Recommendation 8

Companies and markets can cut across several departments’ policy responsibilities or provide services to multiple departments. This meant that in the cases of Carillion, CF Fertilisers and UKCloud, no single department had a complete picture of the government’s exposure to the company in advance of it becoming distressed.18 We asked the Treasury about instances where its alert system had not worked. The Treasury told us that CF Fertilisers was an example where they “could have been alerted ahead of time had we understood that supply chain risk more systemically” as they had not known “that the supply of CO2 was dependent on that particular company”. The Department for Business and Trade agreed that it had been “slightly caught off guard”.19 Around two thirds of the UK’s CO2 was sourced from CF Fertilisers in 2018, supplying the food and drink, energy, nuclear, medical and water sectors among others. In 2019, following a CO2 supply shortage the previous year, the Food and Drink Federation recommended a clearer focus in government on the significance of the UK’s CO2 supply chain, but at the time no action was taken.20 The government had to provide temporary financial support to the company in 2021 to avoid a CO2 supply shortage after it halted operations at its site due to high natural gas prices.21