Jan 17, 2018)

GarveyLives said:


> The _fund managers_ hit by Carillion's collapse
> 
> Retail investors bear the brunt of Carillion losses
> 
> Carillion PLC: Major Shareholders


Not sure what point you're trying to make from those three articles?


----------



## existentialist (Jan 17, 2018)

DownwardDog said:


> So what's stopping you?


I play to my strengths. One of which is posting metaphors on Internet forums.


----------



## DotCommunist (Jan 17, 2018)

DownwardDog said:


> So what's stopping you?


----------



## DownwardDog (Jan 17, 2018)

DotCommunist said:


>


That fucking apostrophe.


----------



## squirrelp (Jan 17, 2018)

DownwardDog said:


> How is limited liability insuring against bankruptcy? Limited companies can and do go bankrupt.


Well someone has to pick up the tab for the losses when a company fails. With limited liability, it's your creditors - the people your company owed money to. If unsecured, they are left with whatever scraps are left after the secured creditors and HMRC take their chunk. Without limited liability, I think one would be able to hold the directors of the company personally responsible. So they'd be underwriting the business.

The benefit of not being liable as a director is obvious - the flipside is that if you run a business and it does disastrously wrong, you are bankrupt - but I think overall this is an arrangement which benefits big business far more than little guys.


----------



## cupid_stunt (Jan 17, 2018)

Talking about profit margins, I've just been talking to one of my clients who has been asked to quote on putting in 97 bathrooms & kitchens by a big developer, but they expected him to work on a 7% margin, which is too tight if something goes tits-up, so he basically told them to do one.


----------



## cupid_stunt (Jan 17, 2018)

DownwardDog said:


> That fucking apostrophe.



They need locking-up for that.


----------



## SpookyFrank (Jan 17, 2018)

squirrelp said:


> The benefit of not being liable as a director is obvious - the flipside is that if you run a business and it does disastrously wrong, you are bankrupt - but I think overall this is an arrangement which benefits big business far more than little guys.



The directors won't be personally bankrupt though will they? I don't think they're even barred from holding other directorships in the future.

And it's well established that executive level pay bears little or no relation to success or failure. A director on a seven figure salary will often turn out to be about as good at making sensible business decisions as a monkey rolling dice.


----------



## agricola (Jan 17, 2018)

squirrelp said:


> Well someone has to pick up the tab for the losses when a company fails. With limited liability, it's your creditors - the people your company owed money to. If unsecured, they are left with whatever scraps are left after the secured creditors and HMRC take their chunk. Without limited liability, I think one would be able to hold the directors of the company personally responsible. So they'd be underwriting the business.
> 
> The benefit of not being liable as a director is obvious - the flipside is that if you run a business and it does disastrously wrong, you are bankrupt - but I think overall this is an arrangement which benefits big business far more than little guys.



The big issue with directors (and board members generally) is that there still isn't an effective "honest services" offence in British law (which would among other things make it a criminal offence for directors / managers to do things that put the entity they are in charge of at unjustifiable risk for gain to themselves or others); if there was then the threat of it would prevent a lot of this daftness.


----------



## Sue (Jan 17, 2018)

binka said:


> Not sure what point you're trying to make from those three articles?


That it's the fund managers and shareholders we should be feeling sorry for rather than the people working for Carillion who've lost their jobs/aren't getting paid..?


----------



## cupid_stunt (Jan 17, 2018)

binka said:


> Not sure what point you're trying to make from those three articles?





Sue said:


> That it's the fund managers and shareholders we should be feeling sorry for rather than the people working for Carillion who've lost their jobs/aren't getting paid..?



The point being fun managers handle pension schemes, so some people's pension funds are taking a hit too.


----------



## marty21 (Jan 17, 2018)

They ran libraries under contract using a not for profit arm  called Community Cultural Solutions


----------



## cupid_stunt (Jan 17, 2018)

marty21 said:


> They ran libraries under contract using a not for profit arm  called Community Cultural Solutions



A not for profit arm that no doubts pays over the top for backroom functions from the group, it can be easy to make a profit within the group, whilst showing a particular division doesn't make any profits.


----------



## marty21 (Jan 17, 2018)

cupid_stunt said:


> A not for profit arm that no doubts pays over the top for backroom functions from the group, it can be easy to make a profit within the group, whilst showing a particular division doesn't make any profits.


The various councils have to pay an early contract cancellation fee of several hundred thousand quid . Are they still liable for that if the company is bankrupt?


----------



## squirrelp (Jan 17, 2018)

SpookyFrank said:


> The directors won't be personally bankrupt though will they? I don't think they're even barred from holding other directorships in the future.


That's absolutely the case with the system we currently have. Although there are complex rules to govern the conduct of a director during insolvency / bankruptcy, in practice, the system is absolutely set up to protect directors and there is plenty of scope for a director to run strings of companies that go bust. For a director to be barred they really have to do something massively fraudulent or exceptionally stupid. Letting one company go bust, and then starting another the next day doing exactly the same work - a 'phoenix' company - happens all the time. Holding a director personally liable for their company's debt is pretty much impossible.

I know more about this than I care to


----------



## SpookyFrank (Jan 17, 2018)

marty21 said:


> The various councils have to pay an early contract cancellation fee of several hundred thousand quid . Are they still liable for that if the company is bankrupt?



Probably also says in the contract that the provider is obliged to a) do the work and b) exist.


----------



## existentialist (Jan 17, 2018)

marty21 said:


> The various councils have to pay an early contract cancellation fee of several hundred thousand quid . Are they still liable for that if the company is bankrupt?


My guess is that it will come down to the Service Level Agreement the council signed with Carillion. I don't think that the contract is necessarily automatically void because Carillion went tits-up, but if Carillion fail to honour their obligations under the SLA, there would be scope for the client to terminate the contract - but even there, they probably have to go through some kind of contract failure process, so it's probably not even a question of waiting until the Carillion-paid staff fail to turn up for work, but having to endure that happening and then commencing whatever the process agreed in the contract for failure to supply was. Which is going to leave a lot of their customers having to somehow prop up the service Carillion is no longer supplying, while at the same time initiating some probably fairly drawn-out process of cancelling the contract due to their failure. I might be being unduly cynical here, and maybe the receivers will be a bit more understanding, but I have a feeling it probably isn't actually possible to be too cynical about situations like this...

This is part of the job of the receivers - they are going to be absolutely on the case for any clients who might breach the terms of the contract, and thereby leave themselves open for a claim from Carillion (in receivership) for breach of contract. The receivers' job is to make the most of the remaining assets (including assets-in-kind like ongoing contracts), and it's probably more in their interests than it might have been in Carillion's to pursue any possibility of screwing as much money out of clients as possible, particularly in view of the bareness of the cupboard, as things stand. If that means screwing cancellation fees, so be it - it's all money back in the pot, and they'll justify it by pointing out that they're "just trying to secure best value for the creditors".


----------



## Dan U (Jan 17, 2018)

SpookyFrank said:


> Probably also says in the contract that the provider is obliged to a) do the work and b) exist.



Yes this. Carillion can't fulfill its end of the contract as it can't pay workers to operate whatever the deliverables are. 

You'd assume that is automatic default, this isn't a case of public bodies wanting to walk away because they are pissed off and found a new supplier who was cheaper or better or whatever - which is what early termination clauses are meant to guard against - carillion can't actually function.


----------



## binka (Jan 17, 2018)

cupid_stunt said:


> The point being fun managers handle pension schemes, so some people's pension funds are taking a hit too.


Pension funds should be very risk averse, they should have got out when it became clear it was the most shorted stock on the LSE. I would still imagine most did (hence the protracted 25% fall in share price before the profit warning last summer) and even those that didn't would still be well diversified enough to make up for it elsewhere.


----------



## Badgers (Jan 17, 2018)




----------



## happie chappie (Jan 17, 2018)

Gromit said:


> Actually I would. At this risk of invoking Godwin’s law... working for Capita is like being a SS officer or an Infantry Soldier working for Hitler in a concentration camp. From the top to the bottom they are still doing the will of evil nazis. I was only following orders is not an excuse.
> 
> Capita going under is thatcher dead level of celebration to my mind.



I’m not sure you’ve ever met a concentration camp survivor, let alone talked to them about their experiences.

I very much doubt it given the pile of horseshit you’ve just emitted.

