In 2001 the government forced Bradford council to outsource its education services, all of them, to a private company. The 10-year contract went to Serco. The council leader, asked why Serco, a company which had no experience in education, said that they got through the procurement process as the best option on the basis of the promises they made; they would hire the required expertise. Serco said that they would improve education in Bradford, and would be paid bonuses on the only measure which the government saw as relevant, the number of GCSE passes. Those passes went down, with teachers complaining that they were under continual pressure to improve GCSE results at the expense of everything else. Serco tried to renegotiate the contract when it was clear that they were not going to achieve the promised results. Ten years on, the council is taking education back in-house, to no one's regret. Serco say they haven't made a penny from the contract, and insist that they have improved primary education in the city.
There are stark lessons here.
- Large private companies are good at getting contracts in all sorts of areas where they have no experience, because they employ bid writers to make the right promises, and are willing to hire the people with the relevant expertise. But all too often those promises are not fulfilled.
- Contracts have to contain some measure of success on which to base payments to the company; outcomes, in other words. Focussing on these outcomes can do great damage to the overall service.
- Once tied into a contract, a local authority can do little or nothing to save a service from going down the tubes until the contract period is up.