The publication yesterday of a report by two Parliamentary Committees into the collapse of Carillion brought back into the light information that was last published by the same committees back in February about the huge sums of money paid to four dominant accountancy firms by Carillion itself, its Pension fund and the Government over the last 10 years. Between the four firms they have been in receipt of over £71m in that time. An average of £7m per year across the four firms for the auditing, and advice to one large firm that itself was allowed to dominate the public sector along with a handful of other firms such as G4S, Serco, Capita, Kier, Veolia, Atos and Mitie. The problem when firms become so big and have their feet clearly under the table of Government procurement processes is that public money begins to fund very wealthy individuals at the head of such businesses and the potential for creative and innovative ideas to become part of the solutions gets lost because it is seen as risks that no one wants to take. Even amongst charities the Government resists the urge to commission services from small organisations. As I wrote the other day the replacement for the probation service was launched with a promise to utilise charities to help assist people leaving prison or custody. Yet the evidence after 3 years is that almost all of the funding has gone to charities with a turnover of more than £10m.

At the launch yesterday of the report by the two Parliamentary Committees Rachel Reeves MP, Chair of the BEIS Committee, said:

“Carillion’s collapse was a disaster for all those who lost their jobs and the small businesses, contractors and suppliers left fighting for survival. The company’s delusional directors drove Carillion off a cliff and then tried to blame everyone but themselves. Their colossal failure as managers meant they effectively pressed the self-destruct button on the company….The collapse of Carillion exposed terrible failures of regulation. The Government needs to stop dithering and act to ensure regulators are up to the job of intervening before companies fail, rather than trying to pick up the pieces when it is too late.”

The reality is that the Government also needs to change the way it views procurement, whether that is the procurement of services from four large accountancy firms or procurement from organisations such as the large companies mentioned above. The promise by the Government to increase the procurement amongst SMEs seems to have evaporated, and even there, the focus was on Medium Size businesses rather than Small or Micro Enterprises. If we are going to grow our economy in a way that ensures that large numbers of people benefit, then taking a bit more time in the procurement process will have a significant impact. Businesses will continue to fail as is the nature of organisations, but each failure will then only impact a very small number of people and can be easily replaced.