CBI comments on Carillion

Carolyn Fairbairn, CBI Director-General, said:

“The news of Carillion’s liquidation is shocking and the immediate priority must be its staff, customers and suppliers.  Carillion and its stakeholders must work together with the government taskforce to support workers and ensure continuity for customers and public agencies across the country who rely on their services. It’s encouraging to see many private sector clients providing immediate security to those affected while a long-term solution is found.

“At the same time, careful consideration must be given to the causes of the collapse and the lessons to be learnt. Carillion’s business practices are rightly under scrutiny, particularly on payment terms – this remains a serious issue across too many supply chains, and larger firms are uniquely placed to make a difference.

But the drivers of the firm’s demise run deeper, and fundamental questions about the value and health of public contracting must be addressed. Business investment and innovation can be transformational for critical public services and infrastructure. For every project that makes headlines for the wrong reasons, there are many more that are not in the news and delivering value for taxpayers.

“The liquidation of Carillion is a reminder that such success is not automatic, and requires expert partners focusing together on long-term value, rather than short-term costs and the transfer of risk.

“To rebuild confidence with the public and the many thousands of companies that work with the public sector, the Government should undertake a strategic review of the overall health and sustainability of public contracting. The CBI has offered our support with this process.”