153. Carillion formally approached the Government to ask for financial assistance on 31 December 2017, when it became clear that it was a prerequisite of discussions with existing lenders about further support.445 Though the Government was by that stage involved in discussions with Carillion, the only relief they had granted the company was a deferral of tax liabilities under a HMRC "time to pay arrangement" worth £22 million in October 2017.446
154. Discussions with the Government continued over the first two weeks of 2018. The company made a further request to HMRC to defer tax liabilities totalling £91 million across the first four months of 2018. HMRC refused to accept the request at that point, stating that it would have to be referred to their Commissioners.447 On 13 January 2018, Philip Green wrote a final letter to the Cabinet Office making the case for Government to provide guarantees of up to £160 million to the company between January and April 2018.448 Unless this money was provided, Mr Green noted the probability that they would have to file for insolvency. He claimed it was in Government's best interest to provide this funding because they did not have a viable contingency plan in place and allowing Carillion to fall into liquidation would "come with enormous cost to HM Government, far exceeding the costs of continued funding for the business". Mr Green argued that in such a scenario that there would be "no real ability to manage the widespread loss of employment, operational continuity, the impact on our customers and suppliers, or (in the extreme) the physical safety of Carillion employees and the members of the public they serve".449
155. The Government ignored these claims, aimed at propping up a failing business model, and rejected the request. Ministers rightly argued that "taxpayers should not, and will not, bail out a private company for private sector losses or allow rewards for failure".450 £150 million was made available by the Government to support the insolvency in 2017-18, as well as an unquantified contingent liability to indemnify the Official Receiver.451
156. In his last-minute ransom note, Philip Green clearly hoped that, faced with the imminent collapse of Carillion, Government would conclude it was too big to fail. But the Government was correct not to bail out Carillion. Taxpayer money should not be used to prop up companies run by such negligent directors. When a company holds 450 contracts with the Government, however, its collapse will inevitably have a signficant knock-on effects for the public purse. It is simply not possible to transfer all the risk from the public to the private sector. There is little chance that the £150 million of taxpayer money made available to support the insolvency will be fully recovered.
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445 High Court of Justice, In the matter of Carillion plc and in the matter of the Insolvency Act 1986, Exhibit: KC1 - First witness statement of Keith Robertson Cochrane, Dated: 15 January 2018 (Not published).
446 Carillion plc, Weekly reporting pack, 27 October 2017 (not published)
447 High Court of Justice, In the matter of Carillion plc and in the matter of the Insolvency Act 1986, Exhibit: KC1 - First witness statement of Keith Robertson Cochrane, Dated: 15 January 2018 (Not published).
448 Carillion plc, Summary of short term funding proposal and status update, 13 January 2018
449 Letter from Philip Green to Permanent Secretary to the Cabinet Office, 13 January 2018
450 HC Deb, 15 January 2018, col 624
451 HM Treasury, Central Government Supply Estimates 2017-18 Supplementary Estimates, February 2018, p 475 and p 496