To compare ANYTHING Carillion the company has done (let alone their ordinary employees) to wholesale genocidal slaughter is just so crass, stupid and moronic I can only assume you’ve had your brain removed for the day.

If you ever do reclaim it I would go away and have a very long, hard think about what you’ve posted.

In the meantime fuck you and Godwins law.


----------



## cupid_stunt (Jan 17, 2018)

happie chappie said:


> I can only assume you’ve had your brain removed for the day.



For the day?


----------



## Gromit (Jan 17, 2018)

happie chappie said:


> I’m not sure you’ve ever met a concentration camp survivor, let alone talked to them about their experiences.
> 
> I very much doubt it given the pile of horseshit you’ve just emitted.
> 
> ...


I wasn’t comparing it in scale of malevolence just in culture of accepted evil. 
Capita do however have blood on their hands. Not as much blood as the nazis but blood nevertheless. 
Numerous suicides due to their heartless administration for profit of various types of benefit claim etc.


----------



## GarveyLives (Jan 17, 2018)

Badgers said:


>



Is this list correct?

Richard Tapp is a solicitor and the longstanding Secretary of Carillion plc, but he has never been a director if it. I am not sure that Janet Dawson has ever been a director of Carillion plc either. 

What does this list represent?  Senior executives within the Carillion Group of companies past and present?  Or what?


----------



## GarveyLives (Jan 17, 2018)

binka said:


> Not sure what point you're trying to make from those three articles?


It is there for information if anyone wants it.


----------



## mx wcfc (Jan 17, 2018)

If the Company has gone into liquidation, then the directors are no longer directors, so there isn't anything particularly problematic with this.   I haven't got access at home but can have a look at Companies House tomorrow.

Company secretary, at this level is a functionary appointment, it doesn't mean they are complicit in anything.


----------



## binka (Jan 17, 2018)

GarveyLives said:


> It is there for information if anyone wants it.


Fair enough sorry I assumed your links meant you disagreed with me. I blame 15 years of U75


----------



## GarveyLives (Jan 17, 2018)

SpookyFrank said:


> It's been widely reported. I've not seen an article about Carillion that _hasn't_ mentioned the pension deficit.
> 
> Fears over pensions deficit as Carillion teeters on the brink


Apologies if I have missed anything.

Your posts claimed that Carillion "stole" £600m from its pension funds and that it was not making payments into its various pension schemes.

I cannot see where the article to which you have kindly drawn attention supports either of these two claims.  It draws attention to the fact there is a pension deficit, which sadly, is commonplace in the case of large listed companies.

Obviously, there are people here with greater expertise on this than I have, but at the moment, I cannot see the evidence is for what you claim.  Also, I cannot see where the claims you make have yet been supported by the actual pension scheme trustees, or the employees, union representatives and so on.


----------



## mx wcfc (Jan 17, 2018)

I have no great expertise in these things either, and pension fund deficits are not limited to Carillion.  But they paid out a big dividend  last year, and directors bonuses, whilst the pension fund was in deficit and that is a pile of crap, whatever the legalities.


----------



## GarveyLives (Jan 17, 2018)

SpookyFrank said:


> The directors won't be personally bankrupt though will they? I don't think they're even barred from holding other directorships in the future  ...


If any of the directors had been bankrupt, they would not have able to serve as directors by law.

As for the current situation, my understanding that it is Carillion plc which is insolvent, not any individual director of it.

Nothing currently prevents any of them from holding directorships in the future as far as I am aware, bar potential reputational damage to any company on whose board they might wish to serve, but neither is there any reason why any of them might not be disqualified from being a director in the future, should the evidence show that that is appropriate.


----------



## GarveyLives (Jan 17, 2018)

mx wcfc said:


> But they paid out a big dividend  last year, and directors bonuses, whilst the pension fund was in deficit and that is a pile of crap, whatever the legalities.


Perfectly correct ... and commonplace.

However, this seems to me to be different from claiming that Carillion "stole" £600m from its pension funds and that it was not making payments into its various pension schemes.  To date, I am not clear what evidence these claims are based on.


----------



## mx wcfc (Jan 17, 2018)

GarveyLives said:


> Perfectly correct ... and commonplace.
> 
> However, this seems to me to be different from claiming that Carillion "stole" £600m from its pension funds and that it was not making payments into its various pension schemes.  To date, I am not clear what evidence these claims are based on.



It's about reality, rather than legality.  They could have dealt with their responsibilities to their pension fund.  They chose not to. They paid dividends and bonuses instead.  That is not technically theft, I agree.  I am sure the directors who have lined their own pockets will have had good legal advice and will get away with it.  But it is still a pile of shit and we will still line then up against the wall and shoot them come the revolution.   Comrade.


----------



## GarveyLives (Jan 17, 2018)

So far as board conduct in the latter stages of this affair is concerned, it will be interesting to see the outcome of this:

HS2 contractor Carillion investigated by Financial Conduct Authority


----------



## 1927 (Jan 17, 2018)

Theres a degree of hypocrisy at play with Corbyn making capital out of this, when the only Government in UK that Labour controls, Welsh Assembly Government, was still handing out contracts to Carillion!


----------



## agricola (Jan 17, 2018)

1927 said:


> Theres a degree of hypocrisy at play with Corbyn making capital out of this, when the only Government in UK that Labour controls, Welsh Assembly Government, was still handing out contracts to Carillion!



Corbyn doesn't control Carwyn Jones, even though it would be better for Carwyn Jones if he did.


----------



## mx wcfc (Jan 17, 2018)

It is rich blaming Corbyn for such a complete and total failure of privatisation, if not of capitalism itself. 

Blame Blair and Brown, but not Corbyn.


----------



## agricola (Jan 17, 2018)

This thread has been going for nine pages, so perhaps its time for a little bit of levity:



> What has outsourcing ever done for me?
> 
> In a parody of the scene from Monty Python’s Life of Brian, that is what critics and commentators are asking about the collapse of Carillion – formerly one of the UK’s biggest companies.
> 
> ...


----------



## 1927 (Jan 17, 2018)

agricola said:


> This thread has been going for nine pages, so perhaps its time for a little bit of levity:


All of that would only be true if Carillion ONLY carried out works in pubic sector and undertook no privately funded works! They public works may have been making vast profits and subsidising other loss making parts of the company!


----------



## GarveyLives (Jan 17, 2018)

Carillion plc's last full year results and statutory accoounts show that in relation to the 2016 financial year, that it paid:

pension deficit contributions of £46.6m; and

total directors' remuneration of £2,715,000.

It also proposed that its full-year dividend be increased by 1% to a total of £78.9m (which was subsequently approved by its shareholders).

Given the scale of what has now happened, these sums may be relatively insignificant, but it may give some indication of the mentality of those who served on the board.

It would be good to hear why those in charge of a company in such a state considered it appropriate to allow nearly £79m flow out of the business in dividends:

_"The Group is well positioned to continue funding the dividend, which continues to be well covered by cash generated by the business."_ (2016 Annual Report, page 44)

Within a year of that statement, it was bankrupt.


----------



## GarveyLives (Jan 18, 2018)

Source:  Bonuses for Carillion bosses are blocked


----------



## yield (Jan 18, 2018)

Smokeandsteam said:


> There needs to be a public enquiry into the collapse of Carillion.
> 
> The enquiry should look at the management of the company, executive pay and shareholder dividends and so on.
> 
> ...


 Carillion must now also face justice for blacklisting trade unionists
Dave Smith 17 January 2018


> When you invite blacklisting human rights abusers to run the NHS and school meals, don’t be surprised when vampire capitalism attempts to suck the taxpayer dry, writes Dave Smith.





> On Monday, the Cabinet Office went on Twitter to ask if anyone had been affected by Carillion. I replied:
> 
> “Yes, I was #blacklisted by #Carillion for raising safety concerns on their building sites. Can the government help me by setting up a public inquiry to bring those responsible to justice?”



Blacklist in the construction industry....thread


----------



## Badgers (Jan 18, 2018)

'Hypocrite' Theresa May trousered £50k from firm that bet on Carillion's failure


----------



## SpookyFrank (Jan 18, 2018)

GarveyLives said:


> Perfectly correct ... and commonplace.
> 
> However, this seems to me to be different from claiming that Carillion "stole" £600m from its pension funds and that it was not making payments into its various pension schemes.  To date, I am not clear what evidence these claims are based on.



