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Carillion issued 3 profit warnings. So why was it still getting government contracts?

The government should have been wary of Carillion as far back as July.

Carillion, one of the UK government’s biggest contractors, with public sector contracts that deliver services across numerous government departments including defence, transport health and education, has collapsed.

This is potentially catastrophic, not least for the provision of vital public services. It also risks the jobs of more than 20,000 UK employees, hundreds of subcontractors and supply chain businesses and the interests of those who rely on Carillion’s pension fund.

What is most alarming however, is that Carillion had issued three profit warnings over the last six months. Yet following these, the government awarded nearly £2bn worth of additional public sector contracts to Carillion.

Worse still, is that pursuant to the government’s “Strategic Risk Management Policy”, it is government policy to designate a company as “High Risk” where profit warnings and/or various other risk factors are uncovered. The policy further states that firstly, if a company is deemed “High Risk”, a Crown representative should be appointed to manage relationships between the ailing company and government. In addition to this, all government departments should be advised to ”reduce where possible” any additional work to be procured.

So how did this apply to Carillion? The first profit warning was issued in July 2017. A week later the government awarded Carillion the prestigious HS2 contract totalling £1.4bn and Hestia defence contracts totalling £158m.

The second profit warning was issued in September 2017. Yet as of that point, no Crown representative had been appointed in line with government policy. Furthermore, in November, the government-owned Network Rail awarded Carillion the contract for the London to Corby electrification, worth £62m. The third profit warning was the same month.

Why did the government fail to act when not one, but three profit warnings, had been issued? And why did it continue to award expensive public sector contracts to a company that was clearly in trouble?

Despite only reacting at the eleventh hour, the government must now move quickly.

We have called repeatedly over recent days for Carillion’s public sector contracts to be brought back in-house where possible. Doing this will ensure stability, delivery of public services and to ensure employees, supply chain companies and pension fund members are protected.

But this crisis raises larger issues. The Conservatives’ approach to outsourcing and privatisation is clearly undermining our public services. Awarding so many vital contracts to one single company has exposed public services, jobs, supply chain businesses, pension funds and the British taxpayer to an enormous amount of risk.

Labour’s manifesto pledges to ensure that any company procuring government services complies with a range of standards, ranging from full payment of suppliers within 30 days to full trade union recognition.

Under these rules, Carillion would not have been awarded these contracts.

Carillion supplier payment policy ranges from payments in advance to 120 days from month end. It was one of the eight multinational building contractors which played a role into the insidious practice of blacklisting of union members in the construction industry.

The crisis at Carillion raises deep concerns about the future security of infrastructure and capital projects. This is why Labour has pledged to end the rip off of taxpayers by committing to sign no new Private Finance Initiative (PFI) deals, looking at bringing existing contracts back in-house and developing alternative public sector models for funding infrastructure.

It is clear therefore that a full investigation is now required. This should be not only into the conduct of the government over the Carillion crisis, but also the viability of the government’s approach to public procurement overall.

 

Rebecca Long Bailey is shadow exchequer secretary and Labour MP for Salford and Eccles. 

The University Challenge final. Photo: BBC iPlayer
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Why University Challenge is deliberately asking more questions about women

Question setters and contestants on how the show finally began to gender-balance its questions – and whether it’s now harder as a result.

University Challenge has long had a gender problem. When the show first started airing in 1962, some Oxbridge colleges were still refusing to admit women as undergraduates; in the decades since, women have been consistently outnumbered by men, with all-male teams still a regular occurrence. Those women that did appear were all too regularly criticised and objectified in equal measure by audiences: notable contestants like Hannah Rose Woods, Emma Johnson, Samantha Buzzard and Sophie Rudd have experienced intense media scrutiny and criticised the sexism of the show and audiences. In recent years, sexism rows have dogged the show.

How satisfying, then, to see two women carrying their teams in last night’s final: Rosie McKeown for winners St John’s, Cambridge, and Leonie Woodland for runners-up Merton, Oxford. Both secured the majority of points for their teams – McKeown with visible delight, Woodland looking unsure even as she delivered correct answer after correct answer.

But there is another site of sexism on University Challenge, one that earns less column inches: the questions. Drawing on all areas of history, science, language, economics and culture, the questions often concern notable thinkers, artists, scientists, and sportspeople. Of course, our society’s patriarchal hierarchies of achievement have meant that the subjects of these questions are mostly men. General knowledge is, after all, a boys’ club.

