BUST

The demise of Carillion threatens jobs and the completion of a number of major public contracts.

It also raises questions about how to pay for public works.

The left bang on about "taking it back in house", whatever that means.

More nuanced observers recognise that when a string of public / private contracts go wrong, you can't simply lay all the blame at the door of the contractor. Moreover, in huge, decade long contracts, there has to be some reciprocity in the risk. Major builders are now refusing to take fixed price contracts from government for that very reason.

I had my own mini experience of this when I wanted to get some barns converted. The builder,who had done some smaller works for me, agreed to pitch on a fixed price basis. He came to me with a price. I played very hardball, and told him that if he even wanted a sniff at it, it would have to be half that price. He, eventually, agreed. After some time on the job, it became apparent that he and his son, working for him, did not appear most weekdays. The reason took some time to emerge. His business had gone bust on the back of my contract. He did complete the work, after a great time, and, as I now see it, somewhat heroically. This poor man was simply ill equipped with the assertiveness to tell me where to stick my price positioning.

On a much larger scale, and complicated by banks and governments standing off against each other to see who would blink first in bailing out debt, this is what has happened to Carillion.

We need major infrastructure projects. They're risky. We need risk sharing. And we need a mature politics, capable of seeing the advantages of this, without playing political football with our infrastructure's future or pretending that a macho stance on any side will actually construct success.