Put yourself in the position of an employee who suddenly finds herself unemployed with no redundancy money, reading the paper and seeing that the pension fund she has every right to expect will be properly handled is missing a vast sum of money. Despite the huge salaries drawn by those ultimately responsible for ensuring that basic stuff like pensions are properly handled, she finds that there is nobody who can be held accountable for the fuck up.

Do you not think thay would feel a bit like being stolen from? Except you can't report it to the police because rich folk did it so it wasn't a crime.

Out of curiosity, what is your percentage in sticking up for these fucking jokers?


----------



## Badgers (Jan 18, 2018)




----------



## elbows (Jan 18, 2018)

agricola said:


> This thread has been going for nine pages, so perhaps its time for a little bit of levity:



The comedy value is further enhanced via comedy timing - via a National Audit Office report about how shit PFIs are.

PFI deals 'costing taxpayers billions'



> Financing projects like schools and hospitals privately costs taxpayers billions of pounds more than public sector alternatives, parliament's spending watchdog says.
> 
> A report suggests a group of schools cost 40% more to build and a hospital 70% more to construct than if they were financed by government borrowing.





> The watchdog highlighted the increased cost of borrowing which it said was 2% to 3.75% higher for PFIs compared to state borrowing.
> 
> "Small changes to the cost of capital can have a significant impact on costs," the report said.
> 
> "Paying off a debt of £100m over 30 years with interest of 2% costs £34m in interest. At 4% this more than doubles to £73m."


----------



## existentialist (Jan 18, 2018)

elbows said:


> The comedy value is further enhanced via comedy timing - via a National Audit Office report about how shit PFIs are.
> 
> PFI deals 'costing taxpayers billions'


I'd like to think that this was part of a game changing phase in UK business/politics, but I'm so beaten down by repeated failures of what seemed to me obvious examples of things being shit to result in any change that I'm a bit cynical about that possibility.

Really, what we are looking at here is the complete and utter public discreditation of the PFI/privatisation craze, and it should spark a noisy public movement to start reversing that - not just "where possible", but "on principle". I'm pessimistic about whether that will happen.


----------



## SpookyFrank (Jan 18, 2018)

70% extra cost for using PFI to build hospitals. I knew these people were taking the piss but that's insane.

It's outright theft; made possible by ubiquitous, institutional, bone-deep corruption.


----------



## alex_ (Jan 18, 2018)

SpookyFrank said:


> Put yourself in the position of an employee who suddenly finds herself unemployed with no redundancy money, reading the paper and seeing that the pension fund she has every right to expect will be properly handled is missing a vast sum of money. Despite the huge salaries drawn by those ultimately responsible for ensuring that basic stuff like pensions are properly handled, she finds that there is nobody who can be held accountable for the fuck up.
> 
> Do you not think thay would feel a bit like being stolen from? Except you can't report it to the police because rich folk did it so it wasn't a crime.



The ftse 100 has combined pension deficit of 87 bn gbp.

If you legislate that these need to be fixed very quickly some of these companies will go bust immediately, and pensioners will be left short. 

The only way to fix is is over decades, as a result some companies will fold before they fix them, and pensioners will be left short.

There is no easy answer to this, saying that companies with deficits are stealing pensioners pensions is hyperbole.

Alex


----------



## SpookyFrank (Jan 18, 2018)

alex_ said:


> The ftse 100 has combined pension deficit of 87 bn gbp.
> 
> If you legislate that these need to be fixed very quickly some of these companies will go bust immediately, and pensioners will be left short.
> 
> ...



So it's OK if everyone does it?


----------



## elbows (Jan 18, 2018)

alex_ said:


> The ftse 100 has combined pension deficit of 87 bn gbp.
> 
> If you legislate that these need to be fixed very quickly some of these companies will go bust immediately, and pensioners will be left short.
> 
> ...



I am not convinced by this 'only way to fix is over decades' stuff, given that I read an article someone linked to earlier in this thread:



> However, perhaps LCP’s most damning finding was that FTSE 100 companies paid out four times as much in dividends in 2016 as they handed over in contributions to their defined-benefit schemes.
> 
> According to JLT, 41 FTSE 100 firms could settle their pension deficits in full with the cash paid out as dividends to shareholders in a single year. A further 11 companies would need a payment of up to two years’ dividends to eradicate their deficits while 14 companies would need a payment of more than two years’ dividends.



After Carillion how many firms can the pensions lifeboat rescue?


----------



## GarveyLives (Jan 18, 2018)

mx wcfc said:


> ... Company secretary, at this level is a functionary appointment, it doesn't mean they are complicit in anything.


I thik that you will find that Lord Denning took a different view as long ago as 1971, let alone the modern view of corporate governance, post-Cadbury, post-Greenbury and so on.

However, I accept that the role of the Secretary has rarely been reviewed in modern governance scandals.


----------



## GarveyLives (Jan 18, 2018)

GarveyLives said:


> ... Nothing currently prevents any of them from holding directorships in the future as far as I am aware, *bar potential reputational damage to any company on whose board they might wish to serve*, but neither is there any reason why any of them might not be disqualified from being a director in the future, should the evidence show that that is appropriate.


As predicted ...

Carillion audit chair under pressure to quit Victrex board]Carillion audit chair under pressure to quit Victrex board

Ex-Carillion boss resigns from Aberdeen oil services giant





Hopefully, Mr Howson (above) will be _just about managing_ to be able to get by ...


----------



## Chilli.s (Jan 18, 2018)

Just how can you get a bonus for running a company that folds less than a year later.  Corrupt?  Criminal?


----------



## alex_ (Jan 18, 2018)

elbows said:


> I am not convinced by this 'only way to fix is over decades' stuff, given that I read an article someone linked to earlier in this thread:
> 
> 
> 
> After Carillion how many firms can the pensions lifeboat rescue?



The devil is in the “Of the 14 companies which would require more than two years” eg iag’s deficit is 80% of its market capitalisation, and about 5x it’s last profit.

Overly aggressive legislation to resolve pensions deficits will kill final salary pension schemes.

Alex


----------



## agricola (Jan 18, 2018)

alex_ said:


> The devil is in the “Of the 14 companies which would require more than two years” eg iag’s deficit is 80% of its market capitalisation, and about 5x it’s last profit.
> 
> Overly aggressive legislation to resolve pensions deficits will kill final salary pension schemes.
> 
> Alex



IAG is never a good example, unless you are talking about how dreadful a firm is. 

I agree that overly aggressive legislation is not required however; all you'd need to do is make sure that the pension fund deficit is recorded in the accounts as debt, with the resultant effect it would have on bonuses, performance related pay etc.  You'd close the gap in 90% of firms.


----------



## 1927 (Jan 18, 2018)

alex_ said:


> The devil is in the “Of the 14 companies which would require more than two years” eg iag’s deficit is 80% of its market capitalisation, and about 5x it’s last profit.
> 
> Overly aggressive legislation to resolve pensions deficits will kill final salary pension schemes.
> 
> Alex


They're dead already!


----------



## elbows (Jan 18, 2018)

1927 said:


> They're dead already!



Sadly there is plenty of evidence that this is the case.


----------



## alex_ (Jan 18, 2018)

1927 said:


> They're dead already!



19 FTSE 100 companies operate them.

Just 19 FTSE 100 companies continue to provide final salary pensions

Alex


----------



## 1927 (Jan 18, 2018)

elbows said:


> Sadly there is plenty of evidence that this is the case.


Thats why I made the comment!


----------



## 1927 (Jan 18, 2018)

alex_ said:


> 19 FTSE 100 companies operate them.
> 
> Just 19 FTSE 100 companies continue to provide final salary pensions
> 
> Alex


I refer you to my previous post!


----------



## Bahnhof Strasse (Jan 18, 2018)

GarveyLives said:
			
		

> Hopefully, Mr Howson (above) will be _just about managing_ to be able to get by ...



Seeing as you have told us his ring-fenced salary was £660,000.00 for a single year’s work destroying a business, I doubt we’ll be seeing him down the food bank anytime soon.


----------



## GarveyLives (Jan 19, 2018)

> Seeing as you have told us his ring-fenced salary was £660,000.00 for a single year’s work destroying a business, I doubt we’ll be seeing him down the food bank anytime soon.



