Carillion has continued to hog the headlines in the past seven days but debate among CN readers has broadened to look at the wider implications and what needs to change.
‘Give them a bloody nose’
The rail industry took up much of the spotlight, with Carillion’s huge presence in the sector resulting in confusion and uncertainty in the wake of its collapse.
Reacting to reports that a number of subcontractors had abandoned Network Rail sites amid concerns over contracts, Michael Conway used the article’s comments section to describe it as “another example of the poor way this industry treats its very hard-working subcontractors”.
He continued: “That client must be holding onto a huge amount of money owed to Carillion – pay it to the subcontractors and give the receivers a bloody nose.”
Another reader pointed to the timing of Carillion’s demise: “Imagine if Carillion went bust before Christmas and what a major impact that would have had on Network Rail’s upgrade programme.
“Is it me or is it all rather convenient that Carillion went bust just after they had completed these works? I can’t see how a month’s worth of intense, risky rail work would have saved a company with hundreds of millions of pounds of debt.”
‘Surely this is illegal’
These reports of subbies halting Network Rail work were followed by the news that a deal had been struck that will see 300 Carillion suppliers paid for work between Christmas and its liquidation.
The first comment on the story summed up many: “I am amazed.”
This soon gave way to numerous questions about the finer points of the deal and the bigger liquidation picture – questions which CN will be analysing in the coming days.
“I agree it is amazing, but let’s celebrate: the client has recognised it needs these companies and has stuck its neck out”
“Surely this is illegal,” one reader asked. “Why does one group of subcontractors / suppliers get preferential treatment over another?”
Graham Grigg agreed: “I don’t quite understand how this is taking place. Whilst I am glad some are getting paid, can anyone explain, as they are not ‘preferential creditors’ – even though they should be in every instance.”
Michael Conway followed up his comment from the story earlier in the week: “I agree it is amazing, but let’s celebrate: the client has recognised it needs these companies and has stuck its neck out and put some money in the kitty.
“Would have all been so much better if clients pay into a project bank account where suppliers are protected.”
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‘We’ve been waiting long enough’
Carillion lay at the centre of the week’s other big story: main contractor body Build UK calling for retentions to be abolished by 2025, alongside CECA and the CPA.
“In the meantime, responsible contractors could ensure voluntarily all contracts from now are retention-less”
Among a slew of comments, one sentiment came up again and again: why the long wait?
“There is absolutely no good reason to wait seven years; we have all been waiting long enough,” one reader declared. “This could be embedded in legislation within two years and in the meantime, responsible contractors could ensure voluntarily all contracts from now are retention-less.”
Similar to Michael Conway’s suggestion on project bank comments, another comment proposed “putting retentions in trust first, on the way to a full ban”.
David Roberts went further, suggesting the retentions issue “is very easily fixed by replacing withheld sums with a bank guarantee or bond”.
‘Unprofessional, fatalistic and cynical’
This wider theme of broken processes, systems and business models has been front and centre of CN readers’ discussions.
On Wednesday reporter David Price used his Briefing to explore the pitfalls of contractors being listed companies, prompting one reader to question the government’s role in tackling industry failings.
“We have known for years that the big construction model is broken – a key question now is what is government going to do about it?” they asked.
“Dumping risk into the supply chain and not paying subcontractors for 120 days is unprofessional, fatalistic and cynical.”
“Even if it won’t help to fix perverse business models – and it certainly could – it must at least stop encouraging them. Government can help to save construction from itself with new procurement and payment legislation and rules.”
Mark Bull took the opportunity to get into the finer points of the industry’s typical business approach: “When will main contractors learn that if you do not price risk into a tender for fearing of losing it, risk still has to be costed into projected job margin?
“Moreover, dumping risk into the supply chain and not paying subcontractors for 120 days is unprofessional, fatalistic and cynical.”
There was, however, some support on show for contractors, with CN chief Tom Fitzpatrick’s editorial prompting one reader to call for more “respect [for] the vast majority of contractors who do know how to run their business”.
In a wide-ranging comment on the aftermath of Carillion’s collapse, the anonymous reader added: “Contractors are keen to expand their business and here is an opportunity for both new projects and new clients and to take on what is undoubtedly a good workforce and subcontractors, all of whom have all been very badly let down.”
And finally, in a rare break from the Carillion liquidation fallout, Briony Wickenden issued a call to action following claims of illegal welfare facilities on hundreds of sites.
“Shocking! Everyone has the right to be treated with dignity and respect in the workplace and those responsible for the lack of adequate and clean hygiene and welfare facilities should not go unpunished.
“Industry must address this very sad state of affairs if we are to retain and recruit the talent we need,” she said, flagging the Supply Chain School’s e-leaning tool for setting up sites that cater for all.