The Confederation of British Industry has slammed the parliamentary committee report
The Confederation of British Industry has rebuked the MPs responsible for the inquiry into Carillion’s collapse, saying their final report unfairly tarnished all big businesses.
Josh Hardie, CBI deputy director-general, said the report had failed to address the big picture and was a “knee-jerk” response.
He said: “The language of the report suggests committee members think business in general is greedy and reckless. This is irresponsible and wholly inaccurate.
“Carillion was a painful lesson for business and government on the dangers of short-termism in public service contracts. This failure should act as a catalyst for a level-headed discussion about how the public and private sectors work together to deliver value to society, as they so often do.”
But while Carillion’s collapse highlighted the way such partnerships could go wrong, Hardie said there were many examples of business working well with the public sector.
He said: “200,000 organisations play a vital role in delivering public services, providing much-needed innovation and investment - whether through building new classrooms or transforming frontline public services - often in very challenging circumstances.
“Knee-jerk soundbites on Carillon risk locking out innovation and investment at a time when it’s needed most.”
The report, which was released earlier this week, was highly critical of directors, auditors, regulators and government representatives involved in the collapse.
MPs said directors showed “recklessness, hubris and greed” and said they had “no faith” in the Pensions Regulator or Financial Reporting Council because of their failure to intervene in the lead up to Carillion’s collapse.
Auditors also came under fire, with Carillion’s internal auditor Deloitte labelled either “unable or unwilling” to highlight risk, while the contractor’s external audtior KMPG was called “complicit” in the firm’s poor accounting practices.
When it came to advisors the report said: “The appearance of prominent advisors proves nothing other than the willingness of the board to throw money at a problem and the willingness of advisory firms to accept generous fees.
“Advisory firms are not incentivised to act as a check on recklessly-run businesses. A long and lucrative relationship is not secured by unduly rocking the boat.”