Carillion go down the shitter [split topic]

[Buelligan]

https://www.theguardian.com/politics/2018/jan/18/taxpayers-to-foot-200bn-bill-for-pfi-contracts-audit-office

A cannonball into the wall of the establishment's defences and a counterpoint to anyone challenging Labour on borrowing.

That's not a cannonball, this is a cannonball.

Lovely, lovely, Beast talks about borrowing (and all the rest of it).

[Gwen Taylor on ITV]

Indeed:

Carillion may have gone bust, but outsourcing is a powerful public good - John McTernan

Progress have also been tweeting a link to an article by Margaret Hodge with pretty much the same title.  All very coordinated.

[Johnny Yesno]

Progress have also been tweeting a link to an article by Margaret Hodge with pretty much the same title.  All very coordinated.

I suppose it's a good thing that they are evidencing those accusations of being red tories.

[Shoulders?-Stomach!]

https://www.theguardian.com/commentisfree/2018/jan/22/carillion-privatisation-myth-councils-pfi-contracts

Toynbee claims paradigm shift on privatisation. Cites some good examples. Everyone needs to hammer this home.

[Blumf]

https://www.theguardian.com/commentisfree/2018/jan/22/carillion-privatisation-myth-councils-pfi-contracts

but out of the spotlight local councils, under extreme stress from cuts, are cancelling contracted-out services. Why? Because it saves them money and improves services.

Hah! Squeeze the councils -> squeeze out your bestest buddies in the PFI racket.

Foot well and truly shot.

[jobotic]

Here's how you keep the pensions of highways enforcement officers and school meal supervisors safe - don't outsource them to your disgusting friends. Keep them in house and they can be in the Local Government Pensions Scheme.

[Shoulders?-Stomach!]

https://www.spectator.co.uk/2018/01/jeremy-corbyns-takeover-is-complete-and-the-tories-are-terrified/

The Spectator can't get through their piece without damning his renationalisation policies.

The argument is very brief - government get to hide failure unlike private sector and the cost of renationalisation wouldn't be covered by revenue.

[Replies From View]

https://www.spectator.co.uk/2018/01/jeremy-corbyns-takeover-is-complete-and-the-tories-are-terrified/

The Spectator can't get through their piece without damning his renationalisation policies.

The argument is very brief - government get to hide failure unlike private sector and the cost of renationalisation wouldn't be covered by revenue.

Seeing as it allows you only a certain number of free articles per week, I thought I'd paste the content.

For Jeremy Corbyn and his allies, there has been no far-left takeover of the Labour party or its governing National Executive Committee. It's true that, this week, Corbyn supporters came to control the majority of the NEC, completing their command of the party apparatus. But they see this as getting rid of the last of the right-wingers and enabling — for the first time — the Labour party to dedicate itself to the interests of the working class. It's not the triumph of a fringe, they say, but the expulsion of a fringe. The Corbynite agenda of government expansion, mass nationalisation of railways, utilities and more, can now be pursued.

Those still laughing at all that have not been paying attention. Mr Corbyn was quite correct, in his party conference speech, to say that his proposals are mainstream. When pollsters ask, they find clear majority support for the renationalisation of water, electricity and gas. Even among Tory voters, a majority support rail nationalisation. What about the privatisation of other services? A good case against that is being made by the collapse of Carillion, which ran everything from school canteens to the security at military bases. Its insolvency will soon be used as prima facie evidence of private sector incompetence.

Sir Keith Joseph, born 100 years ago this week, famously drew a distinction between the 'centre ground' of Westminster — the consensus among MPs — and the 'middle ground' that a party ought to share with the public. His words are often quoted by Tories to remind themselves that concern about European Union membership and immigration was quite widespread even if sneered at in London. But it is Labour that has learned Joseph's lesson. Jeremy Corbyn's argument is that his ideas, dismissed as fringe in Westminster, were not populist but popular. The last general election proved his point.

It's hard for a political party to go from obscurity to power, as the Westminster voting system tends to protect incumbents. Momentum, a group that did not exist four years ago, has instead succeeded in taking over a party: the leadership and the membership. The NEC changes mean Momentum's reverse takeover of the Labour party is now complete, and Labour MPs are now its hostages. MPs who complain about hard-left takeover will be told that this is not 'entryism' but simple democracy — which it is. Momentum found and inspired thousands to join the Labour party and call the shots. It deserves its victory.

