GOING OFF THE RAILS
Tories ‘must answer’ on Carillion deal storm Ailing firm handed huge public contracts
THE Tories are under pressure to explain why they handed billions of pounds of public contracts to stricken company Carillion.
The construction giant is teetering on the edge of collapse, putting thousands of jobs and services in danger.
Labour wants the Government to spell out why it continued to award the firm lucrative state contracts despite knowing it was at risk.
Carillion runs massive railway building projects as well as being responsible for services at schools, prisons and NHS hospitals.
Shadow Cabinet Office Minister Jon Trickett said: “Alarm bells have been ringing for over six months... so the Government must [say] what due diligence measures were undertaken before awarding contracts to Carillion worth billions.”
Unions said the Government must take the contracts in house. Carillion, which has debts of £1.5billion, issued a profit warning in July. Days later it was given an HS2 rail contract worth £1.4billion and a £158million MoD deal. Carillion issued a second profit warning in September. Weeks later it got a £62million rail contract. The Cabinet manual says firms that issue profit warnings are “high risk”. Carillion chairman Philip Green, who urged people in 2015 to vote Tory, was an adviser to then- Prime Minister David Cameron. Ministers held emergency talks with the firm and banks this weekend on a possible rescue deal.
Tory chairman Brandon Lewis said the Government is ensuring “all plans and contingency plans are in place”.
Carillion has 19,000 staff in the UK and nearly £3billion of government and private finance initiative deals.