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Chairman of bankrupt Carillion firm was a ‘Corporate Responsibility Advisor’ to Theresa May

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In news that emphasises the sheer scale of incompetence at the top of our government, it has been revealed that the Chairman of the now bankrupt government contractor Carillion, Philip Green (not that one), was an advisor to Theresa May on ‘corporate responsibility’. 

LBC pundit James O’Brien tweeted the extraordinarily ironic information today:

However, O’Brien quickly retweeted, updating his information to reflect that Philip Green appears to have only been Corporate Responsibility Advisor to Theresa May up until 2016. 

Broadly, Carillion overreached, trying to expand beyond its means. This attempt culminated in its unsuccessful bid to acquire Britain’s biggest construction firm, Balfour Beatty. Hedge funds and short sellers began noticing Carillion’s shaky foundations and toppling hubris as early as 2013

Overreach, coupled with the fact that large contracts proved to be less lucrative than originally thought (they were slashed by £845mn last year) conspired towards borrowing that ballooned from £218m in 2016 to over £900m in 2017. 

Carillion was responsible for £16bn worth of Government contracts, and the provision of essential public services relied on its viability. This includes support services, such as hospital cleaning; the company is also the largest manager of military bases for the Ministry of Defence and oversees the provision of essential railway maintenance for our privatised train services; it also provides school dinners and prison maintenance.

The level of conflict of interest inherent in the Chairman of one of the largest Government contractors being the corporate responsibility advisor to Theresa May is so flagrant it is worth restating:

Philip Green, the Chairman of Carillion, a Private Multi-service corporation on which the Government relied to deliver essential public services, and which ran up millions of pounds in debt to fund its overreach, was the advisor on corporate responsibility to Theresa May. 

The brazen blurring of the line, and the apparent incidence of public interests being trampled over by those of the private sector, is further compounded when you learn of the malfeasance that took place at the executive echelons of the corporation. 

Once it learnt of its £600mn accounting crisis, the executives at Carillion instead of making provision to protect the 43,000 jobs that it provides worldwide (20,000 in the UK), ensured that it protected its bosses £4mn bonuses.

On top of that, the corporation announced year-on-year dividend increases for 16 years up to 2016, all while running a pension deficit:

The greed inherent in the collapse of Carillion is a story of our times, and will be the story of the eventual collapse of neoliberal capitalism. The fact of essential public services being outsourced to behemoth monopolistic corporations run for profit is in itself perverse. 

Add to that a chapter of the highest levels of management of one of those companies being the advisor on corporate responsibility to Theresa May and the perversity becomes overwhelming.

The fate of Government projects, such as HS2 and Crossrail is yet to be seen. As is the fate of the employees of Carillion. David Lidington, the Cabinet Office Minister, has said that while some of Carillion’s services will be handed to other operators, some of them will be taken “in-house”, which effectively means nationalised. It will be interesting to track the progress of those services.

One thing is for sure, the nuclear fallout of Carillion’s demise is yet to be told, but rest assured there will be ramifications. If Carillion is to burn, it must blaze as the lighthouse torch, which glares its spotlight upon the inequity of public-private partnerships, and of the outsourcing of essential public services.

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