The 'Single figure of remuneration' (Salary/fees, Benefits, Bonus (the cash value of the bonus earned in respect of the year including, where relevant, the value of deferred shares, which must be held for a minimum three-year period), Long-term incentives (the value of performance-related incentives vesting in respect of the performance period ended 31 December 2016.) and Pension (the cash value of pension contributions received by the Executive Directors. This includes Carillion’s contributions to the defined contribution pension plan and any salary supplement in lieu of a Company pension contribution and the allowance paid for salary in excess of the internal cap on pensionable salary)) for *Mr Howson* which appeared in the 2016 Carillion plc annual report was *£1,510,000*

Mr Howson retained the fee of £35,374 paid in 2016 relating to his role as a Non-Executive Director of Wood Group plc and had 22 years of service with Carillion "in a variety of roles" and had been on the Carillion plc board for over 7 years.




_"In line with best practice and the Directors’ Remuneration Policy, increases in salary for Executive Directors will not normally exceed the range of increases awarded to other employees in the Group with the exception of the specific circumstances listed in the binding policy.

In recognition of this policy and as explained in detail in the 2014 and 2015 Remuneration reports, the Remuneration Committee *implemented a phased increase to Richard Howson’s base salary in January 2015 and January 2016 to reflect his contribution to the business* and his experience in his current role.

The second of these increases was *contingent on a continued improvement in both corporate and personal performance*."_

(Source: Carillion plc 2016 Directors' Remuneration Report)


----------



## Bahnhof Strasse (Jan 20, 2018)

He should be put against a wall and shot.


----------



## mather (Jan 20, 2018)

Bahnhof Strasse said:


> He should be put against a wall and shot.



Ideally but I'd settle for him serving a long time in jail, maybe even a life sentence given the scale of this scandal. Even more importantly, I hope this scandal finally puts the final nail in the coffin on PFI and the whole process of privatising and introducing the market to the public sector. 

I mean how many more examples do we need for PFI and privatisation to become politically toxic, so that any politician who supports this crap can face losing his/her seat?


----------



## teqniq (Jan 21, 2018)

I will be massively surprised if they actually make good on any of this and even more so if any of the current crop of criminals is bought to book.

Theresa May: I will fine greedy bosses who betray their workers


----------



## existentialist (Jan 21, 2018)

teqniq said:


> I will be massively surprised if they actually make good on any of this and even more so if any of the current crop of criminals is bought to book.
> 
> Theresa May: I will fine greedy bosses who betray their workers


Worst case - they enact some shite legislation that actually makes life more difficult for all businesses, but which huge corporations can easily wriggle out via sweetheart deals and lawyering up.

Likely case - it's all words, and the whole matter will be quietly dropped just as soon as it's expedient to do so.

What I cannot understand - through applying principles of fairness and natural justice (yes, I know ) is how it can *ever* have been appropriate for pension contributions to appear on a company's balance sheet, far less be able to be raided more or less at the whim of directors. That is money which has been set aside for a very specific purpose, and it seems utterly logical to me that, having set it aside, it should be treated as such, and not just as another pot to dip into when companies feel like it.

To me, the only reasonable way to go is for pensions to be managed completely *outside* the company - contributions are paid into a fund that is managed by a specialist pensions operation, much like any of us would do with a personal pension, and to which the company does not have any kind of routine access. Perhaps there's scope for dealing with pensions "surpluses" (although I can't see why the pensioners shouldn't benefit from those), but it needs to be managed carefully, and be subject to strict oversight.

I am sure there is some factor that I'm overlooking here, and that this is probably a very naive way of looking at it, so I'm glad to be educated on the matter. It's just that too many people seem to find that the pension they've been paying into for years, and are relying on for their retirement, is suddenly evaporating because their employer went bust, or got asset-stripped, and I can't see any justification for it.


----------



## teqniq (Jan 21, 2018)

In a parallel universe perhaps



> Treasury Minister Liz Truss has warned against throwing “the baby out with the bath water” as private sector involvement in public services is thrust into the spotlight.
> 
> Ms Truss said working with firms and signing controversial private finance initiatives (PFIs) had helped the Government deliver schools, hospitals and other services successfully for decades....



Treasury Minister says backlash to Carillion must not 'throw baby out with the bath water'


----------



## GarveyLives (Jan 21, 2018)

existentialist said:


> ... Likely case - it's all words, and the whole matter will be quietly dropped just as soon as it's expedient to do so ...



Public relations slogans and waffle.

If she considered these issues to have been important, why wasn't action taken _before_ this recent event?


----------



## GarveyLives (Jan 21, 2018)

*Can we talk about Carillion*

An alternative analysis to that recently available in the corporate media:

_"Carillion, momentarily the biggest and brightest star in the UK construction firmament, has crashed and burned. Brian Parkin explains that the company wasn’t an exception, but all too typical of the spiv business model the dominates UK construction ..."_

Carillion: a chronicle of a blacklisting crook foretold (click for more)


----------



## existentialist (Jan 21, 2018)

GarveyLives said:


> Public relations slogans and waffle.
> 
> If she considered these issues to have been important, why wasn't action taken _before_ this recent event?


Quite.


----------



## existentialist (Jan 21, 2018)

teqniq said:


> In a parallel universe perhaps
> 
> 
> 
> Treasury Minister says backlash to Carillion must not 'throw baby out with the bath water'


Oh, here we go. Laying the ground for the idea that it is possible to be too draconian in dealing with the crooked antics of these shyster companies, so that any meaningful sanction or tightening of regulation can be painted as extremism, or "throwing the baby out with the bathwater".

The baby shat in the bathwater - that's why we're even throwing anything out. We may want to hang onto the baby just long enough to find out why it's incontinent, I'll give her that...


----------



## agricola (Jan 21, 2018)

teqniq said:


> In a parallel universe perhaps
> 
> Treasury Minister says backlash to Carillion must not 'throw baby out with the bath water'





> “We do have lots of public sector contracts with the private sector that work extremely well, whether it’s Crossrail, the docklands light railway, energy companies, water companies, that have brought down bills for people and are actually providing a great service.”


----------



## BemusedbyLife (Jan 21, 2018)

existentialist said:


> Worst case - they enact some shite legislation that actually makes life more difficult for all businesses, but which huge corporations can easily wriggle out via sweetheart deals and lawyering up.
> 
> Likely case - it's all words, and the whole matter will be quietly dropped just as soon as it's expedient to do so.
> 
> ...


All the pension schemes I know about (ie mine) are managed from outside the company, I thought that was the law but perhaps I'm wrong? I believe that if there is a shortfall then the company is responsible for making that up but a lot of them put that on the back burner since it costs so much money. I worked for Wankers Inc for 2 years after leaving Uni before my job got shipped off to India and my Dad worked there for 12 years (different site) before he got fed up and left to work for himself. About a year ago they sold off the division we both worked for to Even Bigger Wankers PLC and even though we had both left (involuntarily in my case) we got letters from the Pension Fund saying that as part of the deal Wankers Inc had ponied up a billion notes to make sure that the Pension Fund was fully funded otherwise the sale couldn't go through.
I'm pretty sure Carillion knew there was not enough money in the Pension Fund but just kept putting off making it up in the hope that either there would be a massive upsurge in the stock market to make it unnecessary or they would sign some huge deal that would get them rolling in cash. I believe that the 600 million debt on their balance sheet is what they should have put it but haven't, I don't believe they can dip into any money they already paid over. Wasn't there a case of some businessman back in the 80's or 90's doing that and the law was changed?


----------



## Ponyutd (Jan 21, 2018)

Diane Abbott has just asked Jeremy how many a Carillion is.


----------



## cupid_stunt (Jan 21, 2018)

Ponyutd said:


> Diane Abbott has just asked Jeremy how many a Carillion is.


----------



## Rob Ray (Jan 21, 2018)

BemusedbyLife said:


> I thought that was the law but perhaps I'm wrong?



Sadly it's pretty common for firms to appoint their own guys to the pension fund boards, who then treat it like a piggy bank and/or place the sort of half-baked bets on the stockmarket that they'd never make with their own money. Along with the pension holidays they all took under Brown it was a major underlying factor when companies were dealing with "unexpectedly high pension liabilities" back in the mid 2000s and switching their workforces from final salary to working life payouts.


----------



## GarveyLives (Jan 22, 2018)

> He should be put against a wall and shot.



Now, a view from the contruction industry trade press ...

