Carillion had £1.6bn ‘goodwill’ as asset on its books

MPS HAVE expressed surprise that the biggest asset on the books of collapsed construction giant Carillion was £1.57bn of “goodwill”.

The chairs of two Parliamentary select committees questioned the head of an independent regulator on whether it was good practice to have so much goodwill on the balance sheet.

Stephen Haddrill, chief executive of the Financial Reporting Council (FRC) said it was not, but he added: “It’s not untypical.”

Mr Haddrill came under fierce questioning from members of the Work and Pensions and Business Committees on why something was not done to prevent the spectacular collapse of Carillion.

He revealed the FRC had been “actively monitoring” Carillion for six months before the company went into liquidation, but it was not public knowledge and no public statements were made.

Leeds West MP Rachel Reeves, who chairs the Business Committee, said investors should have the right to know a company was being monitored, but Mr Haddrill said there was a system of confidentiality clauses in place.

Frank Field, who chairs the Work and Pensions Committee, said he did not know what “goodwill” meant, noting the item disappears once a company is in trouble. Ms Reeves said the £1.57bn figure was “surprising”, adding: “It was only goodwill that kept the assets high.”

Last night it was revealed that the training of apprentices caught up in the collapse of Carillion has been transferred to the industry’s training board. There were fears they would not be paid after today, putting their training in doubt. A Department of Education spokesman said: “CITB has already secured new employment, with wages, for over half of the apprentices and is working around the clock to find alternative employers for the others.”