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Mike Smith, managing director, Corniche Builders (Member of CM reader panel)
“With costs rising across the board, not just in construction, client budgets are tightening and expectations aren’t falling. Other sectors such as finance have responded with increasing automation and digitisation to protect profit margins, construction firms have broadly failed to do this and now this failure is showing itself.
For some years now there has been an acknowledgement that those contractors who digitise most successfully will realise a significant business advantage over those who don’t. But instead of a genuine and competitive R&D race to be the best we’ve seen a somewhat cynical approach to digitisation where saying the right thing is, unfortunately, more important than actually doing the right thing.
Carillion has some truly excellent individuals from the digital construction scene at their disposal, but it seems the top table didn’t commit to finding digital efficiencies quickly enough as part of their strategy to keep profits ahead of costs.
Among the scant silver linings of this catastrophe, perhaps a renewed vigour for digitisation to create the 21st-century contractors our country needs might just emerge.”
John Adams, Director, BIM Strategy (member of CM reader panel)
“The win contracts ‘at all cost’ mentality leads to an outcome that is to everyone’s cost.
Jeff Edgar
“Recent events such as Grenfell Tower and now the Carillion collapse highlight that private sector outsourcing is not working, either in value for money or quality.”
Tony Butcher
“My company was in Carillion’s supply chain for 15 years before deciding to stop working for them in 2010. At that time they were insisting on payment terms of 90 days plus, but they never made payment in less than 120 days.
To work with Carillion on one of their frameworks required significant investment and we spent thousands of pounds annually to retain access to that opportunity – but despite always meeting ever shortening tender periods and submitting fully compliant bids, we were frequently passed over for one of the top five consultancies.
We decided they were a poor client, and it is of no surprise that ‘over trading’ and the disconnect between executive and operational management has led to their demise. The only real surprise is that this didn’t occur earlier.”
Brian Impey, director of the Acorn Multi Academy Trust (Member of CM reader panel)
“It is devastating for the many SMEs caught up in this. The building industry is riddled with these collapses, though not on this scale, and suppliers are caught up in company failures due to the payment mechanism employed by the main contractors.
Clients need to become accountable for the supply chain they employ both directly and indirectly, including more transparent and prompt payment.”
Duncan Town, director, Alexander Consulting (Member of CM reader panel)
“Procurement professionals have concentrated on bundling work into larger packages for longer periods that effectively exclude most smaller businesses. This has allowed the likes of Carillion to dominate the market, and now led to this catastrophic collapse.”
Brian Jukes
