Government ministers failed to meet with Carillion bosses despite profit warning
2 min read
A profit warning issued by construction giant Carillion last year did not prompt a single top minister to meet the firm before it was awarded public contracts worth more than a billion pounds.
Labour said it was “astonishing” that ministers did not appear sufficiently worried to hold talks with the ailing firm after the warning was issued in July 2017.
It comes after the company collapsed on Monday, putting thousands of jobs at risk and spelling deep trouble for countless smaller businesses.
The Government handed Carillion two HS2 contracts worth £1.4bn just a week after the first profit warning was issued by the firm.
The next day it was awarded two defence contracts worth £158m and in November it won two two contracts to electrify the London to Corby rail route.
Records analysed by the Financial Times show there were no meetings between Carillion and ministers from the Cabinet Office, Department for Transport or Ministry of Defence between July and September last year.
International Trade Secretary Liam Fox met the firm as part of a trade summit on 12 July and schools minister Lord Nash met its Academies Trust on 7 September - both unrelated to the contracts.
Records of meetings for September to December have not yet been released, but Labour has tabled a string of questions to find out whether ministers tried to probe the state of the firm.
The paper also reports that the Government did not appoint a ‘crown representative’ to work with the company, which it usually does if a business is considered high risk.
On Wednesday, Theresa May said two top officials from the Cabinet Office had kept tabs on the firm instead, and that most of the contracts awarded in late 2017 were joint ventures.
Cabinet Office Minister David Lidington has meanwhile said all the necessary tests were passed when the HS2 contracts were awarded, and argued it would have been a “legal risk” to treat the firm differently to others.
The Cabinet Office said: “Officials with specific commercial expertise worked closely with Carillon throughout this period, keeping ministers up-to-date on the situation regularly.”
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