Business lobby group the CBI has argued that “knee-jerk soundbites” within MPs’ Carillion joint inquiry report could affect the business world’s reputation and hamper investment.
The 107-page report published yesterday branded the contractor’s collapse a story of “recklessness, hubris and greed” and claimed the firm’s board oversaw a “rotten corporate culture”.
However, the CBI’s deputy director-general Josh Hardie said: “The language of the report suggests committee members think business in general is greedy and reckless. This is irresponsible and wholly inaccurate.”
MPs on the BEIS and work and pensions select committees also accused Carillion’s directors of engaging in a “relentless dash for cash” by taking on low-margin contracts and “exploiting” its supply chain.
Carillion went under in January with a debt pile of £1.5bn and 2,301 people have since been made redundant.
Its former finance boss Richard Adam said he rejected the committees’ conclusions and objected to quotes in the report.
Carillion’s former chairman Philip Green said the board had “always strived to act in the interests of the company and all its stakeholders”.
Mr Hardie added: “Carillion was a painful lesson for business and government on the dangers of short-termism in public service contracts.
“This failure should act as a catalyst for a level-headed discussion about how the public and private sectors work together to deliver value to society, as they so often do.
“200,000 organisations play a vital role in delivering public services, providing much-needed innovation and investment – whether through building new classrooms or transforming frontline public services – often in very challenging circumstances.
“Knee-jerk soundbites on Carillon risk locking out innovation and investment at a time when it’s needed most.”
However, another business group, the Institute of Directors, backed the report and its conclusions.
“MPs are right to criticise the failures they have identified that led up to the collapse of Carillion, an event which appalled many in the business community,” said the IoD’s director of policy Edwin Morgan.
“Where there are examples of boards not coming up to scratch, it’s correct that they should be brought to light so that other directors can avoid the same mistakes.
“What matters isn’t the rhetoric, but that all boards learn from Carillion to banish wishful thinking, be honest with shareholders and take action when something is going wrong.”