Questions over Carillion scandal

Nothing makes me see red more than the sight of '˜fat cats' being paid bonuses and salaries while struggling workers are losing their jobs and pensions.

Thursday, 25th January 2018, 3:49 pm
Ronnie Campbell, Blyth Valley MP.

We have seen that with the Carillion collapse.

Accountants warned that tens of thousands of small firms, many across the north east, may get just a penny in the pound from the government construction contractor.

The company employed 43,000 people worldwide, 20,000 in the UK, and had 450 contracts with the government. Just think of how many families are seeing their future torn apart.

But spare a thought for the bosses at Carillion.

Former chief executive Richard Howson stepped down in July after earning around £1.5m in 2016. Finance director Richard Adam, who retired in December 2016, received almost £1.1m in salary and bonuses.

Former finance chief Zafar Khan, who left Carillion in September, was due to receive £425,000 in base salary for 12 months. That has been blocked by those in charge of sorting out this mess.

So too has the deal by which interim chief executive Keith Cochrane was due to be paid his £750,000 salary until July, despite being due to leave next month.

That is welcome news, but given that this scandal has been dragging on, mainly below the public radar, for months, they should never have been offered the deal in the first place.

Shadow chancellor John McDonnell was right to say that the government had questions to answer over why Carillion was awarded seven public sector contracts after it received several profit warnings. Why, instead of intervening, did treasury ministers drip-feed more contracts to Carillion?

The government was too close to this company and too wedded to its privatisation role, which is cold comfort for those facing the scrapheap while fat cats move on to enjoy the rewards of management failure.