Category Archives: Serco

“In-housing” for financial, operational, social and national security reasons

Seven years ago, the Stirrer’s correspondent (The Spook) predicted that one day the powers that be will realise that services should be designed and managed by the ‘undoubted experts’ that exist within the council.

S/he explained that they would be more practical and less expensive than those designed by “by cavalier consultants and back room HR boffins who have no conception of delivering a service and are only concerned that “procedures” are followed and “statistics” are recorded, irrespective of how impractical and resource wasting this might be.

Yesterday the Financial Times predicted that Learndirect, a company owned by the private equity arm of Lloyds Bank, is at risk of collapse, following a report by Ofsted. This prompted a data search which revealed 2013-4 as vintage years for complaints about the performance and cost of outsourcing companies.

Last year a survey of 36 strategic public-private partnerships signed between 2000 and 2007 found that 13 of the contracts – ranging from 7 to 15 years and covering IT, back-office functions, property management and highways – have gone back in-house at the end of contract or as a result of early terminations. In more than a third of cases, councils found that delivering services in-house could save more than outsourcing to commercial companies in long-term, multi-service partnerships. A return to designing, staffing and over-seeing services in-house can improve performance, reduce costs and provide stable employment for local people at all levels, with money circulating in the area, instead of going to distant shareholders.

The New Statesman noted that many companies featured on their list of nine spectacular’ council outsourcing failures were said to be looking “excitedly” at the NHS – hoping for “heaps of public money, ditching service the second the contract is framed and delivering huge returns to their shareholders”. Its 2014 article opened:

“One of the many concepts that free marketeers refuse to abandon in the face of all evidence is the idea that the private sector is better at providing public services than the public sector. Private companies have been cashing in on this fable for years at council and government level. As we file this report, another glorious outsourcing triumph is breaking: the Ministry of Justice has asked police to investigate alleged fraudulent behaviour by Serco staff in its Prisoner Escort and Custodial Services contract”. An online search will reveal that this is one of many problems reported in different countries. 

Punitive contract ‘get out’ clauses – real or imagined 

The article also listed the amount councils have had to spend to get out of private sector contracts and/or to deal with contract disputes and cost overruns. Note Javelin Park – the Gloucester incinerator contract revelation.

Despite these concerns, four years ago Swindon council brought basic ‘commercial’ services such as waste collection, recycling, highways maintenance and grass cutting, back in-house in order to save an estimated £1.8m. Last year, because of performance problems, financial pressures and NHS policy shifts, Swindon also decided not to renew contract with social work provider SEQOL.

Birmingham City Council recently ended the Service Birmingham Joint Venture with Capita which provided the Council’s information technology, ran the council tax and business rates administration service. The process continues with its move to bring waste and recycling collection in-house.

With reference to Serco, G4S and others – Simon Chesterton goes deeper, beyond issues of cost and efficiency:

 

He asks (left) whether there should be any limits on government capacity to outsource traditionally “public” functions:

 

“Can and should a government put out to private tender the fulfilment of military, intelligence, and prison services?

 

Can and should it transfer control of utilities essential to life, such as the supply of water?”

 

 

 

 

 

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In Cloud Cuckoo Land, save money by recruiting an outsourcer

capita

Capita, the FTSE 100 outsourcer, which manages the congestion charge for Transport for London and administers military bases across the UK for the Ministry of Defence, has just been awarded a £1bn NHS contract. Other reported triumphs:

  • A contract helping new doctor-led clinical commissioning groups to buy billions of pounds of services for hospitals and GPs.
  • An £80m, 10-year contract providing IT, finance and estate management services to the Central London Community Healthcare NHS Trust, which employs 3,000 staff providing services in west London.

The NHS seeks to use the private sector in its pursuit of savings – really?

The FT’s Gill Plimmer and Sarah Neville, who report that Capita has largely avoided the scandals that have tarnished rival outsourcing groups G4S and Serco, are directed to the work of Professor David Bailey on the company’s record, ‘assisting’ in the local government of Birmingham. One of many analyses is his Service Birmingham’s £63,000-a-day Dividend Bombshell. For others, search on David Bailey, Capita.

Despite its recent London and Liverpool setbacks . . . another reward for failure?

The seven-to-10 year contract will see Capita provide GPs, opticians, pharmacists and dentists with a range of back office services, including payments administration and the management of clinical records.

Five Liverpool NHS Trusts withdrew from a contract with Capita because of concerns about the quality of the service provided. In September 2014, a few months later, West London Mental Health NHS Trust cancelled their contract after the company proved “unable to meet acceptable ‘time to hire’ targets”, particularly for nurses. At the same time Alder Hey Children’s NHS Foundation Trust and Liverpool Heart and Chest Hospital NHS Foundation Trust terminated their contracts. And in November Mersey Care Trust revealed that “information governance issues” had been uncovered when the services were taken back in house.

A change of tune

After their recent lobbying – see Health corporates rampant – private sector providers are now said to be ‘quietly confident’ that more opportunities will emerge. They believe that many healthcare trusts, faced with a £30bn shortfall in the NHS budget over the next seven years, will have little option than to work with the private sector, which pledges to invest in technology, improve staff productivity and use economies of scale to deliver services at lower costs.

And caring health professionals say?

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Dr Clive Peedell, a cancer specialist who is co-leader of the National Health Action Party, established before the general election in May with a full manifesto commitment to improving the nation’s public health care, said:

“This is exactly what we predicted would happen. The ludicrous NHS structure created by this government has meant a whole new layer of administration is needed to support it, increasing costs and diverting money away from patient care. Now a giant outsourcing company is cashing in on providing a service the NHS should not even need, that has been cultivated by this government.”

