700-plus jobs safeguarded as railway contracts of collapsed firm moved

● Good news for workers as MPS grill pensions regulator and Carillion auditors

A significant number of collapsed construction giant Carillion’s Network Rail (NR) contracts have been acquired by Amey Rail Limited, safeguarding 700 jobs, it emerged yesterday.

Network Rail said the sale provided reassurance to the rail industry and continuity for Carillion’s rail projects throughout the UK. The transfer of NR contracts operated by Carillion Construction Limited includes projects in the East Midlands, London and northwest England.

It came as MPS yesterday grilled the auditors of Carillion and officials from the Pensions Regulator over their role in the company’s implosion.

Members of both the work and pensions, and business committees believe they have a “growing pile of evidence” that those involved with Carillion, including investors and hedge funds, saw warnings of its demise.

Michael Jones of Deloitte, an internal auditor at Carillion, told MPS he did not attend a meeting of the company’s audit committee which agreed a writedown figure, saying it wasn’t unusual not to attend every meeting.

Rachel Reeves, who chairs the business committee, said: “It might not be unusual, but I find it quite surprising.”

Frank Field, chair of the work and pensions committees, said it was “extraordinary” Carillion was coming up with a writedown figure that was then just accepted by the auditor.

Field also asked why the Pensions Regulator did not take action to make company executives address the growing pensions deficit.

Lesley Titcomb, chief executive of the regulator told MPS that Carillion was threatened with action and had agreed to pay an extra £85 million into pensions. But Field complained that the money would be paid over 15 years, with nothing paid for two years. “Why did you not use your powers to get money to pensions?” he asked.

Titcomb said threatening action was often enough to ensure action was taken, but acknowledged that “difficult judgements” were made.

More than 1,000 former Carillion workers have lost their jobs since the company went into liquidation, and its external auditor KPMG is facing a probe by the Financial Reporting Council.

Field added: “We imagined that regulators regulate, and auditors audit. We were told this morning, however, that these highly paid individuals are mere spectators, commentators at best, certainly not referees, at the mercy of reckless and self-interested directors.”