Blog Archives

Focus on cuts – 5: the poorest targetted

A reader from Bournville draws attention to an article by Jules Birch in Inside Housing, a weekly magazine for housing professionals. He focusses on a recent TV Panorama programme about the benefit cap that now leaves thousands of people with 50p a week towards their rent.

He noticed that roughly 95% of tweets with the hashtag #benefitcap (scroll down to April 7) were hostile to the people featured in the programme rather than the policy. The majority of people commenting on Twitter were seeing the undeserving individual instead: the stroppy single mother with a mobile phone and the couple with many children. He notes that exactly the same thing happened with Benefits Street, How to Get a Council House and a Dispatches documentary on the cap last month.

Part of the problem, he believes, lay with the way Panorama framed the issue. As Joe Halewood was quick to point out, the programme and its advance publicity seemed to assume that most people capped are unemployed and on Jobseeker’s Allowance, when in fact just 13% are.

The fact that the vast majority of people capped are either unable to work or not required to work was only raised tentatively halfway through the programme. Most of those capped are lone parents with young children who are not required to look for work, or people on Employment and Support Allowance who do not qualify for an exemption but are still not fit for work.

David Pipe explained the effects in a piece following the Dispatches documentary last month. 7,500 households across 370 local authority areas have lost their housing benefit and are now receiving just 50p a week to pay their rent. The cap leaves a nominal amount for housing benefit or Universal Credit once someone’s benefits total more than £20,000 (£23,000 in London). In effect it is imposed on top of the rest of the benefits system.

The latest budget highlighted cuts for the poorest 18-21-year-olds, who will no longer be entitled to help with their rent through Universal Credit from April 1.

For many, Discretionary Housing Payments (DHPs) are the only thing keeping them in their home and the effect over time will be rising rent arrears and evictions and allocations policies that make it less likely that people on benefits will get a tenancy in the first place. So where and how can the poorest people live? Even people in caravans are being capped, and what will the knock-on costs be in terms of homelessness and the impact on the children?

Meanwhile in Broken Britain, the May government continues the policies of its predecessors and makes decisions which seriously afflict the poorest and greatly benefit the richest: the arms traders, Big Pharma, the privatised utilities, large developers, car manufacturers, private health companies and expensive, inefficient outsourcers – Serco, G4s and Capita.





Capita to ‘support’ nuclear police: with friends like these, who needs enemies . . .

The FT recently reported that, according to figures from the Information Services Group consultancy, government spending on outsourced public services has risen from £64bn to £120bn in the five years since the coalition came to power.

Though the Serious Fraud Office is investigating Serco and G4S and the National Audit Office has called for tighter scrutiny of government contracts, the ‘outsourcing market’ gathers pace in health, justice, welfare and defence sectors and is now said to be the second largest in the world outside the US.

Concerns over food safety – and now nuclear security

civil nuclear constables

Capita, which took over the Food and Environment Research Agency in March, has won another contract. The Independent reports that the ‘outsourcing giant’ is to play a support role at the command centre of the Civil Nuclear Constabulary, an armed special police service that protects nuclear power plants, waste dumps, and nuclear material in transit.

But Capita is neither cheap nor reliably efficient:

Why does the government make such decisions – manifestations of the corporate-state nexus at its worst?


Are there really plans to strengthen the damaging corporate–political alliance if Conservatives get another term in government?

gravy train

The FT ‘understands’ that the Treasury is to permit Francis Maude, Cabinet Office minister, to offer leading business people salaries bigger than the prime minister’s as he hunts for 25 commercial directors for Whitehall.

Senior figures from the business world are to be drafted into government on salaries higher than David Cameron’s in an effort to use their corporate expertise to make billions more in savings after the general election.

corporate lobbying graphic stepsCommercial heavy hitters with the ability to drive harder bargains for the taxpayer will be recruited to negotiate the big “legacy” contracts, particularly in IT, up for renewal after the election.

Alongside the new appointments, the government will seek to strengthen commercial skills further by launching a new project leadership programme at Cranfield University. It will run alongside the existing Major Projects Leadership Academy, based at the Saïd Business School in Oxford.

The move follows a string of scandals that have outwitted Whitehall, such as the revelation that G4S and Serco, two big outsourcers, had overcharged on electronic tagging contracts.

atos costs

Will the poachers turn gamekeeper – or become more effective poachers?

Government payment strategies boosting the working capital of corporates but jeopardising the future of SMEs


Outsourcing 2: government rewards Serco for failure

Gill Plimmer in the Financial Times reports the continued lunacy (or worse) of our government in rewarding failure.

northern rail header

The largest UK government contract awarded so far this year – a £520m deal to continue operating the Northern Rail franchise until 2016 – has gone to Serco in partnership with a Dutch rail operator.

The company is the subject of an ongoing investigation by the Serious Fraud Office for alleged charging for monitoring criminals who were dead, in prison or had not been tagged at all. It has already agreed to repay £68.5m to the government.

