Accounts Fallacy Exposed Yet Again!

Over the years, I have often been staggered by quite incredible things done in the name of good procurement – like trying to get small service companies to take out performance bonds. But one of the craziest has to be the obsession of asking to see three years accounts at the outset – and then never revisiting the company accounts again.

Today, Rok plc, the building company, follows Connaught into administration. How many saw that one coming? Well clearly Highlands and Islands Enterprise (HIE) didn’t as, according to the BBC website, they “signed a four year contract worth £32m with Rok to handle every stage of most of its building projects”.

Notwithstanding the fact that hardly any public sector body keeps financial tabs on its big suppliers, the even bigger point for me is that having sight of three years accounts seems to provide the only safety check people do - plus, of course, you get a big tick in the box saying you did some checks. Unless such things as an ownership and market analysis are carried out too, then only minimal safeguards can be achieved. Accounts are purely a historical record that can give some pointers as to what may or may not happen in the future.

As the public sector prepares to cut back – I say prepares because the cuts have not started yet, has any one sat down to calculate how many critical suppliers are going to be dragged into the mire and follow poor old Rok and Connaught into administration?