In the wake of the mayhem wrought by financial exuberance, the reputation of business was already on the floor. Now, along comes an Office of Fair Trading (OFT) inquiry to show that dodgy dealings were far from confined just to the financial services sector during the heady boom days.
The inquiry into cover pricing, to which we devote our cover story this month, ensnared many of Yorkshire’s leading construction firms and also cost quite a few of them sizeable fines.
Some think the OFT has come down too harsh given that the practice was, in their own words, “endemic”. But that doesn’t make it right even though it appears, incredibly, that no-one in the industry ever thought it was unlawful. Or maybe they did, but they just didn’t have the guts to speak up about it because it was so ingrained in the culture of the industry. To speak out would presumably have scotched career progression.
But let’s spell out the facts. As competition was distorted companies, particularly smaller firms, may have unfairly lost out on contracts. They may have even have been driven out of business. At the same time public bodies are most likely to have overpaid with taxpayers’ money on key projects. I say ‘may’ or ‘most likely’ because the implications of cover pricing are difficult to prove. But competition was distorted, that is clear.
Following the inquiry firms have, naturally, fallen over themselves to tell the OFT that they have now cleaned up their act and that tendering processes are all above board. Let’s sincerely hope so, because the present economic climate, and especially the depressed state of the construction sector, means the temptation to distort the market is probably greater than it ever was during the boom.
On a wider front let us not kid ourselves that this isn’t going on in some shape or form in other sectors too (indeed the OFT is rumoured to have its eyes on the wider small business economy next). Business, like life in general, has a dishonesty angle and there will always be those within a company who will seek to distort competition.
But the line from legal to illegal is often a fine one, as our bricks and mortar boys have found to their cost.
Jim Pendrill, editor
Also in: November 2009
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Dishonest ways
The great property boom was driven by sharp practice and Yorkshire companies were in the thick of it. Jim Pendrill reports.
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The show must go on
Susannah Daley takes the businesslike approach to showbiz, despite stormy seas.