There are perhaps three different approaches to private participation in public services. Apart from full privatisation and PPPs, there is also outsourcing of public services. This blog has written extensively about the impact of privatisation and PPPs.
Interestingly the world of outsourcing of public services has been undergoing serious turmoil in the UK. The collapse of the contractor Carillion early this year was a landmark event.
Now Interserve, a construction and support services contractor for public works and services, which employs more than 45000 people across UK (and 69,000 staff worldwide), has announced deep restructuring to stay afloat. The company employs twice as many people as Carillion, and earns almost 70% of its income from offering services like probation, hospital cleaning and home nursing to governments in UK. It is now surviving on the back of its profitable equipment services subsidiary, RMDK. Interserve's problems come on the back of those of Amey and Kier, two other outsourcing contractors struggling for survival.
Other major outsourcing contractors like Sodexo, Sopra Steria, G4S and Serco too have courted several controversies and fines in recent years. Some have been accused of outright fraud by way of fraudulent claims on electronic monitoring contracts for offenders and even admitted to the charges and paid fines. G4S was earlier stripped off its outsourcing contract to run Birmingham prison.
A just released study by think-tank Reform has found that 52 outsourcing contracts to private companies wasted at least £14.3 bn of taxpayers' money in the 2016-19 period. It attributed this to poorly designed contracts and their management,
It found that the Ministry of Defence was the biggest culprit, accounting for just under a third, or £3.9bn, of the extra cost. One of the most costly programmes was a 15-year delay in the full decommissioning of some of the Royal Navy’s nuclear submarines, which cost an extra £1.4bn. An army recruitment programme run by Capita cost £286m more than expected, after soldiers had to be brought in to tackle backlogs created by an untested IT system. Other examples include the high-profile liquidation of Carillion in 2018, which cost the taxpayer at least £148m and a £105m payment by the Department for Education to Learndirect to continue delivering training for an extra year even after the £120m programme was rated “inadequate” by Ofsted, the regulator... About a third of the government’s budget — or £292bn annually — is spent buying services from the voluntary and private sectors... Last year, the government awarded a 12-year contract to Capita to run the Ministry of Defence’s fire and rescue services, including the transfer of 2,000 staff at 53 MoD fire stations in the UK and overseas.
It called for the creation of an outsourcing regulator to review all contracts from signing to completion.
Even as these problems play out, the UK government has continued with outsourcing,
Civil enforcement officers employed by the HM Courts and Tribunals Service will be transferred to private sector companies Jacobs, Marston and JBW Group, according to a contract notice released by the Ministry of Justice last week. The bailiff-style work involves the serving of warrants for magistrates’ courts, including the powers to arrest people who have failed to pay court fines — which range from speeding tickets and TV licences to more serious offences such as assault. According to the notice, the work “includes all warrants of control and warrants of arrest in relation to the enforcement of unpaid criminal financial impositions”. Although private contractors, with arrest powers, have been used in the past within the MoJ’s civil enforcement service, it is the first time that all of the work has been outsourced.
No comments:
Post a Comment