MPs have accused the accountancy firm tasked with salvaging money from Carillion on behalf of its creditors and pensioners of charging “superhuman” fees, after racking up a bill for £20.4m in eight weeks.
Partners from PricewaterhouseCoopers told the Commons work and pensions committee on Wednesday that they had no idea how much they would ultimately charge, admitting it would be at least June before they could estimate overall costs.
MPs had earlier accused PwC of attempting to “milk the Carillion cow dry” with roles at various stages throughout its decline and eventual collapse into liquidation in January, owing about £2bn to its 30,000 suppliers.
PwC faces MPs over accusations of ‘milking the Carillion cow dry’
David Kelly, special manager for PwC in Carillion’s liquidation, told the committee the accountancy firm was charging about £1.4m per week to employ 112 staff to keep the company running and to honour government contracts, while also trying to sell parts of the business and salvage funds for its creditors.
The Pension Protection Fund, a government-backed pensions lifeboat, is likely to pick up all but two of Carillion’s 13 pension schemes and has estimated the funding shortfall for them at about £900m.
Kelly, who said his personal rate was £865 an hour, added that PwC’s costs would gradually fall as more parts of Carillion were sold and staff from the accounting firm stopped working on the project. He said the firm initially had 257 people working on Carillion, with a bill for about £3m for their services in the first week after its collapse.
He added that it was too early to say how much money would be recovered from the failure of the company, suggesting PwC would have a better idea in June.
Defending the fees, which are yet to be paid but will be settled ahead of other creditors who are owed money, Kelly said it was “impossible” to estimate the costs given the “sheer complexity of the situation we’re dealing with”.
“It depends on the asset realisation process, it depends on the pace at which we can migrate contracts,” he said.
Rachel Reeves, the Labour MP in charge of the business select committee, which is jointly investigating the collapse of Carillion alongside the work and pensions committee, said the charges were “superhuman”. She added: “If I pay someone £20.4m working for eight weeks I would expect them to have some grasp of how much it might cost.”