It’s ordinary people who will suffer from the collapse of Carillion

The collapse of Carillion would be funny if it wasn't so tragic. It would be funny because Carillion collapsed under a debt mountain of £1.5 billion, after issuing several profit warnings, and despite having a portfolio of construction projects (such as the rebuilding of Battersea Power Station) and outsourced UK government contracts (such as managing 50,000 homes for the MOD and nearly 900 schools).

This is funny because Carillion exists only to make money, and yet failed because it couldn't make money. Carillion held so many public sector contracts (not just what I’ve mentioned above but also prisons, highways, the construction of Crossrail and a stake in HS2) because it was supposed to be better than the public sector. Well, it wasn’t.

The need to make a profit, which drives private companies like Carillion, is supposed to make them more efficient at delivering these projects than the public sector. At least, that is what neoliberals from Thatcher to May, via Blair and Brown, would have us believe.

The efficiency of these private companies, pumped full of public money, was supposed to make the provision of infrastructure and government services better for everyone. Now we’re left with a huge pile of debt and more than a few holes in the ground.

Outsourcing failure

Instead, Carillion turned out to be very inefficient at making profits and delivering infrastructure projects. Projects overran from Liverpool to Sandwell. The company fell into debt and ultimately failed. If you can't make profit, Carillion, then what is the point of you?

The craze for outsourcing still has its defenders despite three decades of failure. The railways aren't the paragon of cheap, sleek and well-invested services, like their state-owned counterparts in other European countries. Electricity and water are more expensive and invest less than they did when they were state owned. Even so, outsourcing fundamentalists insist that this is what’s best for all of us.

It's laughable that anyone still thinks that outsourcing and privatisation are efficient ways to run any kind of public works program, or indeed anything at all following the catalogue of failures of these policies. We aren't living in the shareholder democracy we were promised by Margaret Thatcher's government.

Human cost

Of course, this actually isn't funny. Carillion employs 43,000 people worldwide, with 20,000 in the UK. These people rely on their employer not just for their income, but for stability in their lives. So far it has been announced that 377 people have been made redundant, and 919 jobs have been saved by transferring them to other employers. However, over 18,000 jobs are still on the line. There is also a range of other companies, large and small, that supply Carillion and rely upon it to stay afloat. There will be job losses up and down the country because of this.

The Carillon story is made up of so many large things - £1.5 billion in debt, huge construction projects like the Aberdeen bypass - that it's easy to forget at the heart of it is ordinary people's lives. People who work, earn money, pay their rent, and save for their children's future. The world is filled with enough uncertainty and fear without your employer suddenly collapsing. We need to remember that ordinary people are suffering because of this huge fuck up.

Ordinary people who live paycheck to paycheck - no different from you or me. They don't have the resources to draw on that directors of multinational construction companies have or those who created this culture of outsourcing. Many Britons live a precarious existence, with 8 million people just one paycheck away from homelessness. This will cause massive suffering for individuals that will be overlooked in story about massive debt and huge construction projects.

The human cost of the Carillion fuck up is depressing. We need to remember that it's ordinary people who suffer when large companies fail. Outsourcing maybe be comically bad, but what's happening for the many people who depended on Carillion for their livelihood isn't funny.

Crane image created by Veggiefrog and used under creative commons.