Saturday, 15 March 2014

The PAC agrees with us

The Public Accounts Committee has published its report on Contracting out public services to the private sector.  It's not a long document, particularly the section on recommendations, and you can read it here.  It supports all the things which I and others have been saying for a long time about the perils of outsourcing.
As usual it was not reported in the Tory press.  The Guardian and the Independent covered it well, and the BBC mentioned it.  The Guardian spoke to Margaret Hodge, chairman of the committee, ahead of the publication.  She called the report "damning" and said the DWP was "on the verge of meltdown" with its contracts.  There has to be an end to the secrecy surrounding the contracts on the grounds of commercial confidentiality.  Even the CBI supports that one.  And there must be much better management of contracts.  The DWP is allowed its usual paragraph of self-justification, and government minister Francis Maude was invited onto the BBC's Today programme to waffle unchallenged about how things were improving.  
The Independent's Nigel Morris had a scathing piece much like the Guardian's.  The report, he said, "accused ministers of trying to cover up mistakes by refusing to divulge details of contracts."  He quotes Margaret Hodge as saying that the absence of competition meant that we have "privately-owned public monopolies which have become too big to fail."  The article mentions the A4e fraud case, along with G4S and Serco.  
There's another piece on the Guardian's website which puzzles me a bit.  It's by Jane Dudman, and it focuses on A4e's part in the PAC's verdict.  I'm puzzled because I can't find the opinions she attributes to Margaret Hodge in the report (if you can, let me know).  Mrs Hodge wants to know why "scandal-hit" A4e are still in the running for contracts.  Dudman goes on: "Last month, four former employees of A4e pleaded guilty in Reading Crown Court to 30 acts of fraud and forgery. But even Hodge was forced to acknowledge this was not a case of individuals trying to enrich themselves. None of the former staff benefited personally, she noted."  Now, if Mrs Hodge did say that, we need to tell her that she could well be mistaken.  She may be assuming that the profits from this forgery, the false outcome claims, went only to the company.  But A4e had the practice, until recently, of paying particular individuals in an office a "commission" for each outcome, and rewarding whole teams for achieving for good outcome figures.  Under that system, individuals had every incentive to push up their earnings by pushing up the figures.
One would love to think that the Public Accounts Committee's excellent work would change things, but I suspect it won't.


  1. Atos have recently released a financial report:

    I don’t really understand financial documents but I skimmed through it and ended up feeling sorry for Atos. It seems that their contract to provide WCAs in connection with ESA has caused Atos to lose a substantial amount of money.

    Also, I suspect that the government’s own desire to hide behind “commercial confidentiality” has left Atos to shoulder all of the reputational damage by itself, in a less-than-transparent desire by the government to protect the DWP and also to conceal Ministers’ reluctance to admit that their own ideology makes no sense and does not work. It is not a fact that Atos alone are to blame for all the nonsense with ESA, so why should Atos be left to take all the flak by themselves?

    During last week, I saw a short TV clip of a recent interview with Margaret Hodge. The interviewer asked her why the PAC have not summoned IDS? Mrs Hodge replied that the PAC does not summon the relevant politician.

    I suppose that is reasonable because the PAC only considers “value for money.” However, it does leave IDS to Anne Begg’s Work and Pensions Committee only. I suspect that IDS would not have dared to be rude to Mrs Hodge and Richard Bacon.

    1. I can't bring myself to feel sorry for ATOS, they knew exactly what they were accepting hundreds of millions of pounds to do. Their current big boss was once head of France Telecom (I think it was) and whilst he was in charge, carrying out massive cuts, generally doing the new broom act, thirty five telecoms engineers killed themselves. With that in mind, I cannot see any history of ATOS giving a toss about any matters pertaining to human welfare.

      They are a massive company, with fingers in so many pies around the world. The WCA will be written off as a loss easily. I doubt that they are surprised by anything surrounding this contract. If a company actively tenders then accepts a toxic contract, then they should accept everything that comes along with it.

  2. Hi Judy
    "I suspect that IDS would not have dared to be rude to Mrs Hodge and Richard Bacon."
    Give the man his due, IDS will be rude to anyone.


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