End outsourcing


RMT calls for end to outsourcing, franchising and privatisation following chaotic collapse of Carillion

The union has called for all rail contracts affected by the collapse of the outsourcing and construction company Carillion to be taken in-house immediately.

Only Carillion workers on what the government defines as its 450 public sector contracts will be guaranteed their wages.

However the future of the other 90 per cent of outsourced contracts, agency work and the supply chain is unclear and liquidators PricewaterhouseCoopers (PwC) have confirmed that the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) will not apply to them.

A PwC letter, said: “In this situation staff will not automatically transfer under TUPE because a winding up order has been made against each of the Carillion companies.”

This means that staff can be transferred to different private companies on inferior rates of pay and poorer conditions.

RMT general secretary Mick Cash said that clearly anyone working in the rail sector was providing a service to the public and called on the government to confirm that members would continue to be paid with their functions taken directly in house.

“The government has known for months that Carillion were in trouble and they should have had plans well in hand for just this situation.

“All of the Carillion rail works on the various contracts can be brought ‎in-house easily and that is what we expect to happen with jobs and services protected.

“If there is limitless amounts of cash to bail out rail franchises like Southern and East Coast there should be no penny pinching when it comes to workers caught in the crossfire of the Carillion collapse,” he said.

Carillion has also been trying to “wriggle out” of its pension obligations for a decade while paying out tens of millions in dividends for shareholders and “handsome pay packets” for bosses.

Reports that Interserve, another massive outsourcing outfit where RMT has members, is also now coming under scrutiny.

“We warned that the chaotic collapse of Carillion could spark off a domino effect amongst these high risk businesses and we stand by that.

“The forensic investigation we have been promised into Carillion needs to be extended in scope to include the whole murky world of outsourcing, franchising and privatisation.

“It also needs to include those politicians who have promoted and encouraged the pillaging of our public services by these get-rich-quick merchants despite repeated warnings from the trade unions.

“Anyone with their dabs on this growing scandal must be sent the clear message that there’s nowhere to run and nowhere to hide,” he said.

Carillion’s liquidation last month has left hundreds of millions of pounds’ worth of unfinished public contracts but it is even unlikely that there is enough assets to meet even the cost of winding up the company, according to Sarah Albon, the chief executive of the Insolvency Service.

The group collapsed with £29 million in the bank, a £1.3 billion debt pile and a pension deficit of close to £1 billion.

Ms Albon told MPs that Carillion was made up of 326 companies, 199 of them in the UK, with 169 directors. She said that the Insolvency Service’s investigations normally took 21 months and it was putting “considerable resource” into the Carillion inquiry.

“One significant constraint is the incredibly poor standard of the company’s own record-keeping. It took some hours to identify how many directors we could potentially be targeting,” she said.

RMT has also called on London Mayor Sadiq Khan to bring Carillion’s London rail contract work into direct public ownership through Transport for London with guaranteed protection for the workforce, their jobs, pay, conditions and their pensions.

Staff working on the Carillion contracts carry out a range of safety critical signalling, power, maintenance, cleaning and track works on Crossrail, the East London Line extension, Heathrow Express and London Overground.

The union has urged Sadiq Khan to take the Carillion London rail operations into public ownership with jobs, pensions and the essential safety-critical work protected.

“When Metronet collapsed on London Underground immediate moves were made to maintain the functions under public ownership to ensure safety and continuity.

“The Carillion situation is no different and RMT is seeking to move this forward as a matter of urgency,” Mick Cash said.

Britain’s four biggest accountancy companies are also facing fresh scrutiny, with the head of the industry watchdog calling for the competition regulator to investigate their auditing activities following the collapse of Carillion.

Frank Field, Labour MP and chair of the work and pensions select committee, has asked whether KPMG, Deloitte, EY and PwC should be broken up.

He noted that two of Carillion’s recent finance directors had previously worked for KPMG and it had audited Carillion’s accounts for the past 19 years.

“They are all mates, aren’t they?” he said.