Britain’s government is under pressure from opposition parties to explain why ministers awarded construction company Carillion £1.3 billion of new contracts after it was known to be in financial difficulty.
Carillion collapsed on Monday in one of Britain’s biggest corporate failures, throwing hundreds of large projects into doubt and forcing the government to step in to guarantee vital public services.
Britain’s opposition Labour and Liberal Democrat parties called for an investigation into the government’s dealings with Carillion before the company collapsed.
Tussell, which runs a database of government contracts in Britain, estimates that Carillion was awarded government contracts worth £1.3 billion after the company issued its first profit warning in July.
Carillion’s collapse heaps more pressure on PM May
Jon Trickett, Labour’s Cabinet Office spokesman, questioned why the government awarded three contracts to the group last year despite it being government policy to designate a company as “high risk” if it had issued a profit warning.
“Why was it apparent to everyone except the government that Carillion was in trouble?” Trickett said in a debate in Parliament.
The leader of the Liberal Democrats, Vince Cable, called for a public inquiry to examine what he described as “very questionable decisions made in the past few months”.
Labour Party leader Jeremy Corbyn said that such work should never have been given to the private sector in the first place.
He described the collapse of Carillion as a “watershed moment” and said it was time to “end the rip-off privatisation policies that have done serious damage to our public services and fleeced the public of billions of pounds”.
Carillion’s collapse heaps more pressure on Prime Minister Theresa May’s shoulders as she grapples with the tortuous negotiations on Britain’s exit from the European Union and a deeply divided Conservative Party.
One of many private companies to run public services in Britain, Carillion had been fighting to survive after contract delays and a downturn in new business prompted profit warnings.