Liquidators have recovered £500m from Carillion and its subsidiaries since its collapse January last year.
An update from the Official Receiver David Chapman to MPs Frank Field and Rachel Reeves, who chair the Carillion Joint Inquiry, revealed that liquidators had clawed back around £88m since December 2018, with another £10m of recoveries were expected, from asset sales, insurance recoveries and debtor recoveries.
Carillion was estimated to owe around £2bn to 30,000 subcontractors, suppliers and other short-term creditors when it collapsed.
The letter also revealed that accountancy firm PwC, which has provided ‘special managers’ to deal with the liquidation, charged £43.7m in fees between 15 January 2018 and 31 December 2018, followed by another £8.5m from 1 January 2019 until 1 August this year.
Chapman said he would continue to need PwC’s help but that the average number of staff assisting him was falling, down to an average of 14.6 per week between June to August 2019, down from 155.2 in January to March 2018.
The last 125 Carillion employees were made redundant by 31 December 2018. In total, 16% of the workforce was made redundant, while 84% of jobs were saved, with the majority transferring to new contractors.
Chapman added: “The complexities of Carillion’s structure and dealings as well as the volume of evidence to be reviewed are significant and it is not possible to say when we will complete the ongoing investigation. We are however working as quickly as practically possible and this work continues to be a priority.”
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Even if the 155.2 PwC staff worked on the liquidation all year it equates to £281,572 per staff member (£43,700,000 / 155.2), not a bad return!!!
So, PwC charged £43.7m in fees for their “help” to Chapman from 15/01 to 31/12/2018; also, the average number of PwC’ staff assisting Chapman in January to March 2018 was apparently 155.2.
Presumably the average number of PwC so-called helpers for the entire period 15/01 to 31/12/2018 was somewhat less (the average from June to August 2019 apparently being 14.6). However, for the sake of argument, let us assume that the average did not reduce from 155.2. PwC then charged an average of £281,572 per helper – Surely that is not justifiable; surely, Chapman should not have permitted payment of such an extortionate amount.
The charge out rate for professional staff is approximately three times basic gross salary.
This comprises of gross basic plus 50% for government. Impositions. Then double this figure tor company overheads, vis rental, rates insurance etc
The £281,000 equates to circa £90,000 pa not an unreasonable basic pay for a qualified professional I would suggest.
are PwC the same auditors who were paid by Carillion in the years leading up to the demise of Carillion to review the accounts and who never raised any concerns over the debts owed or the complexity of Carillions structure and dealings? are PwC also assisting in a review of the role of the auditors during those years, or is that not part of the investigation?
Totally agree with Louise Welch s comments, why were the goverment not alerted to the precarious financial state of the Company prior to collapse?
PWC should at the very least heavily discounted fees charged.