Carillion’s collapse: risk and failure

The liquidation of the construction group Carillion this week will be felt beyond Britain. It raises questions over outsourcing, ‘dumb German money’, governance and auditing. What signs were missed? Here’s the best of our comment and analysis

© Sarah Tanat-Jones

German banks are facing big losses as a result of the outsourcing company’s collapse

The directors ticked all the good governance boxes, yet the contractor still collapsed

Government contractors, like banks, need a clear resolution regime

Contracting out public services works better in some sectors than in others  

Too much crucial information remained buried and was missed for too long

More from this Series

The German loan market should use the UK group’s failure as a chance to tighten up

The failure of the construction company indicates there was no viable business to sell

UK group took on too much debt, mis-priced some contracts and ran into problems

Problems with PFI are no reason to kill off private sector provision in the UK

Letter from Stephen Kingsley, London, UK

Letter from Bruce Mathers, Zug, Switzerland

Letter from Peter Cave, London, UK

Letter from Mark Bull, Winchester, Hampshire, UK