Pensions

MPs accuse the UK’s biggest four accountancy firms of taking advantage of Carillion’s collapse

Carillion evaded pension

MPs from the business and pensions committees have accused the UK’s biggest four accountancy firms of taking advantage of Carillion’s collapse and collecting more than £70m

The UK’s biggest accountancy firms have been accused of taking advantage of the collapsed outsourcing giant Carillion. MPs have accused the country’s biggest four accountancy firms of being opportunistic and collecting more than £70m. MPs from the business and pensions committees, who are conducting a joint inquiry into the group’s downfall, have published a breakdown of fees collected by KPMG, PwC, Deloitte and EY, which shows that KPMG has banked £20.2m in fees since 2008, PwC £21.1m, Deloitte £12m and EY £18.3m. It shows the professional services firms have picked up £71.6m in Carillion-related work since 2008, including on its pension schemes.

Head of the work and pensions committee, veteran Labour MP Frank Field said that the image of these companies feasting on what was soon to become a carcass will not be lost on decent citizens. The former directors of Carillion are, unlike their pensioners, suppliers and employees, alright. These figures show that, as ever, the Big Four are alright too. All of them did extensive and expensive work for Carillion.

He particularly criticised PwC, which is handling the liquidation process, as he accused the company of playing the company, pension schemes and government to the tune of £21m. It has also been appointed as special manager of what is left of Carillion. He added that it was perhaps telling that, with their three fellow oligarchs conflicted, PwC were appointed to this lucrative position without any competition.

Carillion’s liquidation last month left £900m in debt, a £590m pension deficit, and hundreds of millions of pounds in unfinished public contracts.

The role of auditors has come under question as to how the problems at the firm were not spotted earlier.

The accountancy watchdog has even opened an investigation into KPMG over its audits of Carillion under the Audit Enforcement Procedure, which will cover the audit work done in the years ending 2015, 2015 and 2016 as well as additional audit work carried out during 2017.

Representatives from KPMG will appear before MPs next week to answer questions over its role. A KPMG spokeswoman added that it takes the questions that have been asked of its profession in recent weeks very seriously and it welcomes the opportunity to appear before the joint committee.

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