Can we talk about Carillion

Discussion in 'UK politics, current affairs and news' started by gawkrodger, Jan 13, 2018.

  1. alex_

    alex_ Well-Known Member

    I assume if you send it through with “cheapest” written on it you are done but if you want to justify it on value for money terms you need to write war and peace - so lazyness wins.

  2. mwgdrwg

    mwgdrwg Be a Pisces. Jam.

    Quite amusing that Labour are attacking the Tories for drip-feeding contracts to a failing company when they've been doing exactly the same thing in Wales.
    SpackleFrog, muscovyduck and sealion like this.
  3. ViolentPanda

    ViolentPanda Hardly getting over it.

    I suspect that it does boil down to exactly that. :( My local authority used to have lawyers in its' contracts and procurement depts. Not any more. Not for the last 15 years or so.
    SpookyFrank likes this.
  4. kebabking

    kebabking Unfettered ambition

    unfortunately, you try being the LGO, Civil Servant or military Officer who reccommends and then pushes for any bid that isn't either the cheapest, or second cheapest by a marginal percentage. no one who has the lamentable job of advising the budget holder on contracts in the public sector is under any illusion that, regardless of what is said about value vs cost, the objective is 'the cheapest quote - end of story'.
  5. alex_

    alex_ Well-Known Member

    It’s not a totally crazy thing to do and ultimately the alternatives are worse and hardly quick.

    “don’t give any contracts to Carillion” would finish them instantly and the shareholders would have sued the government and the government would have been dealing with that for 10 years.

    “Outsourcers must have capital and cash flow adequacy of X” would push up the cost of outsourcing would require new legislation and end up in court.

    Letting them take new business and hope they turned it around was probably the least worst option once the government found themselves in this position.

  6. SpookyFrank

    SpookyFrank We kill the flame

    They were obliged to pay into their employee's pensions, and didn't. Those employees have done their work in good faith, and yet a key part of their remuneration for that work has apparently vanished, spent elsewhere to prop up a doomed company and preserve a handful of lucrative directorships. What would you call that, if not theft?
    SpackleFrog, NoXion, marty21 and 9 others like this.
  7. SpookyFrank

    SpookyFrank We kill the flame

    If there is no legislation allowing the government to refrain from awarding contracts to failing companies then that is something that needs to be rectified, otherwise stuff like this will keep happening.

    The government temporarily stopped any new G4S contracts at one point IIRC, on grounds of incompetence. Although I think in reality a lot of contracts were agreed on during that hiatus and then rubber-stamped 4.5 seconds after it became OK to give them work again :rolleyes:
  8. existentialist

    existentialist Apprentice bachelor

    And - critically - the employees have no recourse.

    It's all very well operating your economy according to "law of the jungle" principles - well, actually its not, it's shit - but what makes me want to vomit is the constant government/neolib narrative that it's not really like that, and actually they care deeply. It's a complete hollow sham. You've got workers being screwed out of their pensions, SME suppliers to Carillion locked into rebate schemes whereby they can be stiffed for their invoices while the receivers will undoubtedly be coming after then for payment on "rebate" invoices, and the entirety of our ruling elite isn't saying "God, this is shit and rotten to the core". I think it's about time a few directorial Mercs started getting torched.
    Plumdaff, SaskiaJayne, teqniq and 5 others like this.
  9. Smokeandsteam

    Smokeandsteam Well-Known Member

    This is an important point. Carillion would no doubt have liked to push up the cost of outsourcing, would have liked to have built big margins into its contracts and would like to have built capital reserves. Had they done that however goverment (including the last labour government) would have awarded them precisely nothing by way of contracts.

    The model of government outsourcing demands the model operated by Carillion. It promotes risk and incoherent debt/ponzi financing approaches and it accelerates a race to the bottom in terms of pensions, pay and terms and condtions.

    The fat cats of Carillion are responsible definitely - but Government contracting has some serious questions to answer because all of Carillion's 'competitors' are on the same journey as a result of the model. An independent enquiry is essential for exactly this reason and I am glad labour is demanding it.
    teqniq, Almor, DotCommunist and 2 others like this.
  10. GarveyLives

    GarveyLives Well-Known Member

    My apologies – can you, or anyone else, clarify the source for the claim that Carillion was not making payments into its various pension schemes?

    Where does this information come from?

    And how is it that we have not heard this before (from the pension trustees, employees, union representatives and so on)?
  11. GarveyLives

    GarveyLives Well-Known Member

  12. existentialist

    existentialist Apprentice bachelor

    As far as I understand it, the £500m-odd pension deficit is a matter of record, and not in dispute. Maybe it would be helpful if you were to identify the point you're trying to make in pursuing this line of questioning?
    A380 likes this.
  13. SpookyFrank

    SpookyFrank We kill the flame

    It's been widely reported. I've not seen an article about Carillion that hasn't mentioned the pension deficit.

