Government ministers, local councils and liquidators are scrambling to keep UK public services operating after Carillion collapsed this morning
- Latest: Taxpayers likely to suffer
- Small firms fear bills won’t be paid
- Government promises to keep paying Carillion staff
- Pensions could be cut
- Calls for public inquiry
- BREAKING: Carillion has collapsed
As chancellor of the exchequer between 2010 and 2016, George Osborne had a tight grip on the nation’s purse strings.
Now, in his new role as editor of the Evening Standard, Osborne blames the civil service for handing too many contracts to big firms like Carillion.
The failure to use a variety of smaller, mid-size companies undermines innovation and leaves services hostage when things go wrong.
Why was Carillion awarded huge contracts by the civil service, with whom rather than ministers almost all procurement decisions lie after they knew it was struggling last year?
Peter Kitson, Partner at law firm Russell-Cooke, says Carillion may have caused its own demise by pitching its services at an uncompetitively low rate – to win business.
”The procurement rules (the Public Contracts Regulations) which govern public sector procurement are central to understanding what has happened here. Almost all Carillion contracts have been competitively tendered under those procurement rules.
The rules require public sector clients to investigate and possibly to exclude any tenderer whose bid is ‘abnormally low’. One contributory factor here may be that Carillion has tendered at very low margins, possibly unsustainably low, in order to win these huge volumes of work.