PwC latest Big Four firm questioned over Carillion conflict of interest

PwC is the latest Big Four firm to be questioned by MPs over its involvement with both Carillion and the government in the run-up to the contractor’s collapse and its aftermath.

Following the release of the National Audit Office’s report on government’s handling of Carillion’s collapse MPs running the inquiry into the firm’s failure have written to both PwC, who are acting as special managers to the liquidation, and David Chapman, the Official Receiver, seeking to clarify any double dealing.

The NAO’s report revealed government appointed PwC on 17 September last year to advise on contingency planning and dealing with the consequences of Carillion’s potential insolvency at a final cost of £600,000. Four months later, and 11 days before it collapsed, Carillion also engaged PwC to carry out operational contingency planning for the firm’s failure.

The NAO’s investigation said the Cabinet Office then employed PwC to help carry out an options analysis at the beginning of January to decide whether to support Carillion.

Co-chairs of the inquiry Frank Field have sent letters hoping to get further details about both PwC’s involvement and costs associated with the liquidation.

Field, who chairs the work and pensions committee, said: “As Special Managers, with a contract to print money awarded without any competition, PwC will draw £50m for six months’ work. More money for PwC is less money for sub-contractors and the Pension Protection Fund.

“We have further questions about those payments and how PwC’s conflicts of interest arising from their long history of work on Carillion are being managed. We have written to PwC and the Official Receiver requesting further information.”

He said he was particularly concerned that PwC’s conflicts could jeopardise action against individual directors.

Meanwhile, Reeves described the Carillion saga as “the gift that kept on giving – for the Big Four”.

She said: “The dice are loaded in the Big Four’s favour. They make a killing in fees advising struggling companies how to turn them round and then they pocket millions tidying up when that advice fails.

“On Carillion, taxpayers are left to foot the multimillion pound bill for corporate failure. PwC, who profited from Carillion as it inched towards collapse, are expected to wring at least another £50m from its ruins as the government appointed Special Managers to the insolvency, while thousands of smaller creditors will get nothing at all.”