Labour MP for Redcar, Anna Turley, has slammed the government’s reliance on private sector contractors to deliver public services after the government’s biggest contractor, Carillion, went in to liquidation.
The company hold contracts for running services in large parts of the public sector, as well as the construction of key infrastructure projects like HS2.
Public service contracts on Teesside held by Carillion include James Cook University Hospital, where they have an agreement to provide catering, cleaning, linen and laundry, portering, reception, ward housekeepers, car parking and security management.
The difficulties at Carillion became apparent last summer when a profit warning indicated they were losing cash on key contracts and debt was rising.
Despite this the Government have since awarded them more than £2 billion in public contracts.
“First and foremost this is terrible news for the 43,000 employees whose jobs are on the line, and to the hundreds of contractors and small businesses with outstanding bills. The government have thankfully pledged to continue paying staff wages and to keep services running but the future is now uncertain.
“It appears that, like with the banks, Carillion became too big to fail. They have taken on projects around the world without having the means to deliver them. There are now serious questions for ministers to answer about why, despite knowing Carillion were in trouble, they continued to grant them billions of pounds worth of public contracts.
“The crisis shows that we need a fundamental review into the role of the private sector in delivering public services. In the good times the private sector cashes in the profits, but when things go wrong it is the taxpayer who is left to pick up the pieces.”