Carillion chiefs face ‘judgment day’ as report looms

FORMER directors at bust Government contractor Carillion face a ‘judgment day’ over the implosion of the firm two years ago this week.

The National Audit Office is set to publish the result of its investigation into Whitehall’s handling of around 420 public sector contracts with Carillion, including multi-million pound tenders to build and manage hospitals, roads, prisons and schools. The spending watchdog’s report, due imminently, is expected to shed light on the Government’s handling of the collapse on January 15, 2018, and how the firm’s public sector contracts were awarded.

Red flags were raised over Carillion’s finances in July 2017, when it issued the first of three profit warnings. But it announced £1.9 billion of new Government work after that warning, including two joint-venture deals for the

HS2 high-speed rail link worth £1.3 billion. One focus of the investigation has been Carillion’s heavily loss-making PFI contracts to build two new hospitals in Liverpool and the West Midlands, which stalled when the firm failed with £7 billion of liabilities.

Frank Field, the former MP who co-chaired the 2018 investigation into Carillion by two select committees of MPs, said it is a ‘tragedy’ the hospitals remain unfinished and that the NAO report marks the beginning of ‘judgment day for Carillion bosses’.

He added: ‘This will be the start of the process of bringing justice against the Carillion bosses who presided over such a catastrophe, when they were the only people who appear to have benefited by lining their own pockets.’ The former bosses – including chief executive Richard Howson and finance chiefs Richard Adam and Zafar Khan – could face a ban from acting as company directors under a separate investigation by the Insolvency Service.

Gail Cartmail, assistant general secretary of the Unite union, said: ‘Given the extraordinary damage caused by the collapse of Carillion, it is jaw-dropping there have been no criminal prosecutions.’