We can’t afford another Carillion
Labour warning over troubled firm’s contracts worth millions
THE SNP Government were last night urged not to leave services vulnerable to the fall of private contractors.
Labour’s warning came as it emerged troubled firm Capita have hundreds of millions of public contracts in Scotland.
Capita this week issued a profit warning – two weeks after the collapse of giant contractors Carillion which sparked fears for state-funded projects across the UK.
Scottish Labour economy spokeswoman Jackie Baillie said: “Nobody wants firms to fail and it is essential they receive all necessary support to protect jobs and our economy – but we cannot afford another Carillion.
“After the collapse of Carillion, we have another outsourcing firm on the ropes.
“Capita have significant engagement in Scotland, having been issued with hundreds of millions of pounds of contracts from the SNP since 2013.”
Scottish Government contracts with Capita include major IT work and support services.
Scottish Labour published a list of contracts and called for a review.
An IT project worth £325million was awarded to Capita through the NHS in 2013. Contracts include an award for modern apprenticeships through agency Skills Development Scotland.
Smaller contracts were agreed with councils, including Labour-run authorities.
On Thursday, a UK minister insisted Capita’s situation is not “comparable” with Carillion, who were £1.5billion in debt. MPs heard both firms had similar-sized debts, pension deficits in the hundreds of millions and relied on the public sector for half their contracts.
Yesterday, the firm insisted they were committed to providing a “great service” to Scottish clients and pointed to the promise of an extra £21million in pension contributions as a sign of good financial health. They said: “Capita announced January 31 a multi-year transformation programme that will position Capita for the long term. “It will see an increased focus on customer service and improve cost competitiveness, IT and our capital structure to help facilitate growth.” A spokesman for Scottish economy minister Keith Brown claimed Labour had “blundered”. He added: “Capita are solvent and not at immediate risk but in any case, contract values don’t equate to any payments which would be required in the event the company did become insolvent. “Labour are also guilty of huge hypocrisy given the ruinously expensive, Tory-style PFI deals they signed up to when they were in office.”