The worker asks for the answer to the “high risk” Carillion contract

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Labor has called for the government to explain why it awarded Carillion nearly  2 billion in contracts even after the company was in financial trouble.

In July, the Construction and Outsourcing Group released the first of three warnings about its financial health, with one update, its share price tumbling, forcing its chief executive to step down.
Jon Trickett, Shadow Cabinet’s chief of staff, said regulations have shown that Carillion could have been designated “high risk” and called on the government to explain what steps it has taken to check whether the company is prepared for more taxpayers Funding work.

Trickett said: “Carillion’s financial position has been ringing more than six months, so the government must come forward to answer the question, to be exact, before giving Carillion billions of taxpayers money to the contract, what exactly Due diligence measures.

Carillion released its first earnings warning on July 10, issuing a statement announcing a 39% decline in its stock price and triggering the resignation of its chief executive, Richard Howson.
A week later, Carillion won a £ 1.4bn HS2 high-speed rail contract with its rival Kier and the French civil engineer Eiffage.

The day after Carillion won a Department of Defense £ 158 million contract on July 18 to provide “Food, Retail and Leisure, and Hotels and Services” at 233 military facilities.

The second profit warning in September was that after five weeks, Network Rail awarded a contract to supply the London-Kobit railway line. A week later, the company issued a third profit alert and was awarded a  12 million school building contract three days later.
Keith Cochrane, interim chief executive, said the award shows: “Despite the Group’s ongoing challenges, we remain confident of important customers.”

If a government provider is in financial distress (including issuing a profit warning), the cabinet office may consider the company a high risk. At this stage, according to government documents, a “crown representative” should be appointed to work with the company to improve its performance.

The government’s policy also stipulates that officials “should, to the extent possible, reduce the scope for strategic suppliers to carry out additional work under existing contractual terms in order to incorporate risk into taxpayers.”

Cabinet office records show that as of September 2017, no crown representative was named after Cari llion first warned of profit for two months.

Trickett will ask the government to explain how due diligence should be conducted after Cari llion issued its first profit warning and which sectors are involved in making decisions despite financial problems.
Labor called for the government to prepare public contracts awarded to Carillion to ensure workers are not unemployed and public sector projects involving Carillion, such as Midland Metropolitan Hospital and Royal Liverpool Hospital, are not interrupted.

Trickett said: “At the same time, pensioners and taxpayers want financial protection in the event of further financial difficulties for Carillion employees due to an emergency meeting between Carillion employees.

“The Labor Party demands that the government be prepared to intervene at any time to bring these important public sector contracts back in. The government can not outsource responsibilities and caring responsibilities to these workers and to key public sector projects.”

The workforce is also expected to highlight the link between the government and Carrie Green, prime minister adviser on corporate responsibility. In 2015, he signed an open letter advising people to vote for the Conservatives.
Walthamstow MP Stella Creasy wants to file the case with the Treasury on Monday in the House of Commons.

She expressed particular concern about the company’s contract to establish a hospital in Liverpool and Smetvik.

The Cabinet Office has been coordinating potential corporate crash contingency plans, and Crecy insists that the Treasury Department should not shirk its responsibilities.

“Carillion is one of the few companies that has contracted with the public to sign private-finance contracts for major infrastructure projects.” The Treasury Department had previously thought that the use of these contracts was a more expensive construction and maintenance infrastructure than public sector borrowing The form of cost is a way to transfer the risk generated by major projects to the private sector.

As a result, Carillion’s problems have also raised concerns about the financial stability of other contractors and whether the public sector will be at risk. “

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