Carillion

Lord Spellar Excerpts

Thursday 24th May 2018 Commons Chamber

[Meg Hillier]

The hon. Gentleman hits an important nail on the head. The problem with large companies dealing with large contracts is that cash flow can be a problem, and it is tempting for the Government to step in to deal with that. This is a real issue because if a Government contract is failing, it is still difficult for the Government not to award other contracts because of contract law, and we think that that area needs to be looked into. In any other situation, it would be crazy to give a contract to a supplier that was clearly failing. Given the size of these contracts, few organisations are bidding, and that means that some organisations are running huge swathes of government and have effectively become proxy Departments, even though they are in the private sector, which means that the Public Accounts Committee and other Select Committees do not have the same oversight of them. The National Audit Office can look at a contract, but not at how the company is running. There are real issues here, and we want greater transparency in these contracts. We will be looking closely at the issues raised by the hon. Gentleman in our inquiry.

[John Spellar (Warley) (Lab)]

I congratulate my hon. Friend on an excellent report. Does it not demonstrate a clear systemic failure and an unwillingness to confront bad practice, all of which led to significantly greater long-term cost? Such failure is still continuing in government. More than four months after the collapse of Carillion, work has still not restarted on the Midland Metropolitan Hospital, and I understand there are similar problems at Liverpool. Two thirds of the money for my hospital has already been spent. Security and other costs are rising on a daily basis, and the building will be deteriorating. I have raised this issue endlessly with Ministers, and with the Prime Minister twice in this Chamber, so will the Committee look at the failure of decision making in government and what is, basically, paralysis by process?

[Meg Hillier]

My right hon. Friend, as ever, raises his point in a very effective way. This is one of our concerns about the size of these contracts. If the collapse of a large supplier means that a hospital in our one of our constituencies is not completed, we see that the system is skewed to try to ensure that does not happen, but that means that the interests of the supplier can come first, in that they might end up being bailed out. Carillion was deluded in believing that it would be given a bail-out, and we want to examine why it kept believing, right up to the moment of collapse, that a loan would come.