By Charlotte Green, Local Democracy Reporter
TRADE union Unite has called on the Government to carry out a full public inquiry after it was revealed the demise of Carillion has cost Tameside Council millions and thrown a string of vital projects into limbo.
An investigation by the local democracy reporting service revealed that the scandal has endangered plans to refurbish playgrounds, an indoor market, leisure facilities, CCTV system, and a proposed new children’s home.
In total 18 projects were thrown in jeopardy after the town hall was forced to shell out £9.4 million in extra costs to complete construction on a new council headquarters and college building in Ashton, which had been left half built by Carillion.
The extra costs means the council has had to “re-prioritise their plans for future investment and regeneration”.
And on top of that bill, the authority is also on the hook to pay around £1m to liquidators PricewaterhouseCoopers for continuing to provide school services in the aftermath of the company going bust.
Unite assistant general secretary Gail Cartmail said other local authorities were facing similar choices after being left in the lurch by Carillion.
“The collapse of Carillion is nothing short of a national disaster.
“The havoc left in its wake at Tameside – with a host of vital public services and projects now facing the axe and the council forced to fork out millions of pounds – is being replayed up and down the country,” she said.
“Taxpayers, workers and service users – in other words regular working people – are the ones paying the price for the government’s obsession with doling out public contracts to privateers who are more interested in filling their pockets than doing their jobs.
“Greed was what motivated Carillion’s board and it was greed that brought the whole sorry fiasco crashing down on everybody else’s heads.”
Calling for a public inquiry and criminal investigations “at the very least”, Cartmail said that if what happened at Carillion “wasn’t illegal it should be”.
She added: “But unfortunately we can’t expect the Tories to learn any lessons from Carillion when bandit capitalism is their modus operandi.”
Tameside’s MPs have backed the town hall’s handling of the Carillion crisis – but say lessons need to be learnt about the dangers of outsourcing.
All three Labour members have called on the government to do more to help town halls affected by the fiasco.
Denton and Reddish MP Andrew Gywnne said he believed the Government could have stepped in earlier to offer support.
“The liquidation of Carillion was a national issue that affected local authorities across the country and was beyond the control of Tameside Council,” he said.
“I believe the government could have stepped in earlier to help prevent Carillion’s collapse and to do much more to support local authorities and other public bodies, like the NHS, in tackling the difficulties caused.
“Tameside Council acted swiftly and appropriately to save their public sector projects unlike similar projects across the country which are now either on hold or reporting delays of up to two years or more.
“I believe the Council releasing extra funding to complete the work was the appropriate action to take as it has secured work for the local supply chain and not finishing it would have wasted the significant amount of money and work already invested.”
He added: “But let me be clear; lessons must be learnt from this national debacle and as Labour’s shadow secretary of state for local government, we are committed to ending the outsourcing of local services and council functions and we will call an end on the scandalous privateering we’ve seen in recent years.”
Jonathan Reynolds, MP for Stalybridge and Hyde, said: “The collapse of Carillion has had a nationwide impact but Tameside council have done a good job in difficult circumstances to deal with the fallout from it.
“Where the private sector is providing a service, they should shoulder the risk of fulfilling that contract. It is simply not right that if they make money, they keep it, but if they go under then the public are expected to step in and take on the burden.
“Councils do sometimes need to bring in outside expertise, but there are lessons from Carillion that both central and local government need to learn from.”
Angela Rayner MP, who represents Ashton, Droylsden and Failsworth, said: “The collapse of Carillion has affected communities up and down the country, and Tameside is no exception.
“While ministers sit on their hands, hard-pressed councils are being forced to pick up the pieces.
“It’s totally unacceptable and underlines how the Tories’ outsourcing model is broken beyond repair.
“Labour would fix this failed approach to outsourcing by bringing contracts back in-house and protecting our public services.”
A Cabinet Office spokesperson said: “Following the collapse of Carillion our priority was ensuring that public services continued to run smoothly and safely.
“Our plans enabled local authorities, including Tameside, to transfer services to new providers at their own discretion, with many doing so smoothly.”