Lidington claims rules stopped govt taking #Carillion finances into account

Tory Cabinet Office minister David Lidington has tried to excuse the government’s failure to stop awarding huge contracts to collapsing company Carillion by claiming that tendering rules prevented Carillion’s dire financial circumstances into account.

Lidington said the government kept giving contracts to Carillion because of

rules on the type of information that you can take into account when taking those decisions.

Journalist Paul Mason spotted Lidington’s excuse and was quick to point out that this is a symptom of what the left has been pointing out for a long time:


Labour front-bencher Clive Lewis drew attention to the inevitable human cost, as well as to the significance of Carillion’s collapse to the political and economic landscape:

cl caril

The impact of the collapse will reverberate through every part of our economy. As well as construction, Carillion also managed many projects in the NHS, education and other vital parts of the fabric of our society – and its failure to pay its suppliers will cost jobs in other companies and sectors.


A private company running public projects collapses – not long after paying its executives huge bonuses – with massive human and economic cost and the tax-payer carries the cost. Again.

Could anything more clearly portray the madness of letting private companies into public projects to take out profits that could be paying for wages and services?

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  1. As always happens, the directors will have made sure they have salted away a cosy little sum for themselves, before revealing the facts about the company’s balance sheet.

  2. A Carillion boast was that the dividends paid out to share holders increased every year …. so profits didn’t go to increase the pension funds or workers pay packets …. and now workforce, past and present, face redundancies and smaller pensions.

  3. “Lidington claims rules stopped govt taking #Carillion finances into account”

    Which just goes to show how incompetent and inept this government is. If the rules aren’t fit for purpose then why didn’t they change them. Isn’t that what they get paid for?

    1. Snap exactly my reasoning below the Govt is the ultimate power with the ability to change rules, legislation and policy, that excuse was a cop out

  4. If that is so, the non-exec director’s include Blair’s political secretary Sally Morgan (now Baroness Morgan) who took the post July 2017 just as the first profit warnings came out.

    Also a hapless former Euro Disney employee(!!) Justin Read who became a non-executive director of Carillion last month! He was a group finance director 2011 to 2016 (at another company) so should have understood the financial tea leaves all too well.

    It seems as if Carillion did not want tough and competent corporate governance from the non-exec directors who should have been overseeing the executive directors. Or maybe the non-exec directors who did see what was coming bailed out before the fire-storm, so some less aware replacements had to be found quickly.

  5. “Tory Cabinet Office minister David Lidington has tried to excuse the government’s failure to stop awarding huge contracts to collapsing company Carillion by claiming that tendering rules prevented Carillion’s dire financial circumstances into account.”

    Absolute Baloney they are the Govt who define the rules, legislation and policy if that was in the way why did they not change it

    They could even pass statutory instrument to do so after all they have used that enough on welfare reform.

  6. Absolute rubbish and just covering up their backhand dealings throughout the system.
    I recall some years ago when we used to have the \PSA- should never of been scrapped but through a rogue deal between Thatcher and Heseltine when the outcome was the companies owned by Heseltine and one where Dennis Thatcher was on the Board won the initial (so called ) experimental stage to run dozens of Govt Contracts which grew in size.
    But back to PSA which looked after all Govt depts and at one time many private businesses.
    I worked for a fairly large company which was 1 of 5 approved in that category of work. When work was required the PSA would appoint a suitably qualified and vetted company to act as Main Contractor. As we were MOB ( method of build priced cost schedules) we or another would be nominated to complete certain works in that project. No tenders for us or the other 4 as we had a 3yr priced contract with indices
    .Now perhaps a Contract to us was about £20k and the overall project was £250k value.
    Obviously the approved contractor had to be on the Govt select list to carry out works up to £250k value. They could not accept that it was incorrect for them to issue , say , 12 projects of £250k at a time – thus having £3million or work at a time which grossly exceeded their own vetting limit.
    The govt just assumed that all the Contractors would stand all the risk and the Govt stand none even when in fact they were not maintaining due diligence on the Main Contractor and abused their own rules at the expense of the nominated SubContractors.
    You watch that there will be nobody jailed for corrupt practices and it should be remembered that it is a jail-able offence if a Director continues to trade knowing it is insolvent. Something tells me that possibly dozens knew it was insolvent. If anybody goes to jail it will be some heavily paid fall guy. You all watch in 18months time.

  7. Did you mean Paul Mason, not Paul Lewis? (the pictured tweet is the former).

    (Many thanks for the blog by the way – long time lurker)

  8. Lidington stated today that Government was prevented by ‘rules’ from taking a company’s financial viability into account when considering tenders for contracts.

    I want to know if that’s a ridiculous UK law – or a ridiculous EU law?

    The answer might change my view of Brexit.

  9. ‘Too big to fail’ … until they ‘fail’. Then what? How does a multi-billion pound company have no assets? Raiding pension funds, late payment of small business suppliers, taking on contracts they knew full well they couldn’t honour – fraud, surely!

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