Carillion’s rise and spectacular fall was a story of “recklessness, hubris and greed”. Last week, the Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee published the final report of their joint inquiry into the collapse of Carillion – a “giant and unsustainable corporate time bomb”. If, as the report states, Carillion is a test of the regulatory system, the reader can be in no doubt that the report’s authors see that system as having failed miserably.
The report criticises the Pensions Regulator (TPR) saying “[it] failed in all its objectives regarding the Carillion pension scheme”. It, rather controversially, describes TPR and the FRC as “united in their feebleness and timidity” and “too passive and reactive” to make effective use of their powers.
The report comes amid the suggested bolstering of TPR’s powers in the recently published White Paper and TPR’s renewed commitment to intervene more quickly where defined benefit schemes are underfunded or avoidance is suspected.