    Fears over pensions deficit as Carillion teeters on the brink
    crossthebreeze likes this.
  14. RainbowTown

    RainbowTown Well-Known Member

    And once more the ordinary worker is shat upon from a large height.

    And, of course, the consequences for those maggots who've caused this disgrace? Absolute zilch. A big fat nothing.

    As always.
  15. DownwardDog

    DownwardDog Riding a Brompton with a power meter.

    So what's stopping you?
  16. binka

    binka !!!!!!!!!

  17. existentialist

    existentialist Apprentice bachelor

    I play to my strengths. One of which is posting metaphors on Internet forums.
    spirals, A380, Nylock and 5 others like this.
  18. DotCommunist

    DotCommunist slowtime

  19. DownwardDog

    DownwardDog Riding a Brompton with a power meter.

    That fucking apostrophe.
    A380, LynnDoyleCooper, Poot and 15 others like this.
  20. squirrelp

    squirrelp Banned Banned

    Well someone has to pick up the tab for the losses when a company fails. With limited liability, it's your creditors - the people your company owed money to. If unsecured, they are left with whatever scraps are left after the secured creditors and HMRC take their chunk. Without limited liability, I think one would be able to hold the directors of the company personally responsible. So they'd be underwriting the business.

    The benefit of not being liable as a director is obvious - the flipside is that if you run a business and it does disastrously wrong, you are bankrupt - but I think overall this is an arrangement which benefits big business far more than little guys.
    agricola and SpookyFrank like this.
  21. cupid_stunt

    cupid_stunt Dyslexic King Cnut ... the Great.

    Talking about profit margins, I've just been talking to one of my clients who has been asked to quote on putting in 97 bathrooms & kitchens by a big developer, but they expected him to work on a 7% margin, which is too tight if something goes tits-up, so he basically told them to do one.
  22. cupid_stunt

    cupid_stunt Dyslexic King Cnut ... the Great.

    They need locking-up for that. :mad:
    A380, Puddy_Tat, fishfinger and 5 others like this.
  23. SpookyFrank

    SpookyFrank We kill the flame

    The directors won't be personally bankrupt though will they? I don't think they're even barred from holding other directorships in the future.

    And it's well established that executive level pay bears little or no relation to success or failure. A director on a seven figure salary will often turn out to be about as good at making sensible business decisions as a monkey rolling dice.
    cupid_stunt likes this.
  24. agricola

    agricola a genuine importer of owls

    The big issue with directors (and board members generally) is that there still isn't an effective "honest services" offence in British law (which would among other things make it a criminal offence for directors / managers to do things that put the entity they are in charge of at unjustifiable risk for gain to themselves or others); if there was then the threat of it would prevent a lot of this daftness.
  25. Sue

    Sue Well-Known Member

    That it's the fund managers and shareholders we should be feeling sorry for rather than the people working for Carillion who've lost their jobs/aren't getting paid..? :confused::rolleyes:
  26. cupid_stunt

    cupid_stunt Dyslexic King Cnut ... the Great.

    The point being fun managers handle pension schemes, so some people's pension funds are taking a hit too.
  27. marty21

    marty21 One on one? You're crazy.

    They ran libraries under contract using a not for profit arm called Community Cultural Solutions :facepalm:
    Pickman's model likes this.
  28. cupid_stunt

    cupid_stunt Dyslexic King Cnut ... the Great.

    A not for profit arm that no doubts pays over the top for backroom functions from the group, it can be easy to make a profit within the group, whilst showing a particular division doesn't make any profits.
    existentialist and SpookyFrank like this.
  29. marty21

    marty21 One on one? You're crazy.

    The various councils have to pay an early contract cancellation fee of several hundred thousand quid . Are they still liable for that if the company is bankrupt?
    Pickman's model likes this.
  30. squirrelp

    squirrelp Banned Banned

    That's absolutely the case with the system we currently have. Although there are complex rules to govern the conduct of a director during insolvency / bankruptcy, in practice, the system is absolutely set up to protect directors and there is plenty of scope for a director to run strings of companies that go bust. For a director to be barred they really have to do something massively fraudulent or exceptionally stupid. Letting one company go bust, and then starting another the next day doing exactly the same work - a 'phoenix' company - happens all the time. Holding a director personally liable for their company's debt is pretty much impossible.

    I know more about this than I care to

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