_"The bile that has been directed at *Richard Howson*, former chief executive of Carillion, in the past week has been abhorrent. There are important lessons to be learned but *hurling spew is both nasty and pointless* ..."_

Britain reveals its ugly side in Carillion witch-hunt (click for more)


----------



## teqniq (Jan 22, 2018)

Where is my tiny violin?


----------



## existentialist (Jan 22, 2018)

teqniq said:


> Where is my tiny violin?


Here. It's playing his tune!


----------



## HoratioCuthbert (Jan 22, 2018)

GarveyLives said:


> Now, a view from the contruction industry trade press ...
> 
> _"The bile that has been directed at *Richard Howson*, former chief executive of Carillion, in the past week has been abhorrent. There are important lessons to be learned but *hurling spew is both nasty and pointless* ..."_
> 
> Britain reveals its ugly side in Carillion witch-hunt (click for more)


It wasn't hurled, it was pure projectile and involuntary


----------



## BemusedbyLife (Jan 22, 2018)

teqniq said:


> Where is my tiny violin?


I've got it mine is broken due to recent overuse


----------



## teqniq (Jan 23, 2018)

Labour alleges conflict of interest in oversight of private suppliers


----------



## Chilli.s (Jan 23, 2018)

Less a conflict of interests, more of corruption and semi-criminality. Fuck knows what laws. Morally bent though.


----------



## likesfish (Jan 23, 2018)

thought these CEO's were the jungle cats of capitalism?
 red in tooth and claw.


 think this applies you get the big cash and everything if it works if it doesn't you don't get a safety net.
“I never saw a wild thing sorry for itself. A small bird will drop frozen dead from a bough without ever having felt sorry for itself.”

― D.H. Lawrence, The Complete Poems
tags: dh-lawrence, self-pity Read more quotes from


----------



## gosub (Jan 24, 2018)

likesfish said:


> thought these CEO's were the jungle cats of capitalism?
> red in tooth and claw.
> 
> 
> ...


The Man Who Taught His Asshole to Talk | RealityStudio   seems closer


----------



## GarveyLives (Jan 26, 2018)

How to avoid a Carillion collapse?


----------



## GarveyLives (Jan 26, 2018)

Ponyutd said:


> Diane Abbott has just asked Jeremy how many a Carillion is.


The irony is that I suspect that the people at Carillion who were responsible for its collapse probably look a lot more like you than Diane Abbott does.


----------



## Ponyutd (Jan 27, 2018)

A gentle poking of a politcan. 
So sorry to upset you.


----------



## andysays (Jan 27, 2018)

Ponyutd said:


> A gentle poking of a politcan.
> So sorry to upset you.



Any reason why that politician in particular?

I'm not aware of any way in which Diane Abbott has special responsibility for the Carillion collapse, but maybe you can enlighten us...


----------



## elbows (Jan 27, 2018)

I have seen the same joke elsewhere on the net. My assumption upon seeing it was that it was based on her infamous interview last year where the costings of a policy and associated maths were a train wreck.


----------



## Ponyutd (Jan 27, 2018)

andysays said:


> Any reason why that politician in particular?
> 
> I'm not aware of any way in which Diane Abbott has special responsibility for the Carillion collapse, but maybe you can enlighten us...


Enlightened enough for you. Others got the (weak admittedly) joke.

Who's the 'us'?


----------



## cupid_stunt (Jan 27, 2018)

andysays said:


> Any reason why that politician in particular?
> 
> I'm not aware of any way in which Diane Abbott has special responsibility for the Carillion collapse, but maybe you can enlighten us...



She aimed to blow a million, then a billion, and ended-up blowing a carillion, on extra police.


----------



## Ranbay (Jan 29, 2018)

not read the whole thread, anyone know if old pension are fucked? left in 2009 7 years service.....

not that i think i will make it to pension age mind you


----------



## GarveyLives (Jan 29, 2018)

> not read the whole thread, anyone know if old pension are f***ed? left in 2009 7 years service.....
> 
> not that i think i will make it to pension age mind you



Try:

Carillion collapse: will pensions still be paid?

Carillion: Are pensions on the brink?

I suggest that you contact the Trustees of the specific pension scheme concerned using the contact details that appear on your annual statement.

Good luck.

By the way:

The Pension Protection Fund placed Carillion on watch list _last Autumn_


----------



## GarveyLives (Jan 29, 2018)

With today's news that The Financial Reporting Council is to launch an investiagtion into  KPMG’s audit of the financial statements of Carillion plc covering the years ended 31 December 2014, 2015 and 2016, and additional audit work carried out during 2017, (i.e. whether the 'books' had been 'cooked' and the auditor's role in this?) James Moore, Chief Business Commentator at The Independent, asks a question that many others have probably been asking themselves:

Carillion: Why do regulators sit back and allow scandals like this to happen?


----------



## teqniq (Jan 31, 2018)

And now Crapita looks to be having difficulties

Shares in UK government contractor Capita plunge 40% after profit warning



> Shares in government contractor Capita plunged 40% after it issued a shock profits warning and suspended its dividend payments just weeks after the collapse of construction firm Carillion.
> 
> In the latest blow to the outsourcing sector, Capita’s new boss unveiled a radical overhaul of the group’s finances, giving a damning assessment of a company that he said had become “too complex” and lacking in discipline.
> 
> Jonathan Lewis, who took over as chief executive in December, said the company needed to raise up to £700m through a cash call on shareholders, scrap dividend payouts, and sell non-core parts of the business....


----------



## Teaboy (Jan 31, 2018)

Aye, Crapita have all the hall marks of the next collapse - history looks set to repeat itself.  The only thing you can say is that on the face of it they look to be taking some sort of preemptive action rather than just raiding the bank as much as possible before the inevitable collapse.  I say _looks like_ mind


----------



## agricola (Jan 31, 2018)

Teaboy said:


> Aye, Crapita have all the hall marks of the next collapse - history looks set to repeat itself.  The only thing you can say is that on the face of it they look to be taking some sort of preemptive action rather than just raiding the bank as much as possible before the inevitable collapse.  I say _looks like_ mind



One wonders whether or not the Government has had a word and agreed to take back some of the "less profitable" outsourced things, which is the only realistic way they could turn things around in the short term.  Certainly the  idea that they can sell bits off is surely doomed - given this announcement and what happened when Carillion tried the same thing - as is the idea that they could raise £700 million.


----------



## SpookyFrank (Jan 31, 2018)

Wonder how many too-big-to-fail outsourcing firms need to fail before the government admits that maybe this whole outsourcing model is a crock of shit.


----------



## existentialist (Jan 31, 2018)

teqniq said:


> And now Crapita looks to be having difficulties
> 
> Shares in UK government contractor Capita plunge 40% after profit warning


Couldn't happen to a nicer government teat-sucking abusive and exploitative corporation.


----------



## Teaboy (Jan 31, 2018)

SpookyFrank said:


> Wonder how many too-big-to-fail outsourcing firms need to fail before the government admits that maybe this whole outsourcing model is a crock of shit.



They missed the boat on that.  In opposition Cameron and Osborne correctly slammed New Labour and particularly Brown for his lover affair with outsourcing and PFI.  They could have done something about it when they first got into power and blamed the whole sorry fiasco on Brown, but no, they just carried on like normal as soon as they got the reigns.



agricola said:


> One wonders whether or not the Government has had a word and agreed to take back some of the "less profitable" outsourced things, which is the only realistic way they could turn things around in the short term.  Certainly the  idea that they can sell bits off is surely doomed - given this announcement and what happened when Carillion tried the same thing - as is the idea that they could raise £700 million.



Among the myriad of crap that is outsourcing one of the most fundamental problems is the idea that these companies will tender on pretty much any government contract regardless of what it actually is.  Carillion were fundamentally a builder but at one point they were managing the helpline for the digital TV switch over.  Crapita have their fingers is so many pies I doubt anyone could really say what they actually do.  I've been to meetings with architects who work for Crapita about prison buildings, yet they also are involved in large scale IT schemes, small scale IT helpdesks, accountancy, oversight etc etc

The business model is to hoover up government contracts but then bring in the expertise from outside, but if you have little in-house expertise how on earth can you put in a realistic bid in the first place?  The numerous massive Government IT contract failures show this the best, the fact no software tech giants were interested in bidding should have had alarm sirens sounding all over the place.

