London — The collapse of Carillion exposed the risks of using private companies to cut the cost of delivering public services and its failure could be repeated if the government does not learn lessons, legislators said on Monday. Carillion, which employed 43,000 people to provide services in defence, education, health and transport, collapsed in January, becoming the largest construction bankruptcy in UK history. It left creditors and the firm’s pensioners facing steep losses and put thousands of jobs at risk. A report published by a parliamentary committee on Monday said the government’s overriding priority for outsourcing had been spending as little money as possible while forcing contractors to take unacceptable levels of financial risks. It said the preoccupation with costs had hit the quality of public services because the outsourcing companies were sent a clear signal that cost, rather than quality, was the government’s consistent priority.
Bernard Jenkin, chairman of th...
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