Carillion collapse: Why we shouldn’t blame it on the banks
Any number of people will have views about who is to blame for the collapse of Carillion. This article highlights some targets. I truly hope this episode gives very deep pause for thought for those in local government who celebrate procurement for its own sake and often have very little knowledge of the things they are buying and the professional context associated with them. When procurement becomes an end rather than a means we run the risk of this happening. This story tells us:
The banks shouldn’t escape criticism over Carillion. They backed a deeply flawed model, and lent too generously to it.
But, if we’re assigning blame for what went wrong they’re way down the list and they will pay a price for their mistakes by incurring substantial losses.
At the front of the queue should be Carillon’s executives, for allowing the business to get into such a dire state in the first place. By the way, several of them are in receipt of generous payoffs while workers, many of whom will today be losing their jobs, have to make do with small cheques from the Insolvency Services to tide them over while their unemployment claims are processed.
Then there are the ministers and civil servants who handed a vast array of vital services to Carillion, including after its problems emerged.
Want more? How about the accountancy firms who advised on the scandalous private finance initiative (PFI) contracts Carillon was such a big player in.