They are just two of the private companies being hauled in front of MPs today to give evidence to the Public Accounts Committee over failing government contractors.
UNISON is urging a major rethink on the use of outsourcing across the public sector. Recent contract failings have led to a growing number of local authorities taking the decision to bring privatised services back in-house. The Association for Public Sector Excellence has identified 52 examples of councils bringing services back in-house between 2009 and 2011 and that trend is continuing.
G4S, who this week (19 November) was fined £23.3m for inappropriately billing the Government for the electronic tagging of offenders, has had all of its central government contacts placed under review after a string of scandals.
UNISON General Secretary, Dave Prentis, said:
“UNISON welcomes this Public Accounts Committee inquiry, but the revelations about G4S and SERCO should trigger a wider review of the use of outsourcing in public services. Government minister Jeremy Hunt was sadly right when he said it was ‘completely normal’ for a contractor to fail to deliver on a major project in the wake of the G4S security scandal at last year’s Olympics.
“A growing number of councils are recognising that the quality and reliability of privatised services has become unacceptable