Tuesday, 15 March 2011

Britain's Secret Fat Cats

I managed to watch this Channel 4 Dispatches programme on 4OD - or rather, the first two thirds of it. It seems that if you pause a programme on 4OD you can't restart it, but have to go back to the beginning. I saw enough to applaud this exposure of the reality of outsourcing.
It focussed on the three biggest companies, Serco, Capita and G4S. We were reminded that David Cameron called in these and other companies to renegotiate some contracts, but the big 3 are totally unconcerned about taking a small hit now, because there's so much business in the pipeline. They are all buoyant about the vast amounts they will make in the near future. Capita's Paul Pindar reckoned they had 30 contract opportunities, worth £4.7bn, and Serco has a £16.5bn order book. The reporter tried to get at the details of these contracts but was told by the government that they were commercially confidential - giving the lie to Cameron's promise of "transparency" in government contracts. Bear in mind in what follows that A4e are in a rather different category to these 3; it isn't a publicly listed company with shareholders, so we can't get at figures for executive pay. Last year Chris Hyman of Serco got £5m, Nick Buckles of G4S got £4m and, in 2008, Paul Pindar of Capita got £10m. And half or more of their business comes from the privatisation of the public sector. We were treated to a fascinating explanation of the self-serving system which results in obscene levels of executive pay. The tax-payer who provides the dosh for the pay of the execs of the outsourcing companies has no say in how much they should get.
The programme then turned to the Work Programme. It looked at Liverpool, where a small local outfit had used the Future Jobs Fund to secure work and / or training fpr more than 400 people. Despite Cameron's talk of the Big Society, power devolving to local people, this organisation and all those like it will not be in the running for contracts under the WP; but in the North West both Serco and G4S are on the shortlist. It was clear, we were told, that even if small, local organisations start out as players in the Big Society, they will soon be swallowed up by the big fish.

The Financial Times has maintained its interest in the finances of the Work Programme. On 8 March they reported that some of the larger providers were privately dubious about whether the payment by results system was going to stack up. They can't afford not to be in it, but they are banking on the fact that the government can't let it fall over and will bail them out if necessary. Yesterday they quoted Chris Grayling's response. No provider will have more than "a limited number of contracts", in order to spread the load if anyone goes bust. And, he said, the providers can make "shedloads" of money if they get the hardest to help into work.
All in all, quite depressing.

PS. Emma Harrison was speaking at a meeting of the Policy Exchange, a Tory think tank, today about Working Families Everywhere.

1 comment:

  1. I wonder if there is any connection to the divvying up of taxpayers money which goes with the wholesale privatisation of public services and the information that could be gleaned from the forthcoming Census given that one the self-same beneficiaries will be Capita; the business that is responsible for the recruitment and deployment of the swarm of "Non-Compliance Officers" whom are about to descend upon the homes of those householders, who for whatever reason, to do return a Census form.


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