Tuesday, 16 January 2018

Money for nothing...

From the BBC:

Rudi Klein, head of Specialist Engineering Contractor, an umbrella group representing suppliers to the construction industry, said Carillion outsourced virtually all its work.

He said the government knew of Carillion's reliance on sub-contractors, but continued to award the company lucrative work despite growing concerns about its finances.

"It's that supply chain who is going to bear the massive loss," he said. "There could be a large number of firms that will experience substantial financial distress."

... and presumably their chicks for free, although that is not expressly stated.


Lola said...

There is absolutely nothing wrong with 'subcontracting'. Only in the diseased lefty BBC mindset is that a criticism. Every business outsources and subcontracts in some way. It is more efficient.

Mark Wadsworth said...

, that's not the point.

The question is, why can't the government just get Bob the Builder to do stuff and pay him?

Why pay Carilion to ask Bob, who then doesn't get paid?

Shiney said...


Wot @L said (its called trade when scaled up to the country level), and.....

Because the civil service wants to place an order for "1 x school" - which Bob can't supply. That then leaves all the nasty delivery-organisational stuff (which they are crap at) to other people. Not saying Carillion and their ilk are any better though.

Much better to actually not order the "1 x school" but let the private/third sector build them and give us all vouchers.

Lola said...

MW. Because Carilion is the 'organiser' and most main contractors do that a whole sight better than the government and bureaucrats ever will. You may know that my first career was in civil engineering and I have seen direct management of subbies, direct labour and main contractor managed work. On average the main contractor route works best in medium to large construction work. I also have a friend who is a small builder and he gets a lot of directly instructed work on small works like upgrading council houses for disabled occupancy. he is on their 'approved contractors list'. Mind you he says it is very lucrative work indeed. Nuff sed?

Mark Wadsworth said...

L, Sh.

Agreed. Local council should place order for 1 X school, preferably from a local-ish building company, keep tabs on progress and make sure little guys get paid.

But what the govt did was place order for 20 X schools from a bunch of fly by nights, who in turn asked 20 local builders to build one school each, who then didn't get paid, leaving the little guys hanging.

Lola said...

MW. That is exactly the case (para 2) because, as I said yesterday, Carilion was a 'fake' business.

Shiney said...


As @L said in the other post in response to @DBCR 'It's a 'crony-corporatist-proto-EU-ite'

Slightly off-topic - Interesting factoid alert....(The figures below all come from the latest published estimates ex Department for Business, Energy & Industrial Strategy)

Private sector businesses, as of the start of 2017, were estimated to be as follows:

7,300 large businesses, with 250 or more employees
34,000 medium-sized businesses, with 50 to 249 employees
1.3 million small employers, which had staff aside from the owners
4.3 million businesses which employed the business owners only

The total number of employments in small businesses, including the owners, was estimated at 12.8 million. This is more than the 10.6 million jobs provided by large businesses. There were an additional 3.3 million jobs in medium-sized businesses.

But the govt (and the EU) ignores small businesses because we don't so as we're told, can't lobby for bungs, oops contracts, and push back against their regulationism. Which is why you get omnishambles like Bank bailouts and Carillion.

Mark Wadsworth said...

L, ta.

Sh, it is easier for politicians to collect a few big bribes from the biggest businesses that to faff about collecting lots of small bribes from the small ones.

So JP Morgan can easily afford to pay Blair his dues at £0.5 million a year if they got what they asked for, but the NFSE would have to have a serious whip round and all members put a few £ in the collection tin to be able to match that - and then all the small businesses would have to agree on what they are paying for...

Lola said...

Shiney. Yeah. And we (I am one of the 1.3 million small businesses that employ people) in the vast majority voted for Brexit. I wonder why.

Shiney said...


I am involved in several SMEs, both in the manufacturing and services sectors. Pretty much all the SME owner-managers I come across just want the government out of the way.... and hence they nearly all voted or Brexit.

Apart from my business-partner who is a pinko-liberal of the first order and voted Remain (he won't mind me saying that as he wears it like a badge of honour) - mind you, he'll openly admit he voted that way out of naked self-interest rather than any high-minded ideal as he is as mistrustful of governments of all persuasion as I am.

Shiney said...


"the Local council should place order for 1 X school".... or indeed "1 x hospital" or "1 x bypass" or "1 x car park" why?

They don't order "1 x supermarket" and we all need to eat.

I guess that is another question ;-D which is waaaayyyy off this topic (dons steel helmet and waits for @DBCR to accuse me of being a Thatcherite... or something)

Mark Wadsworth said...

Sh, to build a school, hospital or car park, you need an acre or three of land and access to one road, the thing is otherwise independent of its surroundings, which is why there plenty of private schools, hospitals and car parks. They are an end in themselves as you can make money from these as stand-alones, that's all fine.

By-passes and (main) roads are another matter. There are no private by-passes or main roads of any import because they cross too many landowners' land, need compulsory purchase orders, planning permission, need to be interconnected in with other stuff and the overall local plan etc. They are not the actual "thing" or a source of income, they serve/benefit other areas/activities.

But you are drifting off-topic.

You started with the example of council ordering "1 x school". Which is fine. You wouldn't want one committee ordering holes to be dug, another committee to decide what kind of foundations to be poured, another civil servant to order concrete etc.

What is stupid, is the Dept of Education ordering "20 x schools" from some large company who is going to fuck thins up.

Mark Wadsworth said...

Sh re small v large business.

I observed at the time that the crony capitalists in the CBI were rooting for remain and the FSB was more for leave, the IoD of BCC, representing medium sized business were a bit more non-commital.

(although the boss of BCC gave a fairly pro-leave speech and was promptly sacked/suspended!)

Bayard said...

"But the govt (and the EU) ignores small businesses because we don't so as we're told, can't lobby for bungs, oops contracts, and push back against their regulationism."

Not only do they ignore small businesses, they pretend that they don't exist. "Businesses" to the government, are only large ones run by the likes of Richard Branson or Philip Green. The left wing happily go along with this myth, as the image of silk-hatted millionaire boss profiting from his low-paid cloth-capped workers suits their rhetoric so much better than the owner-operator working long hours on slender margins and even thinner profits.

Shiney said...


Yeah I apologised for the off-topic hijack.

"By-passes and (main) roads are another matter.....[snip]....They are not the actual "thing" or a source of income, they serve/benefit other areas/activities."

Yep - LVT can fix the funding but who does the work is the question I s'pose.

All this reminds me of the old Smith & Jones sketch https://www.youtube.com/watch?v=T8dB4YnLSsE

@B "the owner-operator working long hours on slender margins and even thinner profits" tell me about it... been there (still) doing that!

Mark Wadsworth said...

Sh, there are plenty of things where the government makes the decision what to build and then tenders it out to private sector. That's fine.

Mark Wadsworth said...

Sh, at the other extreme was the idea of privatising the land registry. That's shit.

Graeme said...

Off topic but I would be interested in an assessment of MIFID 2 and its likely impacts. Today I had to pass a test to assess whether I was knowledgeable enough to buy a "complex financial instrument" - shares in a long-standing investment trust.

Would a total novice enter into such a transaction on an online site without having done some study?

Is this to protect investors or crooked advisors?

Lola said...

Graeme. Mifid2 is a crock of shit. The regulations for it hace 1.4 million paragraphs. One outfit i work with had 60 out of their 70 software developers working on how to implement it in their business for a whole year. FYI if you carry out a financial transa tion with ne , buy an ISA say, we have record and report 65 bits of information about you to the regulators. Its crap.