In the general election, Corbyn increased his party's share of the vote more than any other leader of any other postwar party. He is now entitled to remake the Labour party in his image, just as Tony Blair once did. Just where this leaves Labour moderates remains to be seen. Now that the Corbynites have control of the National Executive Committee, they can force all MPs to be re-selected by their local party members — rather different members, given the Corbynite influx. Their only hope is that Corbyn keeps them on the grounds that a purge would be a distraction and that he already has the terms of their intellectual surrender.

Of course, it's not impossible that the Labour moderates will discover the backbone they've been missing since the start of all this debacle. Some might resign the whip for reasons of principle. Hugh Gaitskell once spoke about the need to 'fight, fight and fight again' for the party that you love — but it's far from clear that anyone loved the post-Gordon Brown Labour party enough to fight for it. There has been serious talk about Labour moderates going elsewhere. Whether this evolves past talk remains to be seen.

At first, such talk delighted Conservatives. Now, it terrifies them — or ought to. For years, they have been dismissing Corbynism on the same logic as the Labour moderates: that it is the agenda of a bunch of obsessives with no national support. Blairites would argue that Britain is fundamentally a capitalist country — but this is untrue. It's neither capitalist nor socialist, but a nation with plenty of support for both. Victory tends to go to the party that makes its case best.

This is why Carillion matters to the Tories. It collapsed because several of its projects became a lot more expensive. When a government project suddenly becomes unexpectedly costly or is extremely delayed — see HS2 or the Hinkley Point C nuclear generator — the taxpayer picks up the bill automatically. In the private sector, there is (or ought to be) no bailout. Failure is not just more likely; it is also more visible.

Under Corbyn, though, it would not be private contractors going bust, it would be the state itself. The bill for his renationalisations would never be covered by revenue, as he pretends. They would be a calamity, but the Conservatives seem reluctant to make that point. First, because they thought it was obvious. Now, because they don't know how.

At first, Labour moderates saw Corbyn as a harmless crank. Now, they cannot find an answer to him. This is what happens when politicians forget how to make an argument and rally people to their cause. The Conservatives should take note.

[Paul Calf]

Watching Spectator journalists trying to write about grassroots political movements is, to paraphrase Martin Mull, like watching a Dalek dancing about architecture.

[Johnny Yesno]

Watching Spectator journalists trying to write about grassroots political movements is, to paraphrase Martin Mull, like watching a Dalek dancing about architecture.

Heh! I couldn't express how odd that article reads, but I think you've nailed it.

[Barry Admin]

Jesus Christ, I gotta dig out my Martin Mull records. I forgot they even exist.

[greencalx]

That article comes so close to explaining why privatisation of essential public services can't work... the clue is the word 'essential' which implies that failure - rightly acknowledged as a required component of the free market model - isn't allowed.

Of course, much easier to declare governments incapable of managing big projects. Turns out the private sector is shit at it too. Maybe this stuff is just hard.

[biggytitbo]

As soon as this disappears out of the news cycle it seems not enough people give a shit anymore. See Grenfell, any other news story you can think of.

[Buelligan]

At first, Labour moderates saw Corbyn as a harmless crank. Now, they cannot find an answer to him. This is what happens when politicians forget how to make an argument and rally people to their cause. The Conservatives should take note.

No, I think it's what happens over time when simple dismissive homilies about housewives balancing their accounts get proven, through events, dear boy, to be a crock of balls.

People learn and stop being duped. 

It was a one-legged queening stool from the start and now that leg's dropped off, there's no sticking it back on and no one wants to get underneath again.

[Shoulders?-Stomach!]

If the only argument against the pigs in trough shitshow that is privatised, outsourced public services is that taking them back so they can't rob us again would be expensive, it's like telling the police not to prosecute criminals. It's the private equivalent of civil disobedience rendering a law redundant.

Just like tax dodging it's a capitulation that admits we can't afford to control you so you can just carry on.

[Shoulders?-Stomach!]

https://mobile.nytimes.com/2018/01/23/opinion/carillion-privatization-outsourcing-britain.html?referer=http://m.facebook.com/

Yer man Aaron Bastani (who many followers of left media will be familiar with), doing the Corb's work in the NY Times.

[Buelligan]

"The committee has published a letter from Robin Ellison, chairman of trustees of Carillion's DB Pension Scheme, giving an account of the last few years and suggesting they have been left with a funding shortfall of around £990m."Mr Ellison, who oversees six of the firm's defined benefit pension schemes, said in his letter to MPs that the company repeatedly cited "constraints in cash flow" prior to 2017, as the reason they could not make higher pension contributions.

The letter shows that pension trustees were "kept in the dark" about the state of Carillion's finances until late last year, the committee argues, and that dividends and bonuses were paid out at the expense of pension fund contributions."

http://www.bbc.com/news/business-42853895

Someone needs to question why employers are permitted to defer pension contributions.  How can this be reasonable?

