Expert View

Is Brexit to blame for Carillion?

by Denis MacShane | 16.01.2018

Denis MacShane is a former Minister of Europe and was a Labour MP for 18 years.

Carillion is one of the worst disasters to hit British business in years. Unlike bank collapses, this involves hundreds of sub-contracting firms who have hired workers from Carillion who could now face bankruptcy and winter redundancy.

It is clear that government taken as a whole – the Treasury, Transport, Education and Justice departments – failed to exercise sufficient supervision over the firm and its myriad operations. Right across national and local government, officials were awarding contracts to Carillion and its sub-contractors until just  a few days ago.

But ministers and their senior officials are now diverting so many resources to Brexit that they have no time or civil servants to oversee other key areas of government activity.

Two new ministries have had to be set up – the Department for Exiting the EU (Dexeu) and the International Trade Department (DIT). Hundreds of civil servants have been transferred from other departments to these two Brexit departments, set up to allow ultra-eurosceptics like David Davis and Liam Fox to be brought back from the political graveyard which previous Tory leaders had sensibly left, them given their record of poor judgement, laziness and eccentricity.

Dexeu has been so useless that the chief Brexit civil servant, Olly Robbins, a Whitehall high flyer, has transferred back to the Cabinet Office and now reports directly to the cabinet secretary, Jeremy Heywood, and the prime minister.

Davis – who is 70 this year, close to the average age of Tory members which is 71 – is now merely decorative. His blustering bonhomie and ad hominem attacks on Michel Barnier have made zero impression on the EU27 and the team in Brussels responsible for negotiating Brexit.

The Treasury, which normally exercises the tightest control on all aspects of government spending and does due diligence on firms awarded public contracts, has had to devote immense resources to Brexit, preparing hundreds of papers and holding endless meetings with the City and service industry firms which will be hit the hardest if the UK leaves the single market and customs union.

Top rank British civil servants are hard-working and often very clever. But Brexit has caused so much disruption that normal work, like supervising firms such as Carillion, has had to be put on hold to focus on Brexit. The quality of work has not been impressive as the publication of the so-called “impact assessment” reports, which were empty of substance, showed.

But even a report full of pointless verbiage still takes time to produce, and other government work has to be left undone. Brexit is like a parasite sucking the life juices out of government. There are many causes for the Carillion disaster but the way Brexit has taken over normal government work did not help.

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    Edited by Luke Lythgoe

    2 Responses to “Is Brexit to blame for Carillion?”

    • As a member of the general public, I have no knowledge of where the problems lie with Carillion. Nevertheless, having had experience of a few contractors which had secured long-term Government contracts, I have the following observations of one of these contractors:

      1. Their management teams appeared to be made up of ‘salesmen’ (in the loose sense of the word) not properly trained or experienced to operate businesses;
      2. Many were ex-military and were also freemasons;
      3. Many didn’t have any or even suitable construction / engineering / management qualifications;
      4. Nepotism was rife;
      5. They had no scruples about how they treated their workforce.

      The experience was shocking. Therefore, if the government organisations are not setting the highest standards when writing their contracts (PPP / PFI etc) for the board of director management profiles required to run their contracts, then it (the government) has contributed to the adverse operational and financial instability of any errant company.

      If there is a requirement for a public enquiry here, I would focus any investigation upon establishing the skill sets of individuals in the organisation.

      It is worth noting that common practice in construction in many European countries these days, including the UK, is to use staff from central / eastern European countries. If the threat of Brexit is frightening off these construction workers, there may be cause for concern that staff shortages are adversely affecting project programme delivery, therefore leading to rising costs.