Interserve: What about the workers?
- Friday 15 March 2019
Unite has warned that the wellbeing of Interserve’s 45,000 strong UK workforce and it supply chain are being ignored as the company totters on the brink of administration.
Prem Sikka professor of accounting and finance at the University of Sheffield said: “Interserve’s predicament has been brought about by the relentless focus on appeasing shareholders, paying unwarranted dividends and debt. Once again the government is guilty of being asleep at the wheel in failing to learn the lessons from Carillion’s collapse and introducing measures to ensure that future large-scale corporate failures can be prevented.”
Interserve has thousands of government contracts and an extensive construction sector. The heavily indebted company has produced a controversial rescue plan which will see its lenders being given control of 95 per cent of the company in return for writing off £485 million of debt and receiving £110 million of investment. However many of the company’s existing shareholders are opposing the plan and if the rescue plan is rejected then Interserve could be forced into administration within days.
Unite which represents in excess of 1,700 Interserve workers believes that whatever the outcome of the vote Interserve’s workforce will suffer.
Following the Carillion collapse, Unite published a report Ending Bandit Capitalism: Learning the lessons which included 22 recommendations. They included:
- Director’s duties need to be reformed to require directors to concentrate on the long-term welfare of the company, rather than short term profits
- The creation of additional rules to ensure that a company’s auditors have a duty of care to employees
- The culture of public sector outsourcing must end
- The unsustainable culture of the lowest bidder being awarded public sector contracts must end
- Companies bidding for government contracts most demonstrate they are financially robust or be barred from bidding.
It is time for government to act. Don't let Interserve go the way of Carillion.