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Carillion bosses should face more than a ritual grilling

ANOTHER ritual parliamentary grilling for corporate fat cats, more formulaic shedding of crocodile tears for innocent victims and an obstinate refusal of directors to accept any blame.

Carillion executives are the latest arraigned before the Commons business and pensions committees, to be criticised and to look contrite while claiming to have done all they could to avoid disaster.

When it’s all over, it’s back in the posh cars to the luxurious family homes, with their rewards, pensions packages and personal wealth unthreatened.

In contrast, people on Merseyside, originally promised by Carillion that their new £335 million Royal Liverpool University Hospital would be handed over by March 2017, later revised to the 28th of this month, are now faced with locked gates at the “90 per cent finished” site.

This new hospital, touted as “one of the finest hospitals to be found anywhere in the world,” may not now open before next year.

Officials for the Hospital Company (Liverpool), which engaged Carillion on behalf of the Royal Liverpool & Broadgreen University Hospitals NHS Trust, wants existing subcontractors and former Carillion construction staff to complete the project, but many subcontractors, owed large sums by Carillion, face bankruptcy.

The Royal Liverpool is not alone. Across Britain and in other countries small subcontracting companies left dangling on a credit string by Carillion have seen the string cut.

Over 800 workers involved in Carillion’s public and private contracts were told within days of the conglomerate’s liquidation that they were out of a job.

They will be looking for work in a construction industry shaken by Carillion’s collapse and nervous of knock-on developments.

For all that the government boasts of job creation in Britain, most are low-paid, temporary, part-time, insecure — or all four.

Recent announcements of redundancies or site closures have hit household names such as Morrisons, Marks and Spencer, Tesco, Sainsbury’s, B&Q, Vauxhall, Coca-Cola, Colman’s Mustard and Kimberly-Clark.

All these successful companies are concerned solely with boosting profitability still further and are content to treat the workers they cast aside as numbers on a balance sheet.

The government insists that it “appreciates” the problems faced by sacked Carillion workers and the small companies left adrift by a mogul that made its creditors wait an inordinate time to settle its debts and has now ratted on them.

Carillion issued three profits warnings last year, carrying £900m in debt and short-changing its staff pension scheme by £587m, but its auditors KPMG — one of the go-to global accountancy giants favoured by governments — failed to flag up a danger of liquidation.

Hasn’t this company also got questions to answer over culpability for this financial, industrial and social disaster?

Throughout this charade, those appointed to run the company enjoyed large salaries and paid themselves huge bonuses while pushing up unjustifiable dividend payments to shareholders.

Former chief executive Richard Howson, who accepted bonuses of £293,000 in 2015 and £245,000 in 2016, maintains that the company was “run well in my opinion” and calls his bonuses justified “for the attributes that I earned it for.”

If that means anything, it is that the bonus scheme was fashioned in such a way as to guarantee rewards for its beneficiaries.

It is impossible to disagree with Frank Field’s conclusion, “Pensions are taking cuts, large numbers of people aren't going to get paid, other people have lost their jobs, and you are still all right, all of you, aren't you?”

Today, it’s Carillion, but such situations repeat themselves regularly. The days of state toleration of these scandals must end.

 

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