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Different perspectives on the latest outsourcing report

A report, Government outsourcing: what has worked and what needs reform? was released on Sunday night by an independent think tank, the Institute for Government (IFG).

Lamiat Sabin reports its finding that the cost savings outsourcing is supposed to deliver have been heavily exaggerated and that public support for renationalising services will increase as a result of “repeated failures”.

In the words of General union GMB national secretary Rehana Azam: “All too often the apparent ‘savings’ from outsourcing take the form of cutting wages, terms and conditions and pensions . . . We need to rebuild our public services and return them to public and democratic ownership, serving citizens and their communities not the shareholders of big business”.

But under the headline: Labour plan to reverse outsourcing criticised by think-tank, Valentina Romei (below right) puts a very different emphasis on the report’s findings, quoting the words of Tom Sasse, senior researcher, Institute for Government:

“Labour’s policy of bringing services back into government hands by default risks throwing away the benefits of outsourcing”.

Noting that the government spends about £292bn, more than a third of all public spending, on goods and services from external suppliers and that a series of failures has brought the system under intense scrutiny, Valentina points out that these often stem from recurring issues and failures, including:

  • an excessive focus on the lowest prices . . .
  • the finding that some of the people most in need in society — jobseekers, benefits claimants, ex-offenders — have been let down by government outsourcing services. . .
  • the outsourcing of probation services which have failed on every measure, harming ex-offenders trying to rebuild their lives . . .
  • setting the cost ceiling to provide services in Cornwall in 2011 too low for many GP services providers and
  • the repeated failure of the company finally selected to meet both its performance and quality targets.

Damned with faint praise:

Valentina concluded that: “Opening up prisons to competition has led to innovations that have improved the lives of prisoners . . . Contracting out waste collection, cleaning, catering and maintenance in the 1980s and 1990s led to significant savings”.

 

John McDonnell, Labour’s shadow chancellor, also scrutinised this “40-year failed experiment”. He focussed on several points made in the report, including:

  • the fact that politicians regularly cite headline savings of up to 30% but recent evidence shows any savings are more typically around 5 to 10%.
  • 28% higher rates of MRSA infection were found in hospitals which had outsourced cleaning to companies that often employ fewer staff.
  • Private prisons also tend to pay prison officers and support staff considerably less than in public prisons (by 15 and 22% respectively) while paying managers and directors more.
  • The fact that NHS will have spent £80bn by the time all the PFI contracts for buildings such as schools and hospitals are paid off, in return for just £13bn of initial investment (IPPR think tank).

The website of public ownership campaign group We Own It, set up in 2013, is well worth visiting. Its founder and director Cat Hobbs (right) said:

“When councils bring services back in-house they save money, improve quality and have more control over the services.

“It doesn’t make sense to hand over crucial services to companies that are motivated to make a profit rather than serve the communities.”

(Ed) A statistician could objectively assess the findings of this report which may be downloaded here. Until that is done the public will continue to regard privatisation as an abysmal failure and a gross misuse of tax income by government.

 

 

 

 

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Tim Farron – the second disappointment

 In 2008 Mr Farron appeared to be a doughty supporter of food producers who then, as now, are often paid below costs of production, endangering the country’s future food security.

As primary sponsor, he introduced the EDM 1067: Country Living magazine Fair Trade for British Farmers campaign.

Then he became silent and left all to his colleague Andrew George who never faltered in forming and backing the campaign for a Groceries Ombudsman, despite strong opposition from large retailers. The fact that this has proved of little help to farmers is due to the government’s emasculation of the original proposal.

Opportunist youth or principled maturity?

Now, in a politically understandable but ethically reprehensible move, he is not only courting former party members who left during their spell in coalition but making headlines for a delighted establishment media, with unsubstantiated claims that Labour Party members are contacting him – the implication being that they might join the party.

A formerly active Lib Dem member, who has joined the Labour Party under Corbyn, has forwarded Mr Farron’s claims in his e-letter – apparently referring to the Miliband administration:

“Labour shows no intention or desire to understand economic responsibility. They have given up challenging the Government on the economy, and given them the freedom to make punitive decisions against the most vulnerable”. This does not apply to Corbyn’s administration. And ends:

“We cannot let the Government go unchallenged, and it’s why the Liberal Democrats are now the only party of credible opposition. Liberal Democrats represent people in Britain who care about helping those in need, who believe that those with the broadest shoulders must carry the heaviest burden, who care about how free and fair our society is, and who believe we need to spend within our means to achieve it”.

If that sounds like you, I have one big offer to you: join the Liberal Democrats today and become a part of our movement – for only £1 a month.

jeremy corbyn (2)How much more logical and constructive it would have been for Farron to join the new politics being created by the current Labour administration and leaders of parties like NHAP, Plaid, the Greens and Mebyon Kernow. And many have welcomed the words of the SNP’s able Commons leader MP, Angus Robertson at the latest PMQs. In statesmanlike tones, and with an effective reproof after David Cameron’s lapse, he said that his party “looks forward to working with Jeremy Corbyn and against government austerity” adding “particularly on Trident”


Next: Times’ journalists: ignorant of John McDonnell’s work and alliances, economical with the truth, or under orders?