On Tuesday, the Financial Times devoted virtually a full page to a story headed: "Schools out in cold as Jarvis leaves a trail of delays and dissatisfaction". This threw the spotlight on Jarvis' Accommodation Services division, which had hitherto avoided the public opprobrium directed at the firm over the Potters Bar rail crash. Then, just 24 hours later, Jarvis warned that profits will be £12m lower than anticipated this year because that same Accommodation Services division is facing delays reaching financial close on four PFI deals – with a concomitant rise in bid costs. A real sense of crisis is starting to envelope the support services company. It's just three months since it – along with other contractors – was stripped of its rail maintenance work; and just two months since Paris Moayedi, the chairman who had been subjected to vicious personal attacks in the national press, stepped down. Moayedi's successor is Steven Norris, who will himself quit in May if he's elected mayor of London. Where will it all end?
The great problem for contractors such as Jarvis is the way an entire business can be stigmatised in the media by the travails of one part of the operation. The FT didn't need a profit warning to justify probing Jarvis Accommodation Services; the tangential link with Potters Bar was enough. Would the various grumbles of head teachers and subcontractors have merited as many column inches if the contractor had been Bovis rather than Jarvis? Hardly. Balfour Beatty was subjected to a similar line of scrutiny, too. The Guardian highlighted Balfour's own problems in rail to question its suitability to manage Birmingham's new £521m PFI hospital. As the Balfour spokesperson put it, the rail problems are "not relevant" to the hospital deal. In business terms, that's true. But although private sector clients would appreciate the distinction, newspapers – and the public at large – won't. Faith in the credibility of the brand counts for everything.
How should contractors respond? As Hutton proves, it's a bad idea to defend the indefensible.
In that sense, Andrew Sutton, chief executive of Jarvis Accommodation Services, did a fair job of rebutting the FT's criticisms. He answered all the questions and stuck to the facts. Although some readers will cringe "oh no, not Jarvis again", contractors might conclude that tales of contract delays and wrangles over retentions were pretty much par for the course. The worst thing a company in Jarvis's position can do is to moan – like Kevin The Teenager – that all the public scrutiny is "sooooo unfair" and run for cover behind a posse of PRs. That won't wash. Contractors must understand that public contracts, ultimately serviced by taxpayers' money, are a legitimate object of journalistic inquiry. Nor will the public be fooled by superficial rebranding exercises. Just as the dear old Post Office was never reborn as exciting new Consignia, Jarvis wouldn't be able to escape its past by calling itself Catamaran. In the post-Hutton era, spin is out. Reputations can only be founded on honest public pronouncements, and honest endeavours in the boardroom and on site.
Adrian Barrick, editor