Carillion, support services provider to schools, to be investigated by Financial Conduct Authority

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Carillion, the global construction firm and provider of support services, is to be investigated by the Financial Conduct Authority.  The probe is connected to ‘timeliness and content of announcements’ the firm made from early December 2016 to July 2017, the Independent reports. 

As well as construction, Carillion provides support services and facilities management to 875 UK schools.   

It is also behind the Carillion Academies Trust which operates two brand new free schools in Tameside.  Trust accounts for year ending 31 August 2016 show the Trust wants to attract ‘schools to sponsor to create hubs of Academies’.  This will involve approaching good or better schools to build the Trust’s capacity to ‘offer school improvement’ to struggling schools.

Carillion Academy Trust had been given the go-ahead to sponsor the two Tameside schools in December 2013 before the Trust actually existed.    This appeared to break Department for Education rules that academy trusts needed to go through a formal procedure with the Education Secretary leading to Company House registration.

When Carillion’s financial problems became known last year, a local Tameside paper reported how Carillion’s survival was ‘crucial for Tameside’.     Carillion was Tameside Council’s ‘preferred developer’ with large building projects in the area.  It also provides school meals for ‘thousands of Tameside children’ and manages council owned properties and schools. 

Some of the schools, the Tameside Reporter said, depended on Carillion for post-construction remedial work.  And the school meals provided by Carillion cost 26p per unit more than the DfE allowed for them.  This meant schools had to pay the shortfall from their own budgets.

The paper reported concerns of Tory leader John Bell about Tameside Council’s relationship with Carillion.  He said the contract couldn’t be monitored because there was no ‘scrutiny committee holding it to account’.   He told the paper:

 ‘Where is the accountability? We are including the back bench Labour councillors here, they do not know anything (more than the opposition).  Due to the lack of lack of transparency we get to know nothing.’

Carillion’s woes don’t just affect Thameside.  It provides services to schools in other local authorities.  It is the ‘largest provider of facilities management to the MOD’ and has a ‘significant presence’ in healthcare.  It's also one of the companies chosen to build the HS2 railway.  The contract for HS2 was agreed despite the Government knowing about Carillion's financial troubles.  

It’s to be hoped that the Government has contingency plans in place should Carillion collapse.

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