The only conclusion is that these companies exist solely to hoover up government money, the lobbyists for these companies crawl around parliament with their flashy suits and massive entertainment expenses accounts. Anybody in Parliament or the civil service for that matter who have / still believe in this system are either short sighted complacent fools or outright corrupt.


----------



## lizzieloo (Feb 3, 2018)

Found this on eBay, thought yous might be interested.

 

 
Management Guide for Suppressing Employees  | eBay


----------



## Pickman's model (Feb 5, 2018)

academic libraries concerned about capita collapse - from the sconul newsletter


----------



## SpackleFrog (Feb 5, 2018)

agricola said:


> Corbyn doesn't control Carwyn Jones, even though it would be better for Carwyn Jones if he did.



I wonder if Blair would have had a similar attitude if he was Labour leader now and he was unhappy with positions taken by Welsh Labour? 

Corbyn may not have the power to decide Welsh Labour policy directly but I think it's a cop-out to absolve him of responsibility for Welsh Labour. I'd add that he has no excuses for not taking a more direct approach to Labour councils in England - in Sheffield where I live for example there's been no change in policy on PFI deals, just look at this for example: Sheffield taxpayers to continue to pay off Amey PFI deal '20 years after contract finishes'


----------



## agricola (Feb 5, 2018)

SpackleFrog said:


> I wonder if Blair would have had a similar attitude if he was Labour leader now and he was unhappy with positions taken by Welsh Labour?
> 
> Corbyn may not have the power to decide Welsh Labour policy directly but I think it's a cop-out to absolve him of responsibility for Welsh Labour. I'd add that he has no excuses for not taking a more direct approach to Labour councils in England - in Sheffield where I live for example there's been no change in policy on PFI deals, just look at this for example: Sheffield taxpayers to continue to pay off Amey PFI deal '20 years after contract finishes'



Blair was much more interventionist in Welsh Labour, thats why he tried to impose Ron Davies and Alun Michael until reality intervened.  I suppose the difference between Blair and Corbyn is that, in Welsh terms at least, what Corbyn has done / is doing isn't going to drive hundreds of thousands of voters away.

I agree that Corbyn should be more interventionist with regards to Councils though - not only Sheffield but whats happened in Lambeth and Lewisham have not been mentioned (let alone challenged), though having seen the reaction to even the tiniest bit of official disapproval over HDV I can understand why he might be reluctant to.  However as most of those councillors (especially Lambeth's) are his bitter enemies they should probably be stamped on sooner rather than later.


----------



## SpackleFrog (Feb 5, 2018)

agricola said:


> Blair was much more interventionist in Welsh Labour, thats why he tried to impose Ron Davies and Alun Michael until reality intervened.  I suppose the difference between Blair and Corbyn is that, in Welsh terms at least, what Corbyn has done / is doing isn't going to drive hundreds of thousands of voters away.



I wouldn't be so sure that it won't cost votes. Last year just a month before Labour recorded a huge increase in vote share and seats in the GE, in the Welsh Assembly elections they suffered a fairly significant swing against them and lost a seat, which I reckon had more to do with their record in Wales than the party nationally. And it doesn't help Corbyn's image if his response to Welsh Labour's continuing support for privatisation is to say that he's powerless to stop them, in fact in the long run that's a sure fire way for him to lose support.

I agree Blair's attempts to impose candidates were obviously unrealistic and awful but lets be clear, Corbyn doing nothing about the shit show that is Welsh Labour is not a viable plan. The GE result last year gave him all the ammunition in the world to be bold in putting forward a clear vision of what Labour should be offering and he's point blank not doing it.



agricola said:


> Blair was much more interventionist in Welsh Labour, thats why he tried to impose Ron Davies and Alun Michael until reality intervened.  I suppose the difference between Blair and Corbyn is that, in Welsh terms at least, what Corbyn has done / is doing isn't going to drive hundreds of thousands of voters away.
> 
> I agree that Corbyn should be more interventionist with regards to Councils though - not only Sheffield but whats happened in Lambeth and Lewisham have not been mentioned (let alone challenged), though having seen the reaction to even the tiniest bit of official disapproval over HDV I can understand why he might be reluctant to.  However as most of those councillors (especially Lambeth's) are his bitter enemies they should probably be stamped on sooner rather than later.



Exactly - the NEC tried to be reasonable and polite over Haringey and was met with a tantrum from Labour council leaders. No point being reasonable with these snakes.


----------



## teqniq (Feb 6, 2018)

Former Carillion directors branded 'delusional' at MPs' Q&A



> ...In a joint statement issued after the hearing, committee chairs Frank Field and Rachel Reeves said: “This morning a series of delusional characters maintained that everything was hunky dory until it all went suddenly and unforeseeably wrong.
> 
> “We heard variously that this was the fault of the Bank of England, the foreign exchange markets, advisers, Brexit, the snap election, investors, suppliers, the construction industry, the business culture of the Middle East and professional designers of concrete beams.
> 
> “Everything we have seen points the fingers in another direction – to the people who built a giant company on sand in a desperate dash for cash.”...


----------



## agricola (Feb 6, 2018)

SpackleFrog said:


> Exactly - the NEC tried to be reasonable and polite over Haringey and was met with a tantrum from Labour council leaders. No point being reasonable with these snakes.



Indeed, but it would be a big ask to bin them all off and it would almost certainly result in days / weeks of overwhelmingly negative media coverage that would be better spent on covering the disaster that is the Brexit negotiations.  It might be better to let reality / economics wipe them all out.


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## GarveyLives (Feb 6, 2018)

With apologies for returning to the thread's original subject matter, some recent developments are shown below:

House of Commons Work and Pensions and BEIS Committees Carillion joint inquiry

Pension scheme trustees questioned on Carillion

Carillion knew of pension risk for six years - but continued paying huge dividends and racking up more debt

Ex-Carillion boss denies prioritising dividends over pensions

Carillion boss says board should have asked more questions

Former Carillion directors branded 'delusional' at MPs' Q&A


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## GarveyLives (Feb 6, 2018)

... apologies for duplicating the " branded delusional" report.


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## SpackleFrog (Feb 7, 2018)

agricola said:


> Indeed, but it would be a big ask to bin them all off and it would almost certainly result in days / weeks of overwhelmingly negative media coverage that would be better spent on covering the disaster that is the Brexit negotiations.  It might be better to let reality / economics wipe them all out.



We're at years of negative media coverage now as a result of not binning them off - and it will continue until they are driven out of the party.


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## Chilli.s (Feb 7, 2018)

So bosses prioritise dividend payments not pension liability. For years. How is this not fraud.


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## Teaboy (Feb 7, 2018)

Chilli.s said:


> So bosses prioritise dividend payments not pension liability. For years. How is this not fraud.



Because fraud is illegal and robbing pensions to pay dividends isn't.  Makes you wonder who made the rules really.


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## existentialist (Feb 7, 2018)

Teaboy said:


> Because fraud is illegal and robbing pensions to pay dividends isn't.  Makes you wonder who made the rules really.


We know exactly who makes the rules.


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## teqniq (Feb 12, 2018)

Why am I not surprised?

Carillion: accountants accused of 'feasting' on company


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## 1927 (Feb 12, 2018)

teqniq said:


> Why am I not surprised?
> 
> Carillion: accountants accused of 'feasting' on company


Wrong link!


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## teqniq (Feb 12, 2018)

Weird, it's disappeared.


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## A380 (Feb 12, 2018)




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## teqniq (Feb 12, 2018)

teqniq said:


> Why am I not surprised?
> 
> Carillion: accountants accused of 'feasting' on company




This was part (in fact the main bit before it got to stuff about employees) of the above linked article but has since been removed, the title has also changed



> Brief :  Details of £72m in fees in 10 years emerge as 11,800 workers await fate after company’s collapseMPs have accused the “big four” accountancy firms of “feasting on what was soon to become a carcass” as it emerged they banked £72m for work linked to collapsed government contractor Carillion in the years leading up to its financial failure.Less than a fortnight before Carillion’s auditor KPMG is due to face questions from MPs on two select committees, the accountant and rivals Deloitte, EY and PricewaterhouseCoopers (PwC) submitted evidence to the inquiry.



from

• Carillion: accountants accused of 'feasting' on company | echoService


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## 1927 (Feb 12, 2018)

Why have the Guardian taken it down I wonder?


