Monday, 22 January 2018

Carillion Collapse Update

Carillion plc has often been described as "one of the biggest companies in the world that you've never heard of". Today everybody knows its name. The negotiations of the last few weeks have failed to come up with a rescue package and so Carillion is officially in liquidation. On the morning of January the 15th it issued an administration notice to the London stock exchange and all its asset holders have been notified. Two other companies in the construction sector, Balfour Beatty and Galliford Try, have been given extra cash contributions to complete the highway projects Carillion were carrying out. The costs so far are about thirty-five million pounds. I image the same deal will be organized for the support services it is involved in, such as the Facilities management at NHS hospitals. Carillion employees are still being paid. Yesterday I saw a Carillion van parked outside a student accommodation block under construction. I have heard from an informant inside JR Portering that their management are still on site until at least the 16th of February; after that, nobody knows. Obviously this situation cannot last. Probably there will be a bigger feeding frenzy as other contractors swoop down like vultures to feed off the Carillion carcass. This is not ideal. As I suggested, it would have been nice if the government had given smaller businesses a chance; but this is way better than a bailout. This affair is also going to throw the entire PFI ethos into question. Jeremy Corbyn asked Theresa May some searching questions about the whole business at Prime Minister's Question Time. He did not mention the fact that PFI is the brainchild of a Labour government, not the Tories. The government has established a "Carillion task force" which includes representatives of business, construction experts, trade unions, financial services and the state. We will have to wait until they've been through a tedious and lengthy process of umm-ing and ahh-ing before they eventually publish a coherent report. Source: The best analysis of the Carillion collapse has come from Ian R Crane who explains how people were lured into buying Carillion stock options that were not as lucrative as they pretended. In this way the entire operation was a bubble and it has now burst and left many people who trusted advisers with their investment totally penniless. See:


  1. Hi there, just to say you are wrong about PFI being a Labour brain child. It was actually announced in the first year of the John Major government in Norman Lamont's autumn budget statement in 1992. Yes Blair and Brown missed a golden opportunity to scrap it but instead let it get totally out of hand.
    Also Corbyn's Labour is an entirely different beast to the Blairite neoliberal centre party, but rather today's Labour Party sees a return to social democratic Scandinavian socioeconomics. I recently completed a masters dissertation in the future of European social democratic movements and prior to that I did my degree in Political Science.
    I think you need to check your facts in this.

  2. Hi Martin. Duly noted. However I disagree with your accountability in that the policy changes between the pre- 1997 era and post-1997 indicate otherwise. This was not a "missed opportunity" for the Blair government. It was train they regrettably missed while they were chaining themselves to the platform. They pursued the PFI agenda with true gusto and awarded contracts that would have been unthinkable beforehand. What you have just said is echoing what many Labour members posited as an excuse, inclusing Susannah Pressel the Lord Mayor of Oxford, when I spoke to her in 2006. I believe I HAVE checked my facts sufficiently. Regards. Ben

    1. Hi, erm I've looked into this and Martin is correct, he is spot on. I'm afraid your response makes you look like you have never done any academic research in your life. You can't keep citing your own work, that isn't how it works. Anyway good luck with your writing career maybe you can shine in that instead.


  3. Hi Clifford. As I've said, I disagree with Martin, ergo I disagree with you. I'm not in a position to comment on how my "academic research" looks to you. You alone are qualified thereof ;-) Thank you very much; hopefully my writing carer will shine. Ben