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Carillion collapse sparks 'concerns' over business roles in public services; Report by Public Accounts Committee raises questions over Government handling of Carillion contracts.

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Byline: Graeme Whitfield

The collapse of Carillion has raised "significant concerns" about the Government's relationship with large companies and the potential impact on the delivery of important public services, an MPs' report says.

The Public Accounts Committee has published Government risk assessments of its suppliers, taking into account stock market performance and financial statements.

Carillion had been rated a risk rating of amber for months owing to performance on contracts with theMinistry of Defenceand Ministry of Justice, but it was not until after the company issued a profit warning in July 2017 that the Government downgraded it to red, said the committee.

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"It appears the Government was not aware ofCarillion's financial distress until this point," said the report.

"In November 2017, officials recommended a provisional black rating for Carillion. However, following representations from the company, the Cabinet Office did not confirm the designation. Carillion collapsed less than two months later."

Meg Hillier, who chairs the committee, said secrecy surrounded large Government contracts to deliver public projects and services.

"The strategic supplier risk assessments provide an insight into the relationship between Government and suppliers and give rise to many questions we want to pursue.

"We recognise there are commercial sensitivities around that relationship. We are also alert to the potential impact on jobs and small businesses should certain information be made public.

"We have been mindful of the workers and businesses who could lose out through no fault of their own if certain information is in the public domain.

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"But equally we are concerned about the lack of transparency and its potential to create an environment where poor practice takes root.

"Taxpayers deserve to know where their money is going, that their investment is being managed wisely...

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