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## GarveyLives (Feb 27, 2018)

More comment and 'revelations':

Carillion: Former director ‘dumped’ shares in bankrupt construction company at first possible moment

Carillion inquiry: missed red flags, aggressive accounting and the pension deficit

Slaughters warned Carillion board about accounting disclosures last May, leaked minutes reveal

Whistleblower warned Carillion bosses about irregularities, MPs told


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## not-bono-ever (Feb 27, 2018)

I have worked in companies where the accountants/ FD's  have walked out or refused to sign anything that is a smidgeon iffy or not transparent  - Carillion seemed to have a huge turnover of FD's in a very short period


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## GarveyLives (Mar 1, 2018)

In modern business-speak, the Chairman sets "the tone from the top"  ...

Carillion chairman ‘no grip of reality’ before vast writedown







*"Boardroom minutes record Green, who had been on the board since 2011 and chairman since 2014, expressing his belief that “work continued toward a positive and upbeat announcement for Monday [10 July], focusing on the strength of the business as a compelling and attractive proposition” – five days before it announced the £845m profit warning that marked the beginning of the end."*​


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## GarveyLives (Mar 1, 2018)

GarveyLives said:


> The _fund managers_ hit by Carillion's collapse
> 
> Retail investors bear the brunt of Carillion losses
> 
> Carillion PLC: Major Shareholders



Major shareholders views on Carillion collapse published (click here)


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## GarveyLives (Mar 7, 2018)

_"Key investors in Carillion claimed the board focused more on their own pay than the company’s performance ..."_

Carillion bosses focused on their own pay rather than the company


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## GarveyLives (Mar 19, 2018)

The Financial Reporting Council (FRC) has now commenced an investigation into the conduct of *Richard Adam* and *Zafar Khan*, former Group Finance Directors of Carillion plc and members of The Institute of Chartered Accountants in England and Wales  ...

Investigation into the preparation and approval of the financial statements of Carillion plc


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## pogofish (Mar 20, 2018)

And if I couldn't be more staggered by anything to do with Carrillion.

It emerged recently that staff on their contract here had to pay a holding company set-up by Carrillion in order to get paid their wages.

Pay-for-pay - Whatever the fuck next..!


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## GarveyLives (Mar 29, 2018)

_"Carillion agreed to deposit Richard Howson’s share-related bonuses after his contract was terminated into *an account that it would not have to disclose to shareholders*, the Carillion joint inquiry has revealed ..."_

Carillion agreed secret bonus account for Richard Howson






*He contested the claim that he was not a "good leaver"*​


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## GarveyLives (Apr 14, 2018)

Carillion Construction had *£6.9bn* liabilities when it collapsed


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## Chilli.s (Apr 15, 2018)

It's all gone reely quiet about this hasn't it.


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## GarveyLives (Apr 16, 2018)

> It's all gone reely quiet about this hasn't it.



Try here:

Carillion: Has the worst of it just begun?

_"The government is calling for businesses that dealt with Carillion in the lead up to the construction giant’s collapse to assist with the statutory investigation ..."_

Call for evidence on Carillion business dealings


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## GarveyLives (May 13, 2018)

_"Former bosses of Carillion, the construction group that collapsed with debts of as much as £7bn, should face a formal inquiry into their fitness to serve as company directors, MPs will say this week ..."_

Ex-Carillion bosses should face board ban probe, MPs to say


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## GarveyLives (May 24, 2018)

Two scandals collide:

I worked for Carillion until it collapsed – and _now the Home Office is trying to deport me_


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## SpookyFrank (Aug 16, 2018)

In an unprecedented new achievement in the field of taking the absolute fucking piss, former Carillion director Mark Davies has been put in charge of HS2. 

Former Carillion boss takes reins of UK's HS2 project


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## GarveyLives (Aug 21, 2018)

Updates:

Former directors face questioning over Carillion's collapse

Carillion's PwC liquidators earning up to _£1,100 an hour_

Former Carillion building boss joins Kier

A documentary is due to be screened tomorrow:


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## cupid_stunt (Aug 23, 2018)

That documentary is well worth watching, it beggars belief how these crooks got away with millions.


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## SpookyFrank (Aug 24, 2018)

How liquidation and administration of failed companies works is a whole issue by itself. From the stupid sums of money the big four pay themselves to do what seems like a pretty simple job, namely telling creditors to go fuck themselves, to the fact that Mike Ashley can somehow sell a load of HoF stock that hasn't been paid for and keep on thousands of staff whose pensions have evaporated.

E2a: Also how is it carillion's auditors KPMG face no penalty for signing off on fraudulent books? Why bother doing your job properly if you get paid as much for rubber-stamping everything?


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## Teaboy (Aug 24, 2018)

SpookyFrank said:


> How liquidation and administration of failed companies works is a whole issue by itself. From the stupid sums of money the big four pay themselves to do what seems like a pretty simple job, namely telling creditors to go fuck themselves, to the fact that Mike Ashley can somehow sell a load of HoF stock that hasn't been paid for and keep on thousands of staff whose pensions have evaporated.



Yup, the exact same handful of companies that merrily sign off the dodgy books year after year.  Heads they win, tails they win.


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## GarveyLives (Aug 26, 2018)

> E2a: Also how is it carillion's auditors KPMG face no penalty for signing off on fraudulent books? ...



'Investigation' currently in 'progress' ...

Update on the Financial Reporting Council investigations in relation to Carillion, 16 May 2018 (click for more)


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## SpookyFrank (Aug 26, 2018)

GarveyLives said:


> 'Investigation' currently in 'progress' ...
> 
> Update on the Financial Reporting Council investigations in relation to Carillion, 16 May 2018 (click for more)



There can be no meaningful enforcement against any of the big four though surely?


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## agricola (Aug 26, 2018)

SpookyFrank said:


> There can be no meaningful enforcement against any of the big four though surely?



Not with the current system, no. 

What needs to happen is for the law to be changed to make it easier for investors, shareholders and creditors to go after an accountancy firm if it signs off on a firms accounts that subsequently prove to be falsified or wrong.  Combine that with bringing in a proper "honest services" offence and more damage would be done to that lot than anything under the current system.


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## SpookyFrank (Aug 26, 2018)

agricola said:


> Not with the current system, no.
> 
> What needs to happen is for the law to be changed to make it easier for investors, shareholders and creditors to go after an accountancy firm if it signs off on a firms accounts that subsequently prove to be falsified or wrong.  Combine that with bringing in a proper "honest services" offence and more damage would be done to that lot than anything under the current system.



It's not just a question of the law, but the fact the big four are all too big to fail. They're all balls deep in major public sector projects; this week's Private Eye claims they've already made north of ten million between them 'consulting' on the HS2 project, even though not five feet of track has been laid and there is still no detailed budget, timetable, or plan in place for those five feet or any other.

If there is no plausible way of bringing these jokers to heel, then there's absolutely nothing to stop them taking the piss even more than they do already.


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## GarveyLives (Jan 3, 2019)

Another day, another investigation ...

_"The former bosses of Carillion have been grilled by government investigators 11 months after the construction giant collapsed carrying nearly £7bn in debt ..."_

Former Carillion bosses quizzed as government probe deepens (click for more)


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## SpookyFrank (Jan 4, 2019)

GarveyLives said:


> Another day, another investigation ...
> 
> _"The former bosses of Carillion have been grilled by government investigators 11 months after the construction giant collapsed carrying nearly £7bn in debt ..."_
> 
> Former Carillion bosses quizzed as government probe deepens (click for more)



Ooh, they might get banned from holding directorships.

Lucky they kept the money they lost under ten billion, or they might have been at risk of getting sent to bed with no supper.


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## Poi E (Jan 4, 2019)

Just hand enforcement over to the SEC. Frightening bunch from personal experience.


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## Poi E (Jan 5, 2019)

Very good idea.


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## yield (Feb 6, 2019)

Interserve agrees rescue plan with creditors
06/02/19


> Interserve sells services, including probation, cleaning and healthcare, and is involved in construction projects.





> Interserve has a market value of £17m, down from £500m in 2017, and a turnover of £3.2bn. About 70% of Interserve's turnover comes from government contracts.
> 
> Stephen Rawlinson, an analyst at Applied Value, said that Interserve's woes are not as bad those of fellow outsourcer Carillion, which collapsed in January 2018 and put thousands of jobs at risk and cost taxpayers £148m.
> 
> "For existing shareholders, they're between a rock and a hard place, they have been for the last six to 12 months, so there's no difference, but now there is hope," he told the BBC.