A Reuters report said that this had led to a ban on new work, managerial departures and big hits to shares and profits, but a detailed article by Management Today adds that the ban has now ended. Serco’s CEO resigned and Rupert Soames, Winston Churchill’s grandson has been appointed to the position.

Management Today (“Scandals? What scandal) links to an article on outsourcing which notes UK central government payments to outsourcers – each one with multiple failures – including:

£700m to France-based Atos (axed by DWP)
£1.6bn to Capita (MoD computer failure)
£1.3bn to G4S (Olympics)
£3bn to Serco (see above)
And local government spent £506bn with Capita in 2012/13.

Why are companies rewarded for failure?

Though the aim of outsourcing is said to be saving money, other voices – including Management Today’s Jeremy Hazlehurst – allege that it is ‘risk transfer”: “Politicians are keen to shift the risk for some services into the private sector. It’s nice to be able to blame an outsourcer when there’s a prison riot”.

Or is it simply another undesirable, unaccountable, undemocratic feature of the British corporate-political nexus?

Corporate Britain’s security handover: power, water, transport, then military, justice and food sectors

Gill Plimmer and Carola Hoyos report in the Financial Times that the Ministry of Defence is to appoint a private sector partner to manage its military estate – 230,000 acres of land covering conservation sites, office blocks, barracks, homes and military bases.

The revolving door

revolving door largerAndrew Manley, chief executive of the Defence Infrastructure Organisation (DIO), was recruited to the MoD in 2009 after a 30-year career with oil giant Shell, becoming chief executive in 2011 as part of government plans to ‘streamline’ the MoD. If he is reinstated, following the current investigation into his financial and personal conduct, will he return to the private sector through the revolving door, as plans to hand over running of MoD bases to the private sector come to fruition?

Reward for failure?

Serco and G4S are bidding to win the £400m 10-year deal, though they have been referred to the Serious Fraud Office for overcharging the government on electronic monitoring contracts.

capita logoAnother contender, Capita, is also under a cloud. A leaked report by research company Gartner revealed that Capita’s MoD online recruitment computer system is two years behind schedule. The government has contracted to pay the company £1bn over 10 years to hire 9,000 soldiers a year for the army.

Fears in Washington and the British army about the security implications

The Observer has seen documents, marked “restricted – commercial” which spell out the fears of the US government and the British army about the potential loss of intellectual property if top-secret information about equipment is taken out of MoD control and handed to a private company. The Under-Secretary of State for Defence Philip Dunne refused to comment on this allegation.

Taxpayers’ loss?

vernon coakerThe DIO contract is one in a series of attempts to transform the way the British armed services operates.

The MoD has spent over £12m on ‘exploring strategic options’.

Last year it tried to privatise the procurement of military equipment but there was, eventually, only one bidder.

The process to date has been “a waste of money”, according to Labour’s shadow defence secretary, Vernon Coaker (left).

But the government expects to make the sale in the financial year 2014-15

philip dunne mpMatthew Smith of Jane’s reports that, in a January statement to parliament, Philip Dunne (right) said the government expects to sell the MoD’s Defence Support Group in the financial year 2014-15. DSG has a team of 2,800 top-grade engineers, responsible for the maintenance, repair and overhaul of military air and land equipment, mobile and in-barracks equipment support, fleet management. The latest news is that Babcock, KBR, Dyncorp International, Carillion and Germany’s armoured vehicle builder Rheinmetall are thought to be interested.

And the next steps: to place food and justice in the profit prioritising sector?

In 2013 Justice Secretary Chris Grayling instructed officials to explore plans for privatisation and ensure that the Courts and Tribunal Service provides value for money.

Media appears to be backing the government drive for genetic modification of food crops; a search on ‘2014 UK genetic modification’ finds many articles favourable to the technology. But MP Zac Goldsmith writes: “It is and has always been about control of the global food economy by a tiny handful of giant corporations”.

herald logo

And Ian Bell summarises in The Herald, (Scotland): “Corporate Britain is now at least as powerful as any government. It can and does face down ministers. It can and does run rings around the “watchdogs”. And we are all paying the price for that”.

George Monbiot: Nothing will change until we confront the real sources of power.

The  words of a local councillor recalled an analysis by George Monbiot in Why Politics Fails; she wrote:

“I don’t trust any politician (except myself that is!). They are all in the pockets of developers or global businesses. The people are just there for fodder to fight wars that corporates make money out of and to service the wealthiest” . . . despite the seven parliamentary principles for public life:

7 principles public life

Corporate power: the lefthand parliamentary glove puppet argues with the righthand glove puppet, but neither side will turn around to face the corporate capital that controls almost all our politics.

