How 'ticking corporate timebomb' left the Royal Liverpool Hospital gathering cobwebs
A ‘rotten corporate culture’ has left the Royal Liverpool Hospital ‘gathering cobwebs’ and a ‘creaking monument to the greed of Carillion’s directors’, an explosive new report has found.
In a savage assessment of the failures at the top of the construction firm - which went bust in January - MPs said board members were ‘responsible and culpable’ for the company’s demise through their ‘recklessness, hubris and greed.’
In the final report of their inquiry into the spectacular collapse of Carillion, the Work and Pensions and Business, Education and Industrial Strategy (BEIS) Committees have concluded that Government has “lacked the decisiveness or bravery” to address the failures in corporate regulation that allowed Carillion to become a “giant and unsustainable corporate time bomb”.
But it was the disgraced firm’s board that came in for the harshest criticism, with the report describing its activities as “a relentless dash for cash, driven by acquisitions, rising debt and exploitation of suppliers” with at best questionable accounting practices that “misrepresented the reality of the business”.
The MPs are now calling on Government to carry out an “ambitious and wide-ranging set of reforms” to “reset our systems of corporate accountability”. “The mystery is not that it collapsed, but that it lasted so long.”
Birkenhead MP Frank Field - who is the chair of the committee - said: “Same old story. Same old greed.
“A board of directors too busy stuffing their mouths with gold to show any concern for the welfare of their workforce or their pensioners.
“They rightly face investigation of their fitness to run a company again. This is a disgraceful example of how much of our capitalism is allowed to operate, waved through by a cosy club of auditors, conflicted at every turn.
“Government urgently needs to come to Parliament with radical reforms to our creaking system of corporate accountability. British industry is too important to be left in the hands of the likes of the shysters at the top of Carillion.”
Work on the £335m Royal project stalled after Carillion’s collapse, with bosses saying the new hospital is unlikely to be finished this year.
In another stinging attack on the company’s board members, Mr Field said: “The Royal Liverpool Hospital stands gathering cobwebs, as a creaking monument to the greed and hubris of Carillion’s directors. Our investigation found that it was at the forefront of the accountancy tricks Carillion used to convince the outside world that all was rosy. For the people of Merseyside, no sign of their promised new hospital in sight, the reality is all too apparent.”
Fellow Labour MP Rachel Reeves is the chair of the BEIS committee and had similarly strong comments to make about the culture at Carillion.
She said: “Carillion’s collapse was a disaster for all those who lost their jobs and the small businesses, contractors and suppliers left fighting for survival.
“The company’s delusional directors drove Carillion off a cliff and then tried to blame everyone but themselves. Their colossal failure as managers meant they effectively pressed the self-destruct button on the company.”
But she said the auditors of the company should ‘also be in the dock for this catastrophic crash’, stating that they too are guilty of failing to tackle the crisis at the company
She said: “The sorry saga of Carillion is further evidence that the Big Four accountancy firms are prioritising their own profits ahead of good governance at the companies they are supposed to be putting under the microscope.”
Work stalled at the Royal following Carillion’s collapse, but officials from the Royal Liverpool and Broadgreen University Hospitals NHS Trust say they are now in ‘advanced talks’ with another building firm - which is reported to be Laing O’Rourke.Liam Thorp, Liverpool Echo