Carillion

Ronnie Cowan Excerpts

Thursday 24th May 2018 Commons Chamber

[Meg Hillier]

I would say to my hon. Friend that a piece of the jigsaw is missing. The papers released to the Public Accounts Committee only went so far, and the evidence we were given does not indicate when the Government made a decision about what to do with the recommendation in the risk assessment papers. I cannot provide any more evidence for why the Government chose not to implement the “black” rating at that stage, but I assure my hon. Friend that we are widening our inquiry and have access to the other papers. Sadly, and rather depressingly, the Committee has a large back catalogue, and we have highlighted a number of issues to do with contract management in government. We will not leave a stone unturned in our inquiry, and as I said to the hon. Member for Kettering (Mr Hollobone), we hope to publish a report by the summer recess.

[Ronnie Cowan (Inverclyde) (SNP)]

I welcome this comprehensive report. When Carillion collapsed, a number of Select Committees scrambled to take evidence, including the Public Administration and Constitutional Affairs Committee and the Transport Committee. One thing that really struck me was that after the first credit warning, the UK Government continued to grant contracts of £2 billion to Carillion. The Scottish Government started mitigating that, and offsetting the damage right there and then, but after the second and third warnings, there were more contracts. Does the hon. Lady agree that the Government adopted the attitude that Carillion was too big to fail? They played fast and loose with taxpayers’ money and offered more contracts to paper over the cracks when there was clearly a cash-flow problem in the first place.

[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.