It’s the reason for the collapse of democratic choice. It’s the source of our growing disillusionment with politics. It’s the great unmentionable. Corporate power. The media will scarcely whisper its name. It is howlingly absent from parliamentary debates. Until we name it and confront it, politics is a waste of time.

trickle downThe political role of corporations is generally interpreted as that of lobbyists, seeking to influence government policy. In reality they belong on the inside. They are part of the nexus of power that creates policy. They face no significant resistance, from either government or opposition, as their interests have now been woven into the fabric of all three main parties.

Most of the scandals that leave people in despair about politics arise from this source . . .

Last week we discovered that G4S’s contract to run immigration removal centres will be expanded, even though all further business with the state was supposed to be frozen while allegations of fraud are investigated.

Every week we learn that systemic failures on the part of government contractors are no barrier to obtaining further work, that the promise of efficiency, improvements and value for money delivered by outsourcing and privatisation have failed to materialise.

snouts troughThe monitoring which was meant to keep these companies honest is haphazard, the penalties almost non-existent, the rewards stupendous, dizzying, corrupting. Yet none of this deters the government. Since 2008, the outsourcing of public services has doubled, to £20bn. It is due to rise to £100bn by 2015.

This policy becomes explicable only when you recognise where power really lies.

The role of the self-hating state is to deliver itself to big business. In doing so it creates a tollbooth economy: a system of corporate turnpikes, operated by companies with effective monopolies.

corporate lobbyistsIt’s hardly surprising that the lobbying bill – now stalled by the Lords – offered almost no checks on the power of corporate lobbyists, while hogtying the charities who criticise them. But it’s not just that ministers are not discouraged from hobnobbing with corporate executives: they are now obliged to do so . . .

That the words corporate power seldom feature in the corporate press is not altogether surprising. It’s more disturbing to see those parts of the media that are not owned by Rupert Murdoch or Lord Rothermere acting as if they are.

For example, for five days every week the BBC’s Today programme starts with a business report in which only insiders are interviewed. They are treated with a deference otherwise reserved for God on Thought for the Day. There’s even a slot called Friday Boss, in which the programme’s usual rules of engagement are set aside and its reporters grovel before the corporate idol. Imagine the outcry if Today had a segment called Friday Trade Unionist or Friday Corporate Critic . . .

Research conducted by the Cardiff school of journalism shows that business representatives now receive 11% of airtime on the BBC’s 6 o’clock news (this has risen from 7% in 2007), while trade unionists receive 0.6% (which has fallen from 1.4%). Balance? Impartiality? The BBC puts a match to its principles every day.

And where, beyond the Green Party, Plaid Cymru and a few ageing Labour backbenchers, is the political resistance? After the article I wrote last week, about the grave threat the transatlantic trade and investment partnership presents to parliamentary sovereignty and democratic choice, several correspondents asked me what response there has been from the Labour party. It’s easy to answer: nothing.

Cameron's real changeBlair and Brown purged the party of any residue of opposition to corporations and the people who run them . . . Since Blair’s pogroms, parliament operates much as Congress in the United States does: the lefthand glove puppet argues with the righthand glove puppet, but neither side will turn around to face the corporate capital that controls almost all our politics . . .

So I don’t blame people for giving up on politics. I haven’t given up yet, but I find it ever harder to explain why. When a state-corporate nexus of power has bypassed democracy and made a mockery of the voting process, when an unreformed political funding system ensures that parties can be bought and sold, when politicians of the three main parties stand and watch as public services are divvied up by a grubby cabal of privateers, what is left of this system that inspires us to participate?

Read the full text & references here:


Soapbox for the 99%: the grandest larceny ever – public funds handed over to bolster profit



John Tyrrell writes:

Schools, hospitals, even prisons contribute to the likes of the Chief Executives of G4S, and ATOS who thrive at the expense of the peoples’ misery. They take over key services providing poorly trained, low paid staff.

Is austerity necessary? Yes it is if you have the view that the key to a successful economy is maximising profit and rewarding the few who happen to be in the right place and the right time.

This is the dominant version espoused by politicians, the elite who court them and a press ever more tightly reigned in to serve their purpose.

Many more are seeing through the great lie and, as the power of the state is abused, resistance will intensify – as we have seen across Europe in Spain, Greece and now Turkey.

KC comments by email:

“the valuable deeds and opinions of the most responsible and conscientious individuals and front line workers count for very little when ruled by an inner circle within a financially driven and ruthlessly competitive establishment”.


G4S, Serco, Capita and the like have been flourishing – but is the friendly government worm turning?

Gill Plimmer reports 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, Capita, Mitie and Carillion.

The process continues, even though the reputation of the private sector in delivering public services has been repeatedly damaged –  recent 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.

In an earlier article, Plimmer notes that government has shaken the private sector companies by deciding to keep four out of nine prisons, due to be outsourced, in state hands because providers did not give ‘best value for money’; confidence has been further shaken by the decision that G4S will have to relinquish its Yorkshire prison contract because of inefficiency.


Read the full article here.