Lessons from Carillion’s Collapse have been Ignored, Says Unite

The government ‘has lost the plot’ after it announced proposals to require outsourcers to produce a ‘living will’, in case they collapse, according to Unite the union.

On Monday 19 November, the cabinet office minister David Lidington announced that major government outsourcers will be expected to draw up the corporate equivalent of a ‘living will’ to set out how contracts can be managed in the event of a company failure.

The living will proposals are part of the government’s plans to improve how they undertake and manage outsourced contracts. The cabinet office minister has admitted that when Carillion collapsed in January this year the government lacked “key organisational information”.

Rather than improving how outsourcing operates, Unite believes that the government should focus on insourcing and bringing contracts back under the control of the public sector.

Outsourcers Capita, Serco and Sopra Steria will be asked by the government to produce living wills in the next few weeks.

Unite’s Ian Woodland said, “The government has lost the plot by asking outsourcers to produce their own ‘living wills’.

“Not only does the ‘living will’ proposal show that the government’s outsourcing policies are on life support, but they are once again guilty of abdicating their responsibilities. If a major outsourcer collapses the last people you are going to trust to provide advice on how to maintain a service is the management who ran it into the ground in the first place.

“The idea that Carillion, whose collapse was linked to aggressive accountancy policies and failed to even provide an accurate and accessible list of its directors; should have provided a ‘living will’ to explain how contracts could operate, would be laughable if it was not so serious.

“Rather than tinkering round the edges at the broken outsourcing model the government should be concentrating on bringing services in-house, which is in the best interests of consumers and workers.”

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