THE OBSERVER: Carillion in crisis as outsourcing operation crumbles under debt

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Professor Karel Williams at Manchester University noted that Carillion had turned from a construction company into an outsourcing conglomerate, which was, he said, “a bad idea”.

Williams added: “With outsourcing, you have to continually bid for new contracts, and the stock market expects to see continuous growth. But sooner or later you take on a contract that makes huge losses and the operation can’t sustain those losses.

“There are problems when you move past being a specialist outsourcer. Many conglomerates just churn through contracts and move into areas they don’t understand, until their luck runs out. This was an accident waiting to happen.”