Greg Clark faced MPs鈥� questions about retentions and 120-day payment periods that left suppliers exposed
Business secretary Greg Clark has been forced to defend the goverment鈥檚 failure to protect the supply chain in the wake of Carillion鈥檚 collapse.
While refusing to be drawn on past policy decisions, he conceded there were a number of lessons to be learnt from the construction conglomerate鈥檚 failure.
Speaking in parliament yesterday Clarke said: 鈥淩etentions and project bank accounts have been the subject, in response to those and other concerns, of a consultation on specific measures, which closed very recently. That came out of the recommendations that were made.
鈥淭he lessons and the scrutiny of what went wrong in Carillion, both on the part of its directors and its scrutineers, and in the oversight that took place across the whole of the public sector in terms of contracting, need to be looked at and will be looked at, including by select committees of this house. Whatever actions are required from that, we will take.鈥�
The lessons and the scrutiny of what went wrong in Carillion, on the part of its directors and its scrutineers, and in the oversight that took place across the whole of the public sector in terms of contracting, need to be looked at
Greg Clark
His comments came in response to questions from Labour MP Rebecca Long Bailey about what action government had taken on information provided by the Federation of Small Businesses (FSB) and the Specialist Engineering Contractors (SEC) Group last year that highlighted Carillion鈥檚 problematic payment practices.
She said: 鈥淭hey (the FSB) highlighted that Carillion鈥檚 payment period was doubled from 65 to 120 days, that Carillion made money on the back of early payment by charging fees, and that regulation 113 of the Public Contracts Regulations 2015, which relates to 30-day payment, was not being enforced.鈥�
Long Bailey went on to say it was clear government had taken no action in relation to Carillion鈥檚 failure to comply with prompt payment standards.
She said: 鈥淭hat is not all: the FSB and SEC Group also highlighted how retention moneys and project funds due to suppliers were not being protected from Carillion鈥檚 potential insolvency.
鈥淎s a result of the Government鈥檚 inaction, microbusinesses are now owed on average 拢98,000, small firms 拢141,000 and medium-sized firms 拢236,000, and large businesses are owed on average 拢15.6m.鈥�
Carillion executives including former chief executive Richard Howson, chairman Phillip Green and ex-financial director Richard Adam are due to be questioned by MPs next week.
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