Carillion-hit M&E firm calls in administrators

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  1. If the construction industry practice was to have and use escrow accounts then perhaps the types of pack-of-cards collapses such as Carillion’s would not have such a knock-on affect. Secondly, businesses would have to budget and plan their cash-flow more carefully with their schedule of activities.

    However, I suspect that old Carillion was borrowing short-term and effectively lending (albeit to the government through those UK based PFI schemes) but this has not been stated anywhere. However, I cannot be certain of this; because many overseas challenges were also reported.

    So a second lesson is: that no business should be tempered in to large overseas programmes until they have developed the staff and the expertise to fully know the culture and business style where they plan to work. Very few advancing regimes and not every regime relies on advocacy as it is loved to be practised in the UK.

    Directors should not rely on their limited UK experience accordingly, especially when it is so often and so strongly based on either accountancy and contract law. Most places need much more than that and especially they require ‘dynamic application of technology’, where the local representative has full, yes full, control.

    Maybe Carillion tried to manage things from its UK Ivory Tower?

    The [clever] directors perhaps need to go back to business school and learn to stick to basic rules.

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