Big four accountants accused of feasting on Carillion

Aaron Morby 4 years ago
Share

Britain’s big four accountancy firms have been accused by MPs of  ‘feasting on the carcass’ of collapsed Carillion, collecting more than £70m in fees in over a decade.

A joint inquiry by two select committees has published a breakdown of fees collected by KPMG, PwC, Deloitte and EY.

This reveals the big four billed the company, pension schemes and the Government nearly £72m since 2008 relating to Carillion.

Field Field, chairman of the work and pensions committee, said: “The image of these companies feasting on what was soon to become a carcass will not be lost on decent citizens.

“We saw at the end of our evidence session that the former directors of Carillion are, unlike their pensioners, suppliers and employees, alright.

“These figures show that, as ever, the Big Four are alright too. All of them did extensive – and expensive – work for Carillion.”

PwC, now handling the liquidation process, came in for particular criticism.

He added: “PWC managed to play all three sides – the company, pension schemes and the Government – to the tune of £21m and are now being paid to preside over the carcass of the company as Special Managers.

“It was perhaps telling that, with their three fellow oligarchs conflicted, PWC were appointed to this lucrative position without any competition.”

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee, said watchdog MPs would to day question KPMG about its role in auditing Carillion’s accounts before the group’s collpase with over £1.3bn of debt.

Reeve said: “KPMG has serious questions to answer about the collapse of Carillion.

“Either KPMG failed to spot the warning signs, or its judgement was clouded by its cosy relationship with the company and the multi-million pound fees it received.

“For the sake of all those who lost their jobs at Carillion and in the interests of better corporate governance, KPMG should, as a bare minimum, review its processes and explain what went wrong.”

KPMG, who will be questioned in Parliament on 22 February, have audited Carillion’s accounts every year since the company’s inception in 1999, receiving £29.4m in fees in the process.

In documents submitted to the joint committee, KPMG  does not accept any suggestion of blame but said it conducted its work “appropriately and responsibly”.

PwC said: “It’s appropriate that the Joint Committee consider all aspects of the collapse of Carillion and we will continue to cooperate fully with their enquiries.

“The Joint Committee’s request for information dates back to 2008 and the majority of the work that PwC undertook directly for Carillion was carried out prior to June 2015 rather than in the last few months before its collapse.

“Our technical skills and ability to deal with complex business problems led to our appointments to work for the Government and the Pension trustees.

“While there are only four large professional services firms, the market has been subject to extensive review by the Competition Commission (now succeeded by the Competition & Markets Authority) and European Commission. We comply with all rules that have resulted from these extensive reviews.”

Latest news

Kit maker Genie fined after M25 work platform death fall

Court hears how calibration error led to death of worker when 40 metre high mobile elevating work platform collapsed
2 hours ago

O’Connor Utilities sold to private equity

OCU Group reported to have fetched around £400m
24 hours ago

Rolls-Royce shortlists sites for first SMR factory

Three factories will make reactor, civils and MEP modules for SMR nuclear power stations
3 hours ago

£233m loan kick starts £3.5bn regen of Royal Docks site

Infrastructure loan paves way for 6,000-home East London Silvertown scheme
2 hours ago

Henry Construction wins £33m Oxford housing estate rebuild

Contractor signs off first deal with A2Dominion
3 hours ago

Carillion collapse hospital hit by more construction delays

Balfour will take another 18 months to complete Midland Met scheme
19 hours ago

Leeds college launches new construction and football course

Students can now combine site and tech skills with learning at a football academy
3 hours ago

Willmott Dixon blasts new Building Safety law

Rick Willmott accuses Government of scapegoating construction over its own regulatory failure
1 day ago

£550m plan to redevelop The Galleries centre in Bristol

Shopping centre building to be demolished for major mixed-use scheme
1 day ago

Costain cancels supply chain event on £260m road job

Preparation work for A1 upgrade stalls as Transport Secretary dithers over approval
1 day ago

£170m London Holborn Circus office approved

Demolition work set to start in the autumn for 10-storey office block
1 day ago

City leaders launch net zero construction skills drive

City of London leader warns "skills gap and labour shortage are threats to our net zero ambitions"
1 day ago

Marlborough Highways lands £32m Islington civils deal

Contractor to help with north London borough's green drive
1 day ago

Osborne makes £45m construction loss

Sale of infrastructure business balances books as contractor looks for zero-carbon wins
4 days ago

John F Hunt forecasts record revenue and profits this year

Demolition contractor back on strong financial footing after previously setting aside £5.6m for bid rigging probe
4 days ago

Notting Hill Genesis names £2.8bn framework winners

26 firms land places on main contractor deal: Full list
4 days ago

Green light for dual hotel scheme at Nine Elms

Two new hotel towers will share common basement
4 days ago

Trials start on cement-free pre-cast piles

Aarsleff is hopeful a product will come to the market shortly
4 days ago

Ex-Telford Homes boss to run green house builder

Jon Di-Stefano takes helm at M&G backed Greencore Construction
4 days ago

Subcontractors told to stop work on Brymor sites

£80m revenue southern contractor files letter of intent to enter administration
5 days ago

House builder Chartway sold to private equity firm

Cabot Square Capital signs another major construction deal
5 days ago

Murphy Group appoints new chairman

Capita chairman and investment banker John Cresswell to start in November
5 days ago

Tolent seals £40m Newcastle ‘future-living’ housing job

135-home Vaux scheme will be first of four neighbourhoods totalling 1,000 homes
5 days ago

Cruden takes first job at £1.3bn Edinburgh Waterfront scheme

Preferred bidder named for first 750 net zero homes at new Granton Waterfront coastal town
5 days ago

Trio of student towers to be built at Brent Cross Town

Ground works under way with main contractor due to be appointed next month
5 days ago

Keltbray gets start date for £50m motorway upgrade

Contractor hails "significant step forward" for highways business
6 days ago

Site workers settle for 5% pay increase

Contractors and unions agree one-year deal following months of talks
7 days ago

Rising wages and skills gap to overshadow materials issues

Materials and product Inflation tops 20% so far this year, but labour set to be next big headache
6 days ago

Erith pays £2.8m bonus to staff after ownership switch

Around 450 staff have on average received over £6,000 since move to employee ownership five years ago
6 days ago

Algeco lands £19.2m Leeds modular school scheme

Offsite specialist will supply and install 192 steel frame modules
6 days ago

Contractor services