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Carillion

TheDecameron said:
Is there not some way we can blame the EU?
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Not quite Dec. As a member of the EU the UK is required to ensure that public sector procurement is carried out in accordance with the EU Public Procurement Directives and, pari passu, the WTO Government Procurement Agreement. While this doesn't guarantee contractors won't go bust, it goes a long way to ensuring open and fair competition for government contracts, and that governments can't just award them to their mates. The UK is reasonably compliant, with very few ECJ judgements against it.
 
Does make buying anything in the public sector a complete bollock ache though.
 
It's a shame for the thousands of employees facing an uncertain future who will suffer due to poor management of the company. Hopefully most of these jobs will transfer to new homes as the jobs still need to be done.

Questions need to asked around the awarding contracts to a company known for some time to be in known financial difficulty and the alleged renumeration of the board in the run up to the collapse. I'm alright jack...

Unfortunately the public sector is often not very good at contract management with external companies. In most cases the staff are not commercially experienced and lack the experience to manage these contracts. The public sector have also used these contracts as a way of cutting cost to the bone. Where many of these contracts are in the lower wage environment such as cleaning, caring, etc they are failing due to staff shortages and wage pressures on contracts and where the private operator makes 1-5% margin it has room to maneuver.
 
Philim said:
Unfortunately the public sector is often not very good at contract management with external companies. In most cases the staff are not commercially experienced and lack the experience to manage these contracts. The public sector have also used these contracts as a way of cutting cost to the bone. Where many of these contracts are in the lower wage environment such as cleaning, caring, etc they are failing due to staff shortages and wage pressures on contracts and where the private operator makes 1-5% margin it has room to maneuver.
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I've just started writing an exit plan as the current supplier is being thrown out. They were the only supplier on Gcloud so won the bid with a price that was double what it would cost in the private sector. They were completely unable to deliver the complex solution and now want to walk away, because the requirements were never stated and the deliverables in the contract were never made clear it is now an NDA based compromise agreement for the termination.
 
I've just started work on two contracts for two local authorities circa £10m whereby they signed up to contracts and the services aren't being delivered. The local authorities have had no financial review in the last 14 months with the supplier and the contracts have no performance requirements. An absolute mess but something I see regularly.

This is what makes me laugh about those that say "just nationalise it". Like brexit these things are never that simple.
 
Tony L said:
Emily Maitlis is currently demolishing some Tory idiot over this on Newsnight.
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Well,up to a point, but the interesting bit for me was the editor of Building Magazine who said that downward pressure on pricing by government had severely reduced profit margins on construction projects. Carrillions margin was down to 0.8% and the industry average was down to 2%, nether of which was sustainable in the long term. Clearly in Carrillions case it wasn't, as they went bust.
 
MikeMA said:
Not quite Dec. As a member of the EU the UK is required to ensure that public sector procurement is carried out in accordance with the EU Public Procurement Directives and, pari passu, the WTO Government Procurement Agreement. While this doesn't guarantee contractors won't go bust, it goes a long way to ensuring open and fair competition for government contracts, and that governments can't just award them to their mates. The UK is reasonably compliant, with very few ECJ judgements against it.
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Hang on, there could well be a De Minimus angle here. When I was at DTI, the companies used to moan like hell that other countries basically aided companies financially, unlawfully, and ignored the rules, whilst the UK government did things by the book. So indirectly the EU could be to blame here.
 
It has to be far cheaper for the gov to employ staff directly rather than to contract it out. Probably for every £10 pay an NHS cleaner gets, the contractor gets another £10. £20 an hour not £10 an hour to the NHS. Please do point out any flaw to this logic...
 
Arkless Electronics said:
It has to be far cheaper for the gov to employ staff directly rather than to contract it out. Probably for every £10 pay an NHS cleaner gets, the contractor gets another £10. £20 an hour not £10 an hour to the NHS. Please do point out any flaw to this logic...
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The argument goes that if the cleaner is contracted out, the tax-payer has no liability to pay their pension. Therefore the future burden on public finances is reduced by more than the initial cost.
 
