Carillion’s collapse: Time to regulate construction services companies like banks
Comment from Brendan Sharkey, construction partner at MHA MacIntyre Hudson
“Carillion’s provision of valuable outsourcing services and facilities management to national and local authorities means local services will feel the harsh impact of its collapse. In the future the government should insist on a ring-fencing the outsourcing operations big public sector service providers perform for schools, prisons and local authorities from the costly and risky construction projects these giant companies also undertake.
“After the financial crisis the government forced the banks to separate consumer banking from their riskier loans and financial operations. Regulating giant service providers in the same way would prevent the profits generated providing school meals and housing from being used to shore up over-budget construction programmes.
“The collapse has also highlighted the danger of construction companies spreading themselves too thinly across different areas. Firms may be wise to take a leaf out of Balfour Beatty’s book and focus on specific sectors of the market, building up expertise and leveraging specialised skills to gain a competitive edge, thereby derisking their operations.”
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About MHA MacIntyre Hudson
MHA MacIntyre Hudson is a top 20 UK accounting firm, offering a full range of compliance and advisory services to entrepreneurial businesses, groups and multinationals with operations in the UK, and now to offshore investment funds. The firm has 90 Partners and over 700 staff in fourteen offices in London, the South East, East Anglia, and the Midlands and in the Cayman Islands. MHA MacIntyre Hudson is the UK member of Baker Tilly International, one of the world’s largest leading networks of independently owned and managed accountancy and business advisory firms.