This website uses cookies primarily for visitor analytics. Certain pages will ask you to fill in contact details to receive additional information. On these pages you have the option of having the site log your details for future visits. Indicating you want the site to remember your details will place a cookie on your device. To view our full cookie policy, please click here. You can also view it at any time by going to our Contact Us page.

'Cracks were visible' for Carillion well before 'directors or auditors admit'

26 February 2018

Issues within the Carillion PFI contract at Royal Liverpool Hospital have been highlighted by MPs in the ongoing investigation by Parliament into the company's failure.

These included an £845m write down due to cracked beams discovered in November 2016 and the incident is seen as bringing the company's financial problems to light, according to a letter published by MPs last week, SHP magazine reported.

They had previously questioned former Carillion chief executive Richard Howson about the contract and "the lack of challenge and preparation for a potentially disastrous scenario".

Mr Howson told MPs that the cracked beams incident had resulted in more than £20m being added to its costs.

"I am illustrating how the cost projection changed in Q2 of that year," he said.

However, the company had stated that it had been necessary to create an exclusion zone above and below the area concerned until "temporary beams could be installed".

This was not removed below the area until late January 2017 and remained in place for the area above the cracked beams until late March 2017, which meant that no work was permitted to take place during these times.

The incident was discussed by MPs at last week's inquiry session, where Frank Field said: "These famous beams are becoming an ever more perfect parable for the whole company: the cracks were visible long before the directors or auditors admit, and while they were dutifully added to the litany of factors and organisations to blame for Carillion's spectacular demise - anyone and anything but the people running it - they were only ever holding up one part of Carillion's thousands of projects."

Print this page | E-mail this page


Article image Why the Law Says You Need a Nappy Bin Disposal Service

At home, parents are used to disposing of their babies’ used nappies the same way they do any other domestic waste - bagging it up and sticking it in the rubbish for general collection.Full Story...

Article image Supply chain business owner speaks out on anniversary of Carillion collapse

Owner of Johnson Bros (Oldham) Neil Skinner has spoken of the severe difficulties experienced by his company through working with Carillion on the anniversary of the company’s collapse.Full Story...

Momentum increases to improve supply chain payment

Further expansion announced by IFMA

Jail sentence for company director for sale of illegal products