PwC has clocked up fees of £20.4m in the first eight weeks of managing the liquidation of Carillion.
Giving evidence to MPs as part of the parliamentary enquiry into the collapse of Carillion, David Kelly, partner and special manager at PwC, conceded he could not estimate what the firm’s total bill would be, given the complexity of the case.
Kelly estimated the firm had billed an average of £1.4m a week for the first eight weeks and currently had 112 people working on the cased, down from 257 in the first week of Carillion’s insolvency. He added that he “would not expect” subsequent weeks to cost as much as the initial weeks.
PwC was appointed as assistant to the official receiver shortly after Carillion announced it had gone into compulsory liquidation. Carillion was a major government contractor that held contracts across Whitehall, including in schools, defence, health and prisons.
PwC, which was awarded the contract on short notice without a tender, had previously worked as a consultant for Carillion in developing its pension fund, and as consultant for the pension fund trustees.
“In terms of what we were asked to do, we were given 12 hours notification of the liquidation and we were given 12 hours notification that we were to be appointed as special managers to support the official receiver to deliver those essential public services,” said Kelly.
The final cost would depend on how quickly PwC could transition Carillion contracts to other parties and sell assets, and an estimate of the total cost would not be possible until “somewhere round about June”. Kelly avoided answering whether the government or the official receiver had asked for such an estimate, reiterating that it would be “impossible to assess”.
He added that PwC had not yet been paid for any of its work, but that it would be “one of the earlier payments”.
At one point during the session, joint chair of the enquiry, Labour MP Rachel Reeves, estimated the average cost of each PwC consultant at £350 an hour, to which Kelly said his rate as a partner for insolvency work was £865.
“What are you, a partner, director, superhuman?” said Reeves.
The maximum a partner at PwC can charge an hour is £1,119 but Marissa Thomas, partner and head of deals at PwC, who was also giving evidence to the enquiry, said no one on the Carillon case was on that rate.
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