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Time to call a halt to the outsourcing racket

CAPITA’S 12-year contract to run military fire and rescue services shows up the whole rotten system of outsourcing that blights our public services.

Within months of the collapse of Carillion, which continued to snap up lucrative government contracts well after ministers knew that it was in trouble, the Tories are continuing to gamble with workers’ livelihoods and public funds alike by commissioning firms that could hit the rocks at any time to carry out essential work.

Last July when, despite Carillion’s disastrous 2017 profit warning sending share prices tumbling, ministers saw fit to hand it a £450 million rail construction contract, Chris “Failing” Grayling claimed that the government had “made sure [Carillion’s problems] were not an issue for these contracts.”

It had indeed by ignoring those problems. Carillion executives were able to “stuff their mouths with gold,” in the words of Labour’s Frank Field, while hoovering up our money, cooking the books by bullying small suppliers into accepting late payments for services and failing to address any of the risks to the company’s sustainability.

When it collapsed, thousands lost their jobs and those owed pensions by the firm took a big hit. The fat cats running the show were better off, having taken care to change the company’s rules so that their bonuses could not be clawed back in the event of bankruptcy.

MPs reviewing the collapse concluded last month: “Carillion could happen again and soon.”

You bet it could. It beggars belief that the government could, in its own study, conclude that Capita scores 10 out of 10 for risk  — so it’s as likely to collapse as it could possibly be, having made losses of £513m last year — and assess the health of the company at a miserable three out of 100 and then calmly give it a 12-year contract to run fire and rescue services attached to British military bases worldwide.

Capita’s rival for the contract was Serco. Ministers could, perhaps, be forgiven for being unwilling to hand more services to those charmers after having to order them to give up contracts to electronically tag prisoners in 2013, having found that Serco, along with its identical twin G4S, had been charging the public to tag individuals who turned out to be behind bars, overseas or six feet under.

It was Grayling to the rescue then too. He handed the contracts to Capita.

But the government has continued to shower Serco with contracts. Serco was even one of the vultures at the Carillion carcass, snapping up a raft of healthcare contracts from the stricken giant at knock-down prices in February.

It would be easier to sympathise with ministers forced to choose between two such unattractive suitors if they were actually forced to choose. But they aren’t.

Labour’s charge that the Tories are presiding over an “outsourcing racket” is spot on. A handful of unscrupulous profiteers have cornered this market, as is the case in other privatised services such as the railways.

Fraud, breach of contract, shoddy services, impending meltdown — nothing stops this merry-go-round as the same crooks who shafted us last time come round for another go.

Ministers’ behaviour would be hard to understand if they had the public’s interests at heart.

They don’t. Outsourcing is Conservative ideology, of course. Some ministers may believe in the “private sector always knows best” fantasy despite the overwhelming evidence to the contrary.

But it’s also a way for the party of Britain’s ruling elite to reward its friends, enriching the spivs and speculators whose cause they serve.

The solution is to take public services in-house and pay public servants to deliver them. Thankfully Labour’s new leadership recognises this.

The sooner we get them in government to sort out this mess, the better.


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