Paper round: 'damning day for industry'

Builders accused of price fixing

The Financial Times focuses on the impact potential punishments will have on the businesses involved, saying lawyers predict fines resulting from the OFT inquiry “will be in the tens of millions.” The paper also quotes Sir Simon Milton, chairman of the Local Government Association, saying “there are no excuses for collusion, bid rigging or cover pricing, which leaves the public and councils to pick up the tab.”

Fines could be the least of the worries for wrongdoers

The FT also says that although the level of the penalties “will depend partly on the attitude taken by the OFT”, many companies are risking exposure to other lines of legal or commercial attack, with the biggest potential worry for companies that they will be excluded from contract tender lists by authorities sensitive to the accusation that they have wasted taxpayers’ money.

Town halls accused of colluding in bid-rigging by building firms

The Times shifts the blame for the investigation partly away from contractors, reporting that local authorities have been colluding with builders in the bid rigging of construction projects to make it appear as if proper competition has taken place. The paper quotes Mark Denman, of T Denman & Sons – one of the contractors named in the inquiry - saying: “Clients, including those in the public sector, have been known to specifically request a cover price where their initial inquiries had produced sufficient response, in their own attempt to show competition.” The paper also quotes Stephen Ratcliffe.

Builders ‘conspired to rig their prices’

The Daily Mail said yesterday was a “damning day” for the industry. It reported that builders could be fined up to 10 per cent of their “annual sales” – the OFT will actually fine up to 10% of turnover. The Association for Public Service Excellence, the Local Government Association and the Liberal Democrats lined up to express their shock at the accusations and the cost to the public purse. Balfour Beatty and Carillion were quoted.

Can we price-fix it? Yes we can

With characteristic restraint, The Sun reported that UK construction firms have been accused of “ripping off taxpayers” in a “price-fixing scandal”. It reported suggestions of possible criminal charges, though the OFT has said publicly that it will be pursuing its inquiry as a civil investigation. Alan Ritchie and Stephen Ratcliffe were quoted.

Construction firms rigged bids, watchdog claims

The Guardian reports the story fairly straight, quoting sources suggesting the final tally of fines would run into “tens of millions of pounds”. Stephen Ratcliffe, Balfour Beatty, Kier and Carillion are all quoted alongside the LGA chairman Sir Simon Milton.

The builder’s bill

The Guardian’s leader says the OFT report makes “shocking reading”, going on to make a fairly devastating attack on Balfour Beatty. It reads: “Firms such as Balfour Beatty have grown fat on the sums poured by the state into public infrastructure. Its name pops up everywhere.” The government has had a “misplaced faith” in the efficiency of private contractors, it says. “Cash has been wasted”.

Building firms could be fined billions over bid rigging

The Independent put a rough figure on the total fines that could be levied by the OFT – the “billions” in the headline – and also on the losses to the taxpayer, which it estimates at £300m. The Construction Confederation and DBERR are quoted, alongside the ubiquitous Sir Simon Milton.

Builders in £300m price-fix probe

The taxpayer is the victim in all this, said the Daily Telegraph. “The alleged scam could have cost councils, NHS trusts and education authorities more than £300m,” it reported. Its coverage handily includes a cut-out-and-keep guide to cover pricing. Matthew Elliot of the Taxpayers Alliance said the idea that “ordinary people” have been defrauded is “sickening”. Simon Milton, Alan Ritchie, Balfour Beatty, and Galliford Try are all quoted.

Cartels for dummies: A simple lesson from the OFT

Andrew Hill, writing in the FT’s Lombard column, claims that “publicising the OFT’s findings is the best way to teach the wrongdoers a simple lesson.” Hill defends the OFT for carrying out a lengthy investigation, saying “critics should ask themselves whether they would rather answer allegations that are the fruit of a thorough probe or a cursory one.”