The Great British Rake Off or Family Silver Gone Now What .....?

Remember those days back in the 70s when the government set about privatising our nationalised industries?  Remember the rationale?  The income would be good for the country they said.  Introducing more competition will be good for prices they said.  Some of us believed them others didn’t, and all of us watched over the next decade or two as various utilities and assets disappeared into private hands.  It never became clear where the money went that the government got for those precious things but somehow we accepted that it had contributed towards paying off the national debt or some other equally laudable cause.
Well here we are now, 40 years down the line and most of our assets with any substantive value at all have gone to the highest bidder (most of them in other countries) and we find ourselves with gas, electricity and water bills going through the roof and allegations of corporate profiteering appearing in the press on an almost daily basis.  But, you might argue, surely the government has introduced safeguards to ensure that our best interests are protected.  Yes of course there’s Ofwat, Ofgen, Ofcom, Oftel Ofthis and Ofthat and numerous other quangos that cost god knows how much to run.  But none of these committees comprising of jobs for the boys appear to do anything to rein in the excesses of the huge corporate leeches that have carried out this passive takeover of practically every physical asset that wasn’t nailed down and quite a few that were. 

But all that is history, it’s gone, we can’t get it back we have to accept it and move on there’s nothing left to sell is there?  Well you’d think not, but behind the scenes a surreptitious and insidious (and some might say even more dangerous) programme of asset stripping has been going on; it is called ‘outsourcing’.  This innocuous sounding word, as far as our government is concerned can be roughly defined as holding a fire sale of any or all public services that can be privatised without causing riots in the streets.  It began quite uncontroversially with things like cleaning in hospitals and moved on to waste collection and the like.  Then they started to get really serious about things with moves such as selling the London Fire Brigade’s entire fleet of fire fighting vehicles to a private equity company for £2 so the Brigade could lease them back and not have to maintain them.  Needless to say the company went to the wall and sold the vehicles on to another faceless company almost leaving the Brigade without an appliance to their name.  Had it not been for the intervention of the court, London could have been left effectively without a fire service.

There have been thousands of these dodgy deals going on over the years, but the pace of the selloff seems to be accelerating.  Among the latest, the handover of prisoner tagging services to G4S.  This particular masterpiece of contract negotiation and supervision led to the government being overcharged 10s of millions of pounds for services which included tagging for dead people, people in prison and people who had been found not guilty.  Then there the court interpreter service this went to a company called Capita.  This company is routinely guilty of sending interpreters who:  speak a different language(s) than that required, are unqualified, don’t turn up at all, turn up late; and several other variations on that theme.  Some may remember that organisation Group Four Securicor that used to deliver cash and other valuables between banks well it has now morphed into the afore-mentioned enormous international corporation G4S, with fingers of thousands of pies.  Most will recognise the name from their embarrassing inability to meet their obligations at last year’s Olympics.  You may even have spotted their fire appliances at the recent airport fire in Kenya.  A brief look at the Wikipedia page will give you a soupcon of the extent of the G4S reach, and a little taster of their incompetence.  As a service provider they have proven to be something of a government favourite they have the prisoner transport contract (frequently failing to get prisoners to court on time or at all on occasion) and sometimes to the wrong court.  They even operate police services in some parts of the country.  Now they feel themselves qualified to operate children’s homes and provide advice to defendants under Legal Aid in spite of having no expertise or experience in either of these areas.  I know that there many other areas of public service where G4S and other huge corporate organisations already have contracts although I don’t believe they actually run any NHS hospitals yet but it is probably only a matter of time.

When these massive companies fail to provide the service they are contracted to (and have been paid for) there is no evidence of any of them suffering any penalty; financial or otherwise.  In fact the reverse is true; we see government departments and local authorities almost biting at the bit to renew contracts or to give them another contract in a different field of operations.  So what is the incentive then to hand over these sometimes vital services to organisations with proven records of incompetence, and some even with allegations of criminality?  Well the government will always claim that it is to ensure best value for money.  Well that is an argument of course, but only if, a) it actually does save money, b) we do actually get the service we pay for, c) that the service is of the minimum acceptable standard, and d) that the standard is maintained as a matter of course throughout whole of the term contract.  However, experience (and there is a lot of that) tells us none of those things apply in most of these contracts and the bigger the contract the less likely they are to comply with the service level agreement.  And thereby hangs the first part of the tale, if the contract is too big it cannot be allowed to fail as the consequences of failure would be political embarrassment at best, and/or massive disorder/suffering/injustice at worst.  So what does happen when it does go wrong is the politicians blame someone else such as the last government/external forces/the workforce/global conditions.  We have seen that G4S have withdrawn from bidding for the next tagging contract but they are nonetheless still allowing to continue with the existing one purely because there are no alternatives; all the competition have been forced out of business.  Every failure adds to the cost of running the service but not to the contractor but to taxpayer.  Every missed court hearing and every miscarriage of justice has massive cost implications for the whole justice system; and the same applies in other areas of public service too numerous to mention.

What’s the second part of the tale then, I hear you ask?  Well if this type of business model has been proven not to work (as it has been both here and in the US) why are officials so anxious to keep using it.  Well one can be charitable maybe it’s because the headline prices of these contracts appear attractive and without close examination look as if they have saved money.  That of course is very rarely true because the only beneficiaries of these contracts are the shareholders, unless some money, benefits or political donations changing hands somewhere along the line.  The losers are normally the service users such as the general public, the taxpayer and the workforce whose pay is forced down to the lowest possible denominator.