The government should have pumped money into Carillion to keep it afloat, the firm’s former chief executive has told a parliamentary inquiry.
Keith Cochrane told MPs he was disappointed and surprised that the government did not agree to provide a £20M “short term loan” to help with a restructuring plan.
He said the loan would have been a better outcome for the taxpayer than the construction giant being forced into liquidation.
Cochrane said: “As we analysed the potential ramifications of a liquidation scenario, we believed, and I continue to believe, the cost outcome to the taxpayer would have been less if government were willing to support”.
In a plan presented to government on 13 January, Carillion proposed that banks and government loaned £10M each for the first week of a restructuring plan, followed by a progress review and a further £10M loan each in week two.
Cochrane said: “[The] logical outcome was, just as we see in many other instances, that the major customer would participate in a process of supporting a business, given the potential downsides which we have regrettably seen play through”
“We believed there was a logical case [for government financial support]. I’m still somewhat perplexed that they weren’t able to give us that support,” Cochrane added, “I felt quite confident that they would support us.”
Cochrane was questioned by the public accounts committee and the public administration and constitutional affairs committee alongside his predecessor Richard Howson, former finance director Emma Mercer, and former chairman Philip Green.
Mercer was dubbed a “whistle blower” by another parliamentary inquiry, being undertaken by the work and pensions committee and the business committee, after it emerged that she raised concerns about issues in Carillion’s accounts in April.