黑洞社区

Carillion was using recently awarded government contracts 鈥� including two jobs on the HS2 railway 鈥� to convince thousands of suppliers to stick with it, new documents reveal.

According to a supplier briefing update sent out on 21 July last year 鈥� 11 days after it announced an 拢845m writedown 鈥� the firm said government awards, which also included FM work at more than 230 Ministry of Defence sites in northern England, Scotland and Northern Ireland, were 鈥渁 sign of the confidence that our key customers have in our ability to meet their requirements鈥�.

The HS2 contracts, worth 拢1.4bn, were awarded just a week after the writedown on 10 July. The MoD jobs, worth 拢158m, came a day later.

The deals emboldened the firm to send out the supplier briefing note in which it said the firm was 鈥渃ommitted to business as usual鈥�.

In the note, seen by 黑洞社区, Carillion wrote: 鈥淲e continue to be committed to business as usual with all of our partners, suppliers and stakeholders, including adherence to all payment terms.鈥�

It told suppliers that it had begun a cost reduction programme as part of a restructuring but reassured them its future trading was 鈥渦nderpinned by our order book and ability to win good work鈥�, promising it had 鈥済ood revenue visibility for 2017 and beyond鈥�. It added: 鈥淚t is important to highlight that Carillion (including Carillion Construction) remains well financed and trading within our banking limits.鈥�

Following the firm鈥檚 collapse last month, the government has been accused by opposition MPs of inflating confidence in Carillion by handing it lucrative contracts in the days after last July鈥檚 writedown.

Last month shadow transport secretary Andy McDonald said his opposite number in government, Chris Grayling, had 鈥済ot it spectacularly wrong鈥� and that 鈥渉is judgment and [鈥�] confidence were disastrously misplaced鈥�. But Grayling said: 鈥淚 don鈥檛 accept that at all. At the time, I reviewed those carrying out the contracting very carefully.鈥�

And in a parliamentary debate on the day Carillion went under, Labour鈥檚 shadow minister for the cabinet office, Jon Trickett, said the government was 鈥渞ecklessly complacent鈥� in awarding Carillion contracts 鈥渄espite all the information that has clearly been in the public domain鈥�. He added: 鈥淲hy was it apparent to everyone except the government that Carillion was in trouble?鈥�

Rudi Klein, chief executive of the Specialist Engineering Contractors鈥� Group, said suppliers who received the letter ended up being duped. 鈥淭hat was the whole point of it 鈥� it worked,鈥� he added. 鈥淭hey were selling the idea of 鈥楥ome on guys, everything is alright, everyone has confidence in us and so must you鈥�.鈥�

The latest session of the parliamentary inquiry into Carillion鈥檚 collapse is due to take place later this morning, with representatives from its auditor KPMG, including the accountant鈥檚 head of audit, Michelle Hinchliffe, and the Pensions Regulator set to face a joint committee of MPs.