Black Country Chamber chief calls for action on Carillion report
The damning report on the failure of Wolverhampton-based Carillion raises critical concerns around corporate governance, the chief executive of the Black Country Chamber of Commerce has said.
Corin Crane said it was essential that the report was treated with the utmost seriousness and that the Government responds point by point as a matter of urgency.
He said there must be a genuine change in the corporate governance of big businesses like construction and support services giant Carillion and that those who were culpable for Carillion’s failings were held to account.
The select committees said Carillion’s board presided over a "rotten corporate culture” and was culpable for its “costly collapse”.
The report, published on Wednesday, also called for a potential break-up of the big four audit firms - Deloitte, EY, KPMG, and PwC - after they "waved through" the indebted construction company’s accounts, and attacked the Government for lacking "decisiveness and bravery" to tackle corporate regulation failures.
Mr Crane said: “We welcome this review and few local businesses will be surprised about the damning picture it paints of what was such an important company. It raises critical concerns around corporate governance, about the roles of the Financial Reporting Council and Pensions Regulator, and about the longstanding auditors of this business."
He said that since January, the chamber had been heavily involved, along with the West Midlands Combined Authority, Wolverhampton Council, Black Country Local Enterprise Partnership, Black Country Growth Hub and the Department of Work and Pensions in helping to manage the fallout of the Carillion liquidation through the implementation of an emergency taskforce.
"In particular, we have been operating a helpline to provide support and assistance to those who have been affected by the Carillion liquidation. From this, we have received incoming enquiries from a variety of businesses, many of whom were a part of Carillion’s supply chain and therefore directly affected by the company’s collapse.
“With this in mind, it is also important that public procurement processes are reviewed alongside corporate governance, as many small businesses who are dependent on supplying large individual contractors can be left exposed to financial hardship which then proves to be fatal to their company.”
Carillion collapsed at the end January with debts of up to £7 billion, including £2.6bn in pension liabilities. It employed 19,000 staff in the UK at the time of itsr demise, with around 400 of those jobs based in Wolverhampton. In addition, the company was at the head of an interconnected Black Country and West Midlands supply chain, which has been adversely affected since the construction giant went into liquidation.
GMB, the union for workers in the health and care sector, say that the new report from the Business, Energy and Industrial Strategy and Work and Pensions Committees confirms the warnings from it and others about Carillion.