I seriously cannot be arsed entering into debate over this.This is what I and many others have been going on about since Thatcher. Carillion and all the other parasitic 'companies','preferred bidders' etc., were nothing to do with delivering contracts. They only existed as a device to channel public money into private hands. It saddens me that previous 'Labour' administrations are not guiltless in this, but it is mainly a Tory project which has failed....
Or has it?
The only ones to pay will be taxpayers, subcontractors and their employees. Meanwhile the Tory shits will still try to claim the high ground' ( 'No bailouts for private companies!!')
The money tree will still exist for the friends of the Tories.

Makes me want to vomit.
 
Seeker_UK said:
The argument goes that if the cleaner is contracted out, the tax-payer has no liability to pay their pension. Therefore the future burden on public finances is reduced by more than the initial cost.
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And if that cost is borne by the contractor then they must factor that into the rate they charge the gov surely....
 
Philim said:
It's a shame for the thousands of employees facing an uncertain future who will suffer due to poor management of the company. Hopefully most of these jobs will transfer to new homes as the jobs still need to be done.

Questions need to asked around the awarding contracts to a company known for some time to be in known financial difficulty and the alleged renumeration of the board in the run up to the collapse. I'm alright jack...

Unfortunately the public sector is often not very good at contract management with external companies. In most cases the staff are not commercially experienced and lack the experience to manage these contracts. The public sector have also used these contracts as a way of cutting cost to the bone. Where many of these contracts are in the lower wage environment such as cleaning, caring, etc they are failing due to staff shortages and wage pressures on contracts and where the private operator makes 1-5% margin it has room to maneuver.
Click to expand...

MikeMA said:
Well,up to a point, but the interesting bit for me was the editor of Building Magazine who said that downward pressure on pricing by government had severely reduced profit margins on construction projects. Carrillions margin was down to 0.8% and the industry average was down to 2%, nether of which was sustainable in the long term. Clearly in Carrillions case it wasn't, as they went bust.
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I'm no economist, but this is bollocks.

Questions need to be asked about awarding contracts FULL STOP to private companies set up for the express purpose of milking the public purse.

Add in G4S, Crapita and all the rest of them.

The Public Sector is not a cash cow to be milked by spivs.. it is a genuine response to the needs of actual PEOPLE. Geddit?

I despair..
 
MikeMA said:
Not quite Dec. As a member of the EU the UK is required to ensure that public sector procurement is carried out in accordance with the EU Public Procurement Directives and, pari passu, the WTO Government Procurement Agreement. While this doesn't guarantee contractors won't go bust, it goes a long way to ensuring open and fair competition for government contracts, and that governments can't just award them to their mates. The UK is reasonably compliant, with very few ECJ judgements against it.
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Whatever the rules say.. this is simply beyond credibility. G4S, Crapita and all the rest have made well documented f*** ups on a regular basis, yet they still get contracts. Whereas, even the smallest cock up by cash strapped and over burdened local Govt, or similar entities get examined to death. This is all pure, politically driven stuff. It is not even really idealogically driven, it is Spiv driven. It follows that there is something seriously wrong with the contracting process/rules.

Mull
 
Arkless Electronics said:
And if that cost is borne by the contractor then they must factor that into the rate they charge the gov surely....
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The cost to a contractor for contribute to a private defined contributions pension scheme is less than the cost to the taxpayer for a public sector pension.

Well, that's the theory anyway.
 
Seeker_UK said:
The public sector can squander money just as well as the private sector. ;)
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Indeed it can.. though when properly regulated it rarely does. But whatever. Public sector squandering doesn't go exclusively to the already rich. Some of it even goes to the people who actually have the skills and deliver the services. Now that's novel!!

Since 2010 we have seen crises in all public services and all public service contracting by the 'Private Sector'. Are you not joining the dots yet?
 
Working for the DTI I never saw such massive wastage in any place I have ever worked. My missus works for an NHS Trust. Massive wastage there too. Sister-in-law works for the council. She is ashamed of the waste.

That's a fairly big chunk of the public sector. Which parts of the public sector are properly regulated and do not squander money, please?
 
How much wastage goes into sending public funds to private individuals' tax free overseas accounts?

Isn't the NHS one of the most efficient health services in the world according to the WHO?

Why do other nations' governments buy up our services if they are an apparent waste of public sector funding Rich?
 
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