Once proud in construction, you are now the largest UK corporate failure in today’s public service outsourcing market. And there are others knocking on that door, not least Four Seasons, desperate to restructure and which looks after 17,000 vulnerable and elderly adults.
Is anyone up for a mutual solution?
We know from our research that often businesses fail from the top, but the expertise and the knowledge to make a success is in fact in the workforce. In a number of countries, such as Spain, this has prompted a careful and well thought through programme to save jobs through worker ownership.
With Carillion, the work is so much project-based that there would be a natural team for many service contracts that could form the basis of an employee-owned worker co-operative. This could offer public sector contractors an alternative to bringing services in-house, though of course that’s possible, or to retendering anew, or worse a shotgun contract let on poor terms to Carillion’s competitors.
Of course, there are also subcontractor affected, with the option that they could form a co-operative consortium to take on the contract with former Carillion staff at the core. In ways, Carillion – with its array of contracts, sub-contracts and debt now evaporated – was a somewhat dysfunctional conduit for small businesses to participate in public sector contracts. Co-operative consortia, without the dividends, exec pay, low-balling or black listing, and with values closer to those of public services, could be a more functional replacement.
The UK insolvency procedure doesn’t encourage these kinds of approach. Workers are assumed to be creditors, waiting for and their position in the pecking order, unless the business itself can be taken forward and staff kept on. But there is sense in it. Insolvency law is not in itself a bar, although of course this adds a degree of complexity.
What is needed is a regulatory pathway, where Central Government, which after all has done work for many years on public service mutuals, creates a route that the administrator, public sector commissioners and Carillion’s local project staff can use to work together to explore delivery of the same contract, or adapted where needed, through the formation of worker co-ops.
Jumping from projects in a giant corporate to a values-based worker co-operative is not just a technical and legal transition but a cultural shift, so it is one that the wider co-operative and employee owned world needs to come together to support, bringing to life the extraordinary potential of worker ownership. We’d have to step up as an proactive partner.
I’d welcome your comments and suggestions on this.
Perhaps something good could yet come of this extraordinary market failure.