[Shoulders?-Stomach!]

I would propose they are criminals whose assets should be seized.

[Shoulders?-Stomach!]

Tom McPhail, head of policy at Hargreaves Lansdown, says "it is easy to criticise the actions of the trustees and the Regulator with the benefit of hindsight

So it wasn't the trustees and regulators job to intercept issues so as to avoid this position being reached? The fact that criticism of them is being rebutted with such a weak argument says it all.

[Buelligan]

I would propose they are criminals whose assets should be seized.

Yes.  To me, it's absolutely fraudulent.  And the reason, a reason, I believe, that they continued to pay dividends is to keep the share price high, keep people buying the shares - if those people had known about the pension shortfall, would they have invested their money?  I think not.  Whilst I have less sympathy with share-owners, I still feel they are entitled to buy in possession of the facts. 

I'd be very interested to see the share investment and divestment behaviour of everyone who knew about this and their friends and families.

And, finally, what about the fucking pensioners - would you remain in the employ of a company that was behaving like this?  I think many would not and should have been given that choice.

I hope there's a nice big pile of heads at the end of this and they're the heads that were genuinely responsible but that won't butter any parsnips for ordinary people at the end of their working lives, picking up the tab, again, by living in poverty and dying in it.

[Bhazor]

This will delay and therefore greatly increase the cost of the new Liverpool hospital. So a win win for conservatives really.

http://www.bbc.com/news/uk-england-merseyside-42943297

And a good bit of misery porn with the DWP interviews.

http://www.bbc.com/news/business-42958507

[Shoulders?-Stomach!]

Reminded me of the hacking scandal interviews actually. I've seen less arse covering when we had to take showers after P.E in secondary school.

I despise Frank Field but I have to credit him after Rachel Reeves asked what the FD did with his shares in Carillion after leaving the firm, and the FD replied "I disposed of them in a normal and proper manner"

"....as soon as you left the company"

[Shoulders?-Stomach!]

Further fascinating reading of the carefully calculated manipulation of regulatory loopholes by Carillion.

https://edmayo.wordpress.com/2018/02/01/fake-non-profits-lies-damned-lies-and-carillions-non-profit-companies/

One of the ripples that has emerged out of the failure of Carillion is the use by private companies of 'non-profit' companies as a front for delivering public services.

What could be more trustworthy than a community enterprise which makes no profit out of essential services?

Well, the answer is that these can be fake non-profits, simply serving as a way for investor-owned outsourcing giants to launder the proceeds.

Rather like tax dodging, this is immorality of a kind that would warrant large fines and jail terms but because of the absence of robust regulation isn't going to result in that. In the world of corporations, anything the state says isn't illegal is moral, fair game. They don't have any scruples.

[Shoulders?-Stomach!]

https://corporatewatch.org/government-allowed-carillion-staff-to-work-in-prisons-without-mandatory-suicide-prevention-training-outsourcing-amey/

Further pisstaking

[Johnny Yesno]

http://www.bbc.co.uk/news/business-43275605

To help with cashflow, Carillion quadrupled payment terms on its subcontractors from 30 days to four months.

Some of those subcontractors now face bankruptcy.

The review also highlighted another Carillion practice - compensating for its failure to turn reported profits into cash by taking on further debt.

It said: "Rather than addressing the underlying challenges facing the group in respect of problem contracts and the strength of the balance sheet, transactions were entered into, and accounting treatments and assumptions made, to enhance the reported profitability and net debt position of the group."

The report was unpublished until now, because Carillion bosses deemed its findings as "too harsh".

[Bhazor]

Set to cost tax payers at least 148million quid.

https://www.msn.com/en-gb/money/news/carillions-accountants-and-lawyers-will-get-%C2%A370m-to-manage-collapse/ar-AAyknzp?li=AA54rU

60million of which will be going to the legal firm dismantling Carillion.

[BlodwynPig]

Set to cost tax payers 148million quid.

https://www.bbc.com/news/amp/business-44383224

I haven't got that sort of money

[Blumf]

The ride never ends!

https://www.bbc.co.uk/news/business-46505688

Shares in Interserve - one of the UK's largest providers of public services - have collapsed after it revealed it is seeking a rescue deal.

The firm, which works in prisons, schools, hospitals and on the roads, has £500m of debts and says its rescue plan will involve issuing new shares.

In early trade, its shares fell to 6.5p, down 70% from Friday's level. The shares were worth 100p a year ago.

[greencalx]

Ah yes, I was wondering whether to re-bump this thread...