Ex-Carillion CEO hits back at report into contractor’s collapse

Former Carillion boss Richard Howson has slammed a select committee report published last month looking into the contractor’s collapse, suggesting late payment from the Government played a part in the company’s downfall.

Howson said the report, which followed an inquiry by the pensions and business select committees, “had not considered all of the issues”.

“The report has not considered all of the issues which are key to understanding the reasons why Carillion went into liquidation. In dealing with the issues which have been covered, the report has omitted or ignored some of the more significant evidence submitted,” he said.

In his response, Howson blamed government for delaying payments and disputing additional amounts on contracts.

“Carillion in my time was constantly chasing up its Government and public sector customers to agree such additional amounts, despite the fact that such amounts had arisen because those customers had failed to adequately understand the size of their estate and had failed to administer the contract between the customer and Carillion in a fair and timely manner.

“Therefore, these amounts should never have been disputed because they flowed from the pricing structure in the contracts and the terms and conditions within the contract relating to change management.

“At the time of my departure substantial amounts were properly due to Carillion under the contract from Government, or from Government-owned or majority-owned entities on a range of contracts.

“I understand from concerns raised with me by senior members of the Carillion team present at the point of the liquidation that similar large amounts were still outstanding.”

Howson also claims that government and the wider public sector “failed to provide adequate data and threatened to strike out the company as a contender for future work” if Carillion had pursued its claims against the government by the threat of litigation.

Howson added that the reasons for Carillion’s demise “are mixed and varied” and “yet to be fully understood”.

“Yes, debt was too high but for my part I was absolutely committed to working through to conclusion our challenging contracts and reducing it. As a board we relied on cash flow forecasts, working capital projections and on our customers acting in accordance with the contracts and administering fair and timely cash flows.

“However, any examination of the causes of the liquidation has to look closely at the events immediately preceding the liquidation. Without such an investigation, any findings are flawed and incomplete. No review was conducted of those last few crucial months and the actions taken or more importantly not taken leading up to the liquidation both by the company and by government.”

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