Theresa May has claimed proper due diligence was carried out on Seaborne Freight, despite the inability of auditors to assess the firm’s financial stability.
Transport secretary Chris Grayling is under fire for awarding a £13.8m no-deal Brexit ferry contract to Seaborne.
The contract was terminated at the weekend, after Irish company Arklow Shipping, which had backed the new operation, stepped away from the deal.
Speaking during prime minister’s questions on Wednesday, May defended Grayling’s decision.
“When these contracts were all let, proper due diligence was carried out – that included third-party assessment of the companies that were bidding for the contracts,” she said.
But a National Audit Office (NAO) report found Deloitte was unable to carry out the usual “financial robustness, including profitability, solvency and liquidity” tests on Seaborne.
“The standard tests could not be completed on Seaborne given a lack of existing financial information due to it only being incorporated in April 2017. Deloitte therefore did not make a formal assessment of Seaborne financial stability,” the report said.
Mott MacDonald, another consultancy, flagged “significant execution risks” to the Department for Transport in relation to Seaborne.
And Law firm Slaughter and May, which vetted the ferry company, meanwhile only carried out a “basic blush test” on the firm, including its filing history with Companies House, that no winding-up orders had been made against it and that its directors were not disqualified.
Jeremy Corbyn ramped up the pressure on Grayling to resign. “The spectacular failure of this contract is a symptom of the utter shambles of this government and its no-deal preparations,” he told MPs today.
“The transport secretary ignored warnings about drones and airport security, gave a £1.4bn contract to Carillion despite warnings over their finances, he oversaw the disastrous new rail timetables last year, rail punctuality at a 13-year low and fares at a record high – that is some achievement.
“Now the transport secretary is in charge of a major and vital aspect of Brexit planning. How on earth can the prime minister say she has confidence in the transport secretary?”