MPs accuse big four accountancy firms of opportunistic attacks on Carillion “carcass”
PUBLISHED: 08:36 13 February 2018 | UPDATED: 08:36 13 February 2018
Britain’s biggest accountancy firms have been accused of “feasting on the carcass” of collapsed outsourcing giant Carillion – and collecting more than £70m in the process.
MPs from the business and pensions committees, who are conducting a joint inquiry into the group’s downfall, have published a breakdown of fees collected by KPMG, PwC, Deloitte and EY.
It shows the professional services firms have picked up £71.6m in Carillion-related work since 2008, including on its pension schemes.
Veteran Labour MP Frank Field, head of the work and pensions committee, said: “The image of these companies feasting on what was soon to become a carcass will not be lost on decent citizens.
“The former directors of Carillion are, unlike their pensioners, suppliers and employees, alright.
“These figures show that, as ever, the Big Four are alright too. All of them did extensive – and expensive – work for Carillion.”
PwC, which is handling the liquidation process, comes in for particular criticism, with Mr Field accusing the company of playing “all three sides” – the company, pension schemes and government – to the tune of £21m. It has also been appointed as special manager of what is left of Carillion.
He said: “It was perhaps telling that, with their three fellow oligarchs conflicted, PwC were appointed to this lucrative position without any competition.”
According to information published by the committees, KPMG has banked £20.2m in fees since 2008, PwC £21.1m, Deloitte £12m and EY £18.3m.
Carillion’s liquidation last month left in its wake a £900m debt pile, a £590m pension deficit, and hundreds of millions of pounds in unfinished public contracts.
A total of 989 jobs have been lost since, with 6,668 saved out of the previous directly-employed workforce of 18,000.
The role of auditors has come under the spotlight, with questions asked about why problems at the firm were not spotted sooner.
The accountancy watchdog has gone as far as to open an investigation into KPMG over its audits of Carillion under the Audit Enforcement Procedure.
The probe will cover the years ended 2014, 2015 and 2016, and additional audit work carried out during 2017.
Representatives from KPMG will appear before MPs next week to answer questions over its role.
A KPMG spokeswoman added: “We take the questions that have been asked of our profession in recent weeks very seriously and we welcome the opportunity to appear before the joint committee.”
If you value what this story gives you, please consider supporting the Eastern Daily Press. Click the link in the yellow box below for details.