Shropshire Star comment: Carillion - Have we learned?

A series of investigations have attempted to get to the bottom of how and why the construction giant failed in such catastrophic circumstances.

A large slice of the responsibility must undoubtedly be taken by senior managers, who were happy to rake in their salaries while, behind the scenes, everything was falling apart around them.

The role of company auditors has also been heavily criticised, after it became apparent that multiple warning signs of imminent disaster were ignored.

Central government, which continued to hand out major, multi-million pound contracts to the firm, has been forced to consider the consequences of such a one-eyed approach to business.

Carillion’s collapse hurt the thousands of staff who were laid off. It also took millions out of the public purse – it was the taxpayer who footed the bill for the mountain of redundancy payments – and left a tragic legacy in the shape of part-finished and botched projects.

In the West Midlands this can be seen with the fiasco of the Midland Metropolitan Hospital, which is delayed by years and will cost at least £125 million over its budget.

Carillion’s liquidation is, in the main, a story of greed and the complete failure of the very systems that had been put in place to stop such a disastrous outcome. It also exposed in dramatic fashion the folly of using contractors to drive down the cost of providing public services.

Yet unfortunately, exactly the same type of behaviour is still going on today.

Huge firms are still landing major contracts. Then a few months down the line the original budget and completion date are scrapped, with the excuse of “escalating costs” usually given.

Projects drag on, all at the taxpayers’ expense.

The Government’s system of awarding contracts is still deeply flawed, and it is still impossible to have complete faith in the auditing processes that are in place.

The good news is that MPs will soon be laying a ‘Carillion law’ before the Commons, paving the way for genuine change in regulation.

We can only hope that the legislation does not get lost amid Parliament’s continuing Brexit debacle.