You can read 19 more articles this month
BRITAIN’s big four accountancy firms have been savaged by MPs who have accused them of “feasting on the carcass” of collapsed outsourcing giant Carillion and collecting more than £70 million in the process.
MPs from the business and pensions committees, who are conducting a joint inquiry into Carillion’s demise, have published a breakdown of fees collected by KPMG, PricewaterhouseCoopers (PwC), Deloitte and Ernst & Young.
It shows that the firms have pocketed a total of £71.6m in Carillion-related work since 2008, including on its pension schemes.
Labour MP Frank Field, who heads the work & pensions committee, said: “The image of these companies feasting on what was soon to become a carcass will not be lost on decent citizens.”
He said all of the big four had done “extensive — and expensive — work” for the construction and outsourcing firm.
Mr Field blasted: “PwC managed to play all three sides — the company, pension schemes and the government — to the tune of £21m and are now being paid to preside over the carcass of the company as special managers.”
According to information published by the committees, KPMG has banked £20.2m in fees since 2008, PwC £21.1m, Deloitte £12m and Ernst and Young £18.3m.
Carillion’s liquidation last month left in its wake a £900m debt pile, a £590m pension deficit and hundreds of millions of pounds in unfinished public contracts.
A total of 989 jobs have been lost since, with 6,668 saved out of the previous directly employed workforce of 18,000.
The accountancy watchdog is now investigating KPMG over its audits of Carillion under the Audit Enforcement Procedure.
Labour MP Rachel Reeves, chair of the business committee and co-chair of the inquiry, said: “Either KPMG failed to spot the warning signs or its judgement was clouded by its cosy relationship with the company and the multimillion-pound fees it received.”
In an 18-page letter to MPs, KPMG chairman Bill Michael said that its audit work was “appropriate and responsible,” but admitted that lessons must be learned from Carillion’s collapse.
KPMG bosses will be grilled about their role by MPs next week.
A KPMG spokeswoman said: “We take the questions that have been asked of our profession in recent weeks very seriously and we welcome the opportunity to appear before the joint committee on February 22 and assist the inquiry with their investigations.”
Last week former Carillion executives were branded “delusional” and accused of playing the blame game by the MPs, as a damning report revealed how company bosses presided over a string of failures that led to its collapse.
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by joining the 501 club.
Just £5 a month gives you the opportunity to win one of 17 prizes, from £25 to the £501 jackpot.
By becoming a 501 Club member you are helping the Morning Star cover its printing, distribution and staff costs — help keep our paper thriving by joining!
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by become a member of the People’s Printing Press Society.
The Morning Star is a readers’ co-operative, which means you can become an owner of the paper too by buying shares in the society.
Shares are £1 each — though unlike capitalist firms, each shareholder has an equal say. Money from shares contributes directly to keep our paper thriving.
Some union branches have taken out shares of over £500 and individuals over £100.
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by donating to the Fighting Fund.
The Morning Star is unique, as a lone socialist voice in a sea of corporate media. We offer a platform for those who would otherwise never be listened to, coverage of stories that would otherwise be buried.
The rich don’t like us, and they don’t advertise with us, so we rely on you, our readers and friends. With a regular donation to our monthly Fighting Fund, we can continue to thumb our noses at the fat cats and tell truth to power.
Donate today and make a regular contribution.