Nicholas Watt: Cross-party convergence on failure of Carillion
Carillon, the second largest Government contractor, went into liquidation on Tuesday morning.
Around 20,000 jobs are at risk after bosses at the stricken firm said they had "no choice but to take steps to enter into compulsory liquidation with immediate effect”.
Following the collapse Labour leader Jeremy Corbyn criticised the Government for what he called an “outsource-first dogma”.
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However, the BBC’s Nicholas Watt reminded the politician last night it was his own party who were keen to introduce widespread use of PFI schemes similar to those Carillon were in charge of.
Citing conversations with senior MPs he said while Carillion’s collapse played into “the meta-narrative” that “Tories are about protecting our private sector friends” he added that it was worth remembering that “most of this process started under Tony Blair”.
He added: “We have rare agreement between senior Labour and Conservative people that this may well be a defining moment for this country.”
PFIs are a method of providing funding for major public sector contracts.
Carillion have major contracts in the rail industry, education and NHS but have struggled since reporting half-year losses of £1.15 billion.
The group had racked up £900 million of debt and a £590 million pension deficit and saw its share price plunge more than 70 percent in the past six months after making a string of profit warnings and breaching its financial covenants.
Morgan: Government refused to talk about Carillion on GMB
As a result, the Government has been under increasing pressure to intervene to prevent the collapse of the company.
Nicholas Watt’s reminder that Labour are responsible for the widespread use of PFI agreements comes after Jeremy Corbyn gave a blistering attack on their use.
He said: “In the wake of the collapse of the contractor Carillion, it is time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced the public of billions of pounds.
“This is a watershed moment. Across the public sector, the outsource-first dogma has wreaked havoc.
“Often it is the same companies that have gone from service to service, creaming off profits and failing to deliver the quality of service our people deserve.
“The evidence is clear and it is everywhere.”