Over the course of this 2017-8 series, though, I noticed a shift. More women than ever seemed to be making their way into the questions, at times with deliberate reference to the inherent sexism of their lack of cultural prominence. On 5 February, there was a picture round devoted to female composers, with contestents asked to identify Clara Schumann, Ethel Smyth, Rachel Portman and Bjork from photographs, who, Paxman explained, are all “women that are now listed in the EdExcel A Level music syllabus after the student Jessy McCabe petitioned the exam board in 2015.” Episodes have included bonus rounds on “prominent women” (the writer Lydia Davis, the pilot Lydia Litvyak, and the golfer Lydia Ko), “women born in the 1870s and 80s” (Rosa Luxemburg, Elizabeth Arden and Vanessa Bell), and the female philosophers Mary Midgely, Philippa Foot and Iris Murdoch.

Elsewhere, questions raise a knowing eyebrow at the patriarchal assumptions behind so much of intellectual endeavour. A music round on famous rock bands quoted the music critic Kelefa Sanneh’s definition “rockism”: “the belief that white macho guitar music is superior to all other forms of popular music”. Another, on opera, quoted Catherine Clement’s Opera, Or The Undoing of Women, which explores how traditional opera plots frequently feature “the infinitely repetitive spectacle of a woman who dies”. “Your music bonuses are three such operas,” Paxman said dryly, to audience laughter.

University Challenge’s questions editor Thomas Benson confirms that there has been a deliberate attempt to redress a gender imbalance in the quiz. “About three years ago, a viewer wrote in to point out that a recent edition of the programme had contained very few questions on women,” he explains. “We agreed and decided to do something about it.”

Last night’s final included a picture round on artists with works concerning motherhood (Mary Casatt, Lousie Bourgeois, Leanora Carrington and Frida Kahlo) and a music round on Marin Alsop, the first woman to ever conduct the Last Night of the Proms, as well as sets of bonuses on the American writer Willa Kather and Byzantine historian and princess Anna Komnene.

Former winner Hannah Rose Woods is delighted by the increase in such questions. “I think it’s fantastic!” she tells me. “These things are really important in changing people’s perceptions about women in the past, and the way women’s contributions to science and the arts have often been written out of history. We need to keep challenging the idea of the White Male Canon.”

Last night’s winner Rosie McKeown says that while she didn’t necessarily notice a deliberate attempt to gender balance the questions, she was “very pleased with the quality of those questions that did come up”.

“Although it wasn’t in one of our matches,” she tells me, “I thought the picture round on female composers was especially good for highlighting women’s achievements.”

For all the enthusiasm for these questions, in the studio they’re often met with blank stares. While University Challenge questions are broad and imaginatively posed, there are some reliable revision topics and techniques: from Nobel laureates and the years of their wins to identifying famous paintings and classical music excerpts. McKeown says she has been a religious viewer of the show since she was 11 years old, and admits to watching reruns of the show to prepare. Shift the kinds of answers you might be looking for, and teams may struggle.

“Do we know any female British composers?” Leonie Woodland said weakly, looking at a picture of Ethel Smyth. Trying to come up with a female Muslim Nobel laureate, one contestant desperately suggested Aung San Suu Kyi. Asked to provide a first name linking an American concert pianist with the sister of Lazarus one male contestant still buzzed in with “Daniel”.

“Even if we didn’t always get them right,” McKeown tells me, citing that round on female philosophers, which saw them pass on every question, as an example, “it was great to see so many important female figures represented.”

“I don't think the questions about women necessarily affected our performance, but it’s certainly a very good thing that they were there and I hope that they’ll arouse people’s interest in the women featured and in their achievements.”

Benson believes that it hasn’t had a significant effect on performance. “The great majority of the questions that feature women are no different to any others, in that they sit firmly within the realm of standard academic general knowledge.”

He notes that they often refer to historical and background details, citing sets of bonuses on Canadian novelist Ruth Ozeki and British physicist Hertha Ayrton, which both teams answered correctly in full. “Though Ozeki and Ayrton may not be household names, the questions are definitely answerable and deal with central themes in their work and achievements.”

It’s easy to brush off the significance of a fairly geeky Monday night BBC quiz show, but University Challenge still regularly pulls in three million viewers. In any case, a show like University Challenge has a cultural significance that outweighs its viewing figures. It helps to shape our understanding of which subjects are intellectual or important, which are history’s most notable achievements, and who is worth learning about. To ignore questions of identity is to risk intellectual laziness, relying on tired ideas of canonical figures – or worse, supremacist propaganda, privileging the achievements of white men over all others.

Quite aside from making for less predictable and more enjoyable television, by including questions on the likes of Stevie Smith, Nella Larsen, Gertrude Stein, Myra Hess, Margaret Mead, and Beryl Bainbridge, University Challenge can diversify the mental encyclopaedias of its viewers, be it a tweed-wearing 60-year-old in Leamington Spa or an 11-year-old like Rosie McKeown with her own dreams of one day competing. It has a responsibility to do so.

Anna Leszkiewicz is the New Statesman's deputy culture editor.