Express & Star comment: Carillion crisis raises serious questions
Whatever the final fate of Carillion, the crisis at this Wolverhampton business raises many serious questions.
Not the least of these is how? How does a £5 billion turnover business plugged into a string of major government, road and rail contracts reach such a parlous state?
Less than a year ago it was seemingly in bullish form, predicting strong results ahead. Just four months later it was revealing huge losses on major building contracts.
This weekend it was in crisis as senior Government and financial figures worked feverishly to try and stave off disaster.
This is a company, based in the Black Country, that over nearly two decades has secured contracts around the world and won praise for its work in the community and for its forward-thinking business practises.
It is not the victim of some worldwide economic crisis. Something at Carillion has gone badly wrong. Now thousands of its employees and hundreds of thousands more who rely on the services it provides are in limbo.
But there are wider questions.
Carillion is now under investigation by the Financial Conduct Authority over the content of its various statements to the City, and to its shareholders and investors, in the run-up to that July profits warning. Because none of them gave any indication of the financial problems at the company.
By September its losses had passed the £1bn mark. Was this really the surprise it appeared, or were there warning signs that were missed?
And then there is the role of Transport Secretary Chris Grayling, who saw fit to award Carillion part of the contract to build HS2 just a week after the company had issued the first of three profits warnings and its chief executive had stepped down.
Is Mr Grayling and his departmental team really telling us that there was no-one more suitable to receive this vital contract?
The opposition parties are wading in to insist that taxpayers’ money should not be used to bail out Carillion. But it isn’t as simple as that.
This company carries out vital work for the Ministry of Defence, the Highways Agency, Network Rail, let alone hundreds of schools and the Prison Service. Replacing it will be expensive and complicated. And what about its work on hospitals, such as the Midland Metropolitan at Smethwick?
All these questions need answers; if not today, then in the coming days and weeks.