Scottish Affairs committee says it will now examine penalties including possible ban on tendering for public sector work

Houses of Parliament

Source: Berto Garcia

An influential committee of MPs investigating blacklisting in the construction industry has questioned the evidence it heard under oath from three of the major contractors involved - Balfour Beatty, Sir Robert McAlpine and Skanska.

The interim report of the Scottish Affairs select committee’s inquiry into construction industry blacklisting, published today (16 April), said blacklisting caused financial hardship to its victims, disrupted people’s lives and sometimes “ruined” them.

The report said the committee was “unconvinced” that Balfour Beatty regretted its involvement with The Consulting Association (TCA), the blacklisting firm exposed and closed down in 2009.

It also said it was concerned by the failure of firms including Balfour Beatty and Skanska “to hold any individual to account” for wrongdoing and said it was not persuaded by Sir Robert McAlpine director Cullum McAlpine’s claim that he had a “hands off” role as the founding chairman of TCA.

The report was responding to evidence given in recent months by a number of witnesses including Cullum McAlpine, Balfour Beatty UK Construction Services chief executive Mike Peasland and Harvey Francis, executive vice president of human resources at Skanska.

Responding to Peasland’s evidence last month, the committee criticised his decision not to provide the committee with the company’s internal review on blacklisting on the grounds of legal privilege.

“While we are sure that Balfour Beatty regrets being caught, we were less convinced that management regretted its involvement with TCA,” the report said.

“On the second point, we cannot comment on the robustness or extent of the internal review until we see a copy of the document. We encourage Balfour Beatty to engage with us in a spirit of openness and honesty.”

It added that the committee found it “difficult to accept” that no one at Balfour Beatty had been sacked or made redundant as a result of the company’s wrongdoing.

On Skanska, the report noted Francis’ claim that Skanska’s involvement with TCA was dependent on one individual who has now left the firm – Stephen Quant.

The report said: “We have no evidence to contradict this, though it seems implausible that no one else in the company had the slightest inkling that potential employees or subcontractors were being systematically checked against a database.”

It continued: “We remain concerned by the failure of Skanska to hold any individual to account for the wrongdoing which it has acknowledged … the fact remains that thousands of workers may have had their employment prospects blighted and their lives significantly disrupted.”

Turning to Sir Robert McAlpine, the report said that Cullum McAlpine’s position as founding chairman of TCA and as director of one of the biggest spenders on its services “suggests his involvement may have been rather more substantial than he suggested”.

It also criticised the “evasive wordplay” of the argument made by witnesses including McAlpine that because not everyone on TCA’s database was refused employment, the files did not constitute a blacklist.

The report thanked witnesses but said the committee was “far from certain that all of our witnesses have told us ‘the truth, the whole truth and nothing but the truth’, despite many of them being under oath”.

It also criticised watchdog the Information Commissioner’s Office, which uncovered TCA, saying it had not taken sufficient action to notify individuals on the blacklist and calling for the contents of the database “suitably redacted” to be published.

The report said the committee intends to continue with its inquiry, calling other firms to give evidence and examining four further topics. These are whether blacklisting is continuing, what level of compensation should be provided to victims, what punishment should be imposed on firms involved - including a possible bar to public sector contracts - and whether changes to the law are still required.

A spokesperson for Balfour Beatty said the firm had expressed its “genuine regret” over its use of TCA.

The spokesperson added: “For Balfour Beatty this is a historic issue…We have since taken action to ensure it does not happen again. Since 2009, our company code of conduct prohibits the checking of references for job applicants without first obtaining their consent and prohibits the use or support of databases of ‘blacklisted’ people and the supply of information to such databases.

“We co-operated fully with the ICO’s investigation and continue to co-operate with the Scottish Affairs select committee inquiry.”

A spokesperson for Skanska said it welcomed the committee’s report and said it had made “fundamental changes” to its working practices and culture since 2009.

“Skanska remains committed to working with the committee, as it continues its investigation, and addressing the issues raised in the report,” the spokesperson added. “At the committee hearing, Skanska addressed the areas of concern raised by the committee members and apologised for its past actions, saying it was “truly sorry for its involvement”.

A spokesperson for Sir Robert McAlpine said it had “never operated a blacklist,” adding that it is “and had always been wholly committed to maintaining good relationships with our workforce and to responsible trade unionism.”