Theft by government? Philanthropists beware, corporates rejoice, 3.4m people betrayed

What isn’t acquired by ‘right to buy’ will be privatised. As many teachers, social workers, GPs, disabled and disadvantaged people are driven to desperation by their tortuous ‘reforms’, government now proposes to rob the charitable sector.

persimmon solihullRuefully citizens watch and attempt to protest as the Conservative government spends their taxpayers’ money – so often unwisely and against the public interest. They have seen local councils robbed of their housing stock – and political devotion to the corporate sector favouring the landlord interest and delighting other potential party funders – builders of ugly, expensive and ‘poky’ housing (left).

Having failed to induce charities to take over social care at rock bottom prices (Big Society agenda to increase the sector’s role in public service provision) government has reduced their funding and is now attempting to break up the housing trusts set up by philanthropists.

bournville social housing

Government proposals will eventually benefit the landlord and corporate building sector by destroying the cherished legacies of philanthropic groups and individuals the Guinness Partnership, the Fry Housing trust, Aster, B3Living, Midland Heart, Orbit, Poplar HARCA, Riverside, Sovereign, SpectrumTrafford Housing Trust, the Haig Housing Trust and the Bournville Village Trust (above).

Further questions:

  • Will they privatise the sort of unsaleable accommodation provided by the Church Housing Trust – rich pickings for Serco etc?
  • Will much of the Peabody Group’s huge social housing provision pass eventually into the hands of private landlords?

Deplorable case history in brief:

About 800,000 housing association tenants already have a “right to acquire” their homes. Phoenix Community Housing, in south-east London, retains only a small proportion of the proceeds from each right-to-buy sale under current legislation. One of its homes valued at £205,000 in 2014 was sold through right to buy for £105,000, so private rentals-to-let-properties-007the housing association only received £27,332 – far short of the amount needed to build a replacement. Those who cannot afford the ‘right to buy’ housing will be driven to the expensive private renting sector which will happily receive the extra taxpayer subsidy.

Game set and match?

The government states that every house purchased will be replaced “on a one-for-one basis” with more affordable homes but the Department for Communities and Local Government admits that though 1.88m council homes in England have been sold since right to buy was introduced – 37% of the total stock of council homes – local authorities have built just 345,000 homes over the same period. It fails to add that this has been due to central government restrictions on the use of money derived from local housing sales.

If government means to keep its word this time, profit-driven building corporations will demand subsidies – taxpayers’ money to induce them to build the social housing needed and promised by government.

The social gap widens: whilst these proposals will cheer rather than disturb government grandees with second and third homes inherited, acquired or bestowed [latest taxpayer funded stately home in the Cotswolds ironically for unelected minister for social equality], 3.4 million people are now on the national waiting list for social housing in England.


Read further: http://www.theguardian.com/society/2015/apr/14/right-to-buy-housing-associations-your-questions-answered

 

Austerity 4: cuts persist as the state offers even richer pickings for corporations

 Recently Lesley Docksey sent this heartfelt reflection:

“The trouble is we know the problem, and it’s all very well George and Seamas saying we have to ban this, get rid of that and set up something else.

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“But how do we actually do it, how do we the people force a break between the corporate power and politicians?”

Despite the poor record of service by the private sector in prisons, transport, energy and water, British schools and hospitals are loudly threatened with takeover, a slavish imitation of our special friend’s policies for schools and hospitals.

Cameron's real change

Anne sent this link to an article by Jon Stone about the fire hazard and other structural failings of Cumberland Infirmary in Carlisle, first opened in 2000 under the “private finance initiative”, under which the NHS pays a private company rent-like payments to make use of facilities. The UK now owes more than £222bn to banks and corporations for these Private Finance Initiatives, conceived by Conservatives in the 1990s and ‘embraced’ by New Labour.

Will this hospital be handed over to ‘the state’? In other words, farmed out to Capita, G4S or Serco?

atos costs

In the FT, Gill Plimmer reported that the Official Journal of the European Union database, which records every public sector contract worth more than £115m, reveals that £20bn worth of government contracts is now handed to the private sector. About half of council waste management services and 23% of human resources, IT and payroll functions are now privatised. Tens of thousands of health, defence, security and IT workers have transferred to corporate employers such as Babcock, G4S, Serco, Capia, Mitie and Carillion. This continues, even though the reputation of the private sector in delivering public services has been repeatedly damaged – examples include the high profile failure of G4S during the Olympics and the legal action facing Virgin Care over its running of NHS and social care services in Devon. Monbiot’s devastating, fully referenced account of such failures may be read here and others have been written by Gill Plimmer in the Financial Times.

‘Mayoral hokum’

joe anderson liverpool mayorAs all these services are transferred via the state into corporate care, the cities themselves are being coerced to follow the mayoral route – which, as Steve Beauchampé notes in the Birmingham Press -was soundly rejected by voters in Birmingham, Coventry and seven other cities.

Did Liverpool – which held no referendum – make the right choice?

Chancellor Osborne is insisting that powers must be devolved through the office of a regional mayor – so much easier to induce or threaten than a whole council – a puppet?

As economic geographer, Professor Michael Chisholm summarised the position more politely, “One could cynically say that the proposal for elected mayors is yet another structural diversion while the steady centralisation of power continues”.

Beauchampé proposes consigning this ‘mayoral hokum’ to its rightful place in the dustbin of history, rejecting the notion that in a democracy just one person can understand, represent and address people’s priorities, needs and hopes, creating and implementing a vision for our fast changing region and its youthful population. He sets out a ‘radical’ – because truly democratic – alternative as a draft proposal.

But, as Lesley asks, “how do we the people force the break between the corporate power and politicians?”

Proportional representation could be the first step.

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