After Carillion – Interserve. Will it go under – and if it does, who’s next?
It seems Interserve is about to go the same way as Carillion.
If it does, the Conservative government will force the public to pay the costs again, even though they’re the ones who stupidly employed greedy private contractors who put our money in their bank accounts rather than investing it in the public services they are supposed to be providing (at least, that’s the Carillion model).
I hope that Interserve doesn’t go under, but it occurs to me that any private firm with a contract to provide public services will be in breach of that contract if it ends up in receivership due to poor financial management.
So it should be the government’s responsibility to get our money back from these people, rather than charging the public.
It might be easy to force the poor to cough up for the mistakes of the rich, but it isn’t justice.
Let’s have some justice for a change.
It appears the Tory Government could once again be stretching its pan-palms out to catch the overspill from the potential collapse of another favoured private contractor, Interserve.
Interserve’s debt almost doubled from £274m in 2016 to £513m at the end of 2017. An underestimation of the costs involved in a public-private partnership contract to provide waste-to-energy services, which saw the corporation raise its provision on one such project in Glasgow from £70m to £195m, has badly affected it.
And in further deeply worrying news, the corporation’s share price has plummeted from 717p in 2014 to just 63p in December, leading to serious discussions with its lenders over the firm’s remaining financial options.
Although the corporation issued profit warnings in September and October 2017, it has announced that it reportedly expects that its 2017 performance was in line with expectations. This, along with the partial recovery in its share price might be due to the fact that the corporation’s new chief executive announced cost cutting measures: £15m in 2018 to £50m by 2020.
With the corporation employing 80,000 people worldwide – 25,000 in the UK – and when it is responsible for public contracts including cleaning, healthcare, security, probation and construction, one wonders what cost-cutting measures will actually involve and how these might impact the provision of essential public services.
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The next to go under will be the Conservative government
It has taken a long time, but the nasty Tory policies of privatisation (or enriching themselves at taxpayers’ expense) are at last unravelling.
Interserve, as Carillion, tender at break even or below contract value to obtain government contracts. Their size and resources pushes out all but the big players from the tender process.The logic being that they can make the money and more up in ‘added value’. This also artificially boosts shareholder value. This means extortionate charges for anything that falls outside the scope of the contract. What they are now suffering is the cascade effect and loss of AV because of cost cutting by the Tories double edged sword. In other words they must fulfill their contracts for the price quoted, not possible. Collapse results in fertile ground for acquisitions and takeover, boosting the fickle FT 100, notice the correlation! 7000 + and climbing, a barometer of doom, not sucess. Expect a lot more liquidations before the year end.
After Carillion – Interserve. Will it go under – and if it does, who’s next?
ATOS, G4S, Capita, Maximus – I hope
DAMN!! I wish I had the money on that!
What a Goddam Mess.
And this after the Crash, Austerity, Cuts in Public Services risking lives and govt again telling local govts they have to cut cut cut til it squeaks and bleeds.
I do believe that a few years ago after market and corporates kept boom and crashing they asked Where can we get a steady reliable flow of money to cover our loses and risks, and I think some bright spark looked at public services, govt taxes and welfare state funds and reserves and said Lets Go There. We will secure ourselves and we will be forever Cushty.
I hope somebody bloody wakes up.