Carillion collapse ‘to cost taxpayers £150m’

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Trade union Unite is claiming the collapse of Carillion is likely to cost taxpayers more than £150m in redundancy payments to former employees of the outsourcer and fees to Big Four accounting firm handling its insolvency

Unite made a Freedom of Information (FoI) request to the Insolvency Service about levels of Redundancy Payments Office (RPO) payments to former Carillion staff. The response said: ‘The total amount we may pay out is approximately £65m of which £50m has been paid so far based on actual claims received.’

The union says that PwC's business recovery service, which was engaged by the Insolvency Service to break up Carillion and transfer its outsourcing contracts to new providers, is expected to have earned around £50m from the company’s collapse.

In addition, Unite says the taxpayer will also have to pick up the bill for the work to complete several of Carillion’s key strategic projects including the Royal Liverpool Hospital and the Midlands Metropolitan Hospital, in Sandwell west midlands. The cost of concluding these projects is expected to be in excess of £100m.

Gail Cartmail, Unite assistant general secretary, in a speech to the Labour party conference said: ‘These latest figures demonstrate that the taxpayers have had to pick up the tab for the greed and recklessness which led to Carillion’s collapse.

‘While the directors and senior executives of Carillion have largely slithered off into lucrative new roles, it is the taxpayers who have been left to pick up the pieces from their mess.

‘These revelations further underline why the government must order a full public inquiry into Carillion’s collapse to not only understand who was responsible for the greatest corporate failure in UK history but also the total cost to the taxpayer.

‘Additionally the police need to undertake an immediate criminal investigation into those responsible for Carillion’s collapse. If no laws were broken then we need better, stronger laws to prosecute the guilty.’

Report by Pat Sweet

Pat Sweet | Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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