“Shadow state” part 2

To be read with the chilling post below. When The Guardian AND The Times agree, something is DEFINITELY going wrong!

“The government has been accused of “irresponsibility” as it emerged that Interserve won £660 million worth of public contracts as it slid into a financial crisis that led to its collapse into administration last week.

Analysis of government projects has revealed that the outsourcing giant was handed public jobs worth £432 million in 2017 and £233 million last year. The deals were awarded even while it advised investors of its financial problems.

On Friday the parent company of the key government contractor entered administration after its largest shareholder, a US hedge fund, blocked a rescue deal. It was immediately bought out by lenders, wiping out shareholders and leading to uncertainty for its workforce. Interserve had annual revenues of £2.9 billion but a move into building energy-from-waste incinerators went awry. It cost the business £280 million and its share price collapsed.

Research by Tussell, a data analytics provider specialising in government contracting, shows that the company continued to win lucrative jobs. For example, the Foreign and Commonwealth Office awarded Interserve £66 million for facilities management services in July. The company had issued profit warnings in May 2016 and twice in 2017. Since it began lining up a rescue deal in December, it had won £6 million of taxpayer-funded work.

Interserve is one of Britain’s leading providers of privatised public sector services, with 45,000 workers maintaining and cleaning schools, hospitals, railway stations, government departments, armed forces facilities and job centres. The rapid “pre-pack” sale of the company to its lenders has allowed its operating subsidiaries to continue trading with customers and suppliers.

A spokesman for the Cabinet Office said: “The awarding of contracts follows a robust process, including financial checks.”

Source: Times (pay wall)