Category Archives: Serco
There are many forms of outsourcing, defined here, but in this post we refer to the practice of handing over control of public services to private enterprises. Many adverse references to the practice of outsourcing may be seen by searching this site.
The Information Services Group consultancy reports that the UK outsourcing market is now the second largest in the world outside the US; under the coalition government the number of outsourced contracts rose 125% from 526 under the last Labour government to 1,185. Justice, defence and welfare are the biggest ‘markets’
‘HGS seamlessly supports your business behind-the-scenes’ . . .
The Ministry of Justice (right), which had serious IT problems earlier this year, is handing over its outsourced system, designed to help police to book local duty solicitors and co-ordinate payments from the existing supplier, from Capita to HGS UK. After a week-long transition period solicitor Kerry Hudson, vice president of the London Criminal Courts Solicitors’ Association, said that police are struggling to log cases with the Defence Solicitor Contact Centre (DSCC). Bethan Staton reported on the problems experienced, including 30-minute hold times, staff who cannot operate the bookings system and requests being sent in error or after suspects had been released under investigation.
David Greene, vice-president of the Law Society of England and Wales, said that the service administered by Capita, had previously been plagued by faults:
- reports of wrong or missing names of detainees,
- cases given to incorrect firms,
- solicitors directed to custody suites — only to find the detainee isn’t there.
He added that the call centre “appears to have undergone a complete system meltdown” during the contract changeover.
The Law Gazette reports that Kerry Hudson wondered how many detainees across the country had gone into interview alone, having been told the police cannot get through to request a solicitor to attend. Kerry Hudson said that even when they do manage to get through, there are said to be:
- delays of four or five hours between the police first call and the DSCC then contacting the solicitor and
- when they are contacting the solicitor, much of the key information is missing (including the detainee name in some cases) and the crucial DSCC reference number.
Law Society vice president David Greene added that denying suspects the right to legal advice risks miscarriages of justice.
Public Finance, which provides news and analysis for professionals in public finance, has commented that a series of botched UK government contracts, including a Serious Fraud Office investigation into Serco and G4S for overbilling on a deal to monitor offenders, has raised concerns over whether the taxpayer receives the best value for money and the National Audit Office has called for closer scrutiny of government contracts.
This is the latest in a series of debacles linked to government outsourcing of some parts of the law enforcement system; last year the government had to reverse its decision to use private companies to run probation services.
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?”
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.
“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.
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?
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.
As 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.