On 15 January 2018, Carillion declared insolvency. At that time, it employed over 18,000 people in the UK.
Over the intervening months Parliament has scrutinised the circumstances that led to its collapse in a number of ways. This Committee, jointly with the Public Administration and Constitutional Affairs Committee, took evidence from former Carillion directors. The Liaison Committee took evidence from the Minister for the Cabinet Office. The Business, Energy and Industrial Strategy published a comprehensive report jointly with the Work and Pensions Committee. Finally, this Committee published a report detailing the Government’s own risk assessments of Carillion during the period before its collapse.
A new investigation by the National Audit Office estimated that the collapse of Carillion has cost the taxpayer an estimated £148 million. Carillion’s July 2017 profit warning came as a surprise to the Cabinet Office but Government continued to award it £1.9 billion of contracts.
The investigation found that Cabinet Office continued to fund Carillion staff to deliver public services to ensure no gap in provision, with partner suppliers taking over Carillion’s share of large construction projects. The Cabinet Office had begun to prepare contingency plans ahead of the company’s collapse.
Carillion was a Strategic Supplier to Government, meaning it had contracts with central government worth over £100 million a year. There are currently 28 such suppliers, and this Committee is inquiring into Government’s relationship with them and how working through large suppliers delivers value for money to the taxpayer.
The Committee may use this evidence session to address both the Government’s response to, and preparedness for, the collapse of Carillion, and Government’s wider relationships with suppliers and whether they support or hinder its ability to get value for money for public services.