150. Crown Representatives were introduced in 2011 to "manage the relationship between Government and each of its strategic suppliers", and act as a focal point of for their contact with Government.436 Carillion easily met the definition of a strategic supplier.437 Philip Green described Carillion's relationship with its Crown representative as "transparent" and the "key relationship" it had with Government.438 Richard Howson said he met with the Crown Representative each quarter and on an ad hoc basis in between.439
151. As part of its management of key strategic suppliers, the Cabinet Office is responsible for monitoring "publicly available sources for financial information [ … ] including in particular information about "trigger events" that could potentially lead to the invocation of financial distress measures in Government contracts".440 Such information is expected to be shared with the Crown Representative to discuss with the supplier. A profit warning is one such trigger event.441 Carillion issued three profit warnings between July and November 2017, yet between August and November 2017 there was no Crown Representative in place for Carillion, owing to "normal staff turnover".442 The Government have conceded that this was a "longer-than-usual delay" as they sought someone with experience of corporate restructuring rather than company finances.443 Officials maintained that the July profit warning was a complete surprise to them, but that contact was subsequently stepped up, and 25 meetings between the Government and Carillion were held between July and January. 444
152. The assignment of a Crown Representative to Carillion served no noticeable purpose in alerting the Government to potential issues in advance of company's July 2017 profit warning. The absence of one between August and November 2017 cannot have increased the Government's ability to keep itself informed of the direction of the company during a critical period before its collapse.
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436 Cabinet Office, Strategic supplier risk management policy, November 2012
437 The Strategic supplier risk management policy defines a strategic supplier as "those suppliers with contracts across a number of Departments whose revenue from Government according to Government data exceeds £100m per annum and/or who are deemed significant suppliers to Government in their sector."
438 Q7 [Philip Green]
439 Q9 [Richard Howson]
440 Cabinet Office, Strategic supplier risk management policy, November 2012
441 As above.
442 PQ 124135 [on Carillion], 7 March 2018
443 Letter from the Secretary of State for Business, Energy and Industrial Strategy to the Chairs, 30 April 2018
444 Oral evidence taken before the Liaison Committee on 7 February 2018, HC 770 (2017-19), Q44 [John Manzoni]