> "I don't think another Carillion is likely, as the government has realised that to put these companies into liquidation is a very foolish thing to do."
> 
> However, he warned that the deal had not yet been approved by shareholders, and that it would probably take up to seven years before Interserve returned to profitability.


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## brogdale (Feb 6, 2019)

yield said:


> Interserve agrees rescue plan with creditors
> 06/02/19


Cute timing; like the tories could stomach this at the moment!
This really does scream 'too big to fail' & moral hazard.


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## brogdale (Feb 6, 2019)

Neoliberalism's great, innit?

The fate of 45,000 UK workers and thousands of Govt. service contracts hangs in the balance of a wealth defence battle between NY Hedgies and bloated Eurobankers


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## brogdale (Mar 15, 2019)

So the Interserve shareholders have rejected the debt for equity 'haircut' deal and opted instead to have their head cut off. Looks like the corp will go into a (pre-pack) administration this pm in which E&Y will transfer ownership of the outsourcing provider to the creditor banks.

Can only imagine that Coltrane and other big institutional shareholders who voted themselves out of ownership fancy their chances at picking up bits and pieces of the bloated entity at knock down prices when the banks seek to offload their new acquisition.

Workers must be nervous.


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## brogdale (Mar 15, 2019)

When capitalism has to tell the workers they'll get paid..


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## pesh (Mar 15, 2019)

where does it say they'll get paid?


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## brogdale (Mar 15, 2019)

pesh said:


> where does it say they'll get paid?



In the text that i didn't screenshot; sorry. Here's where they _say _they'll be paid. Should have declared a persoanl interest too; my eldest works for Interserve.


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## yield (Mar 16, 2019)

brogdale said:


> In the text that i didn't screenshot; sorry. Here's where they _say _they'll be paid. Should have declared a persoanl interest too; my eldest works for Interserve.


Good luck to the workers. Hope things work out for your eldest brogdale

Outsourcing Giant Interserve with 65,000 Employees Collapses
Wolf street. 15/03/19


> More importantly, Interserve’s demise lends credence to the notion that Carillion’s collapse last year, rather than being a one-off episode, was in actual fact the swan song of a deeply flawed and dying business model that has made a very small few fabulously rich while saddling future generations with huge amounts of debt for increasingly shoddy public services the private sector is no longer able to provide.





> To make matter even worse, banks and investors that had already incurred large losses on Carillion and are now having to take over Interserve’s business are likely to be even more reticent about backing the industry, particularly as it faces greater scrutiny from regulators as well as the rising risk of local authorities taking contracts back in-house.
> 
> The ultimate irony is that some of the same banks that feasted on the absurdly high interest rates the UK government agreed to pay on its PFI deals — at times as high as 3.75 percentage points higher than the cost of government borrowing — are now themselves, thanks to Interserve’s collapse, public service providers.


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## brogdale (Mar 16, 2019)

yield said:


> Good luck to the workers. Hope things work out for your eldest brogdale
> 
> Outsourcing Giant Interserve with 65,000 Employees Collapses
> Wolf street. 15/03/19


Thanks yield ...my worry for the workers is that the banks, as 'accidental' owners will seek to break up the bloated corp, asset-strip and flog off to the vultures. As the article says, the tide is beginning to flow against the low-risk/high return ripping off of public money. 

Suspect my lad's job will, if the worst happens, be in-sourced back in from the Interserve/LLP  ...but who knows? Worrying times; not to mention the thousands of 'small creditors' who'll get fuck all.


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## GarveyLives (May 25, 2019)

A year later, the blame game continues:

Carillion's ‘relationship with auditors too comfortable’

Carillion’s collapse: lessons for the industry


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## GarveyLives (Jan 13, 2020)

GarveyLives said:


> 'Investigation' currently in 'progress' ...
> 
> Update on the Financial Reporting Council investigations in relation to Carillion, 16 May 2018 (click for more)





> _"The Financial Reporting Council has confirmed that the publication of the findings of its probe into the audit of failed outsourcer Carillion have been delayed until *summer 2020* due to the ‘scale and complexity’ of the investigation ..._



Carillion audit probe unlikely before summer due to complexity


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## existentialist (Jan 14, 2020)

GarveyLives said:


> Carillion audit probe unlikely before summer due to complexity


Is that the sound of a can being kicked desultorily down the road I hear?


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## Chilli.s (Jan 14, 2020)

existentialist said:


> Is that the sound of a can being kicked desultorily down the road I hear?


Deep into the long grass of August I recon.


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## SpookyFrank (Jan 14, 2020)

GarveyLives said:


> Carillion audit probe unlikely before summer due to complexity



I bet it wouldn't be so complex if I'd nicked seven billion quid.


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## alex_ (Jan 14, 2020)

SpookyFrank said:


> I bet it wouldn't be so complex if I'd nicked seven billion quid.



your team of barristers would be trying their hardest too.


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## GarveyLives (Feb 8, 2020)

GarveyLives said:


> Carillion audit probe unlikely before summer due to complexity


Carillion's Modern Slavery Act compliance and immigration status checking procedures also appear to have left something to be desired:

Man jailed for supplying illegal immigrants to *Carillion* site


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## GarveyLives (Jan 14, 2021)

Eight former executive and non-exective directors of Carillion are to face director disqualification proceedings which have been brought just before the deadline for bringing such proceedings.

Rehana Azam, national officer of the GMB union, said: "This issue is at the heart of what's wrong with outsourced services - _when things go wrong *nobody takes responsibility*_.

"It's a disgrace and a dire legacy of this Government that, three years on from the collapse of Carillion, they are only now moving to make senior people take responsibility.

"We need to see an end to corrupted fat cats making a buck out of our public services. These services should be run in-house and for the public, not shareholders."

Noble Francis, economics director of the Construction Products Association, said it was “_disappointing that *it had taken so long for directors to be held to account*_”, adding that it was “essential that _*all*_ those responsible for the liquidation of Carillion are brought to justice, whether they are senior management or auditors”.

Eight Carillion directors face legal bans


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## GarveyLives (Feb 27, 2021)

GarveyLives said:


> ... Rehana Azam, national officer of the GMB union, said: "This issue is at the heart of what's wrong with outsourced services - _when things go wrong *nobody takes responsibility*_.
> 
> "It's a disgrace and a dire legacy of this Government that, three years on from the collapse of Carillion, they are only now moving to make senior people take responsibility.
> 
> ...




I note that the person who was responsible for Carillion's legal and governance practices at the time of its collapse is now, among other things, involved in the governance of his former university.   He seems interestingly silent on the identity of his former employers.

Whatever he was doing as the executive responsible for legal and governance matters when Carillion collapsed does not appear to have resulted in him facing any public reprimand.


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## Pickman's model (Feb 27, 2021)

GarveyLives said:


> I note that the person who was responsible for Carillion's legal and governance practices at the time of its collapse is now, among other things, involved in the governance of his former university.   He seems interestingly silent on the identity of his former employers.
> 
> Whatever he was doing as the executive responsible for legal and governance matters when Carillion collapsed does not appear to have resulted in him facing any public reprimand.


If people do learn more from their mistakes than their successes Leicester have landed a great catch


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## GarveyLives (Jan 12, 2022)

It seems that those most likely to benefit from this affair in the immediate future are QCs:

Carillion auditor _admits_ ‘misleading’ financial watchdog

Carillion tribunal: Former *KPMG* staff turn on each other


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## GarveyLives (Mar 11, 2022)

Pickman's model said:


> If people do learn more from their mistakes than their successes Leicester have landed a great catch



He will be able to tell them what he learned from this:

Carillion failings led to _fatal_ Stonehaven derailment


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## GarveyLives (May 18, 2022)

GarveyLives said:


> Carillion audit probe unlikely before summer due to complexity





> _"*KPMG* is set to receive one of the biggest ever fines from the Financial Reporting Council after its auditors deliberately provided audit inspectors with misleading information from the audits of Carillion and Regenersis ..."_



*KPMG* to be fined *£14m* over _falsifying Carillion documents_


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## Brainaddict (May 18, 2022)

GarveyLives said:


> *KPMG* to be fined *£14m* over _falsifying Carillion documents_


That's peanuts to them. Pathetic that the fines can't be higher than that. The lawsuit sounds more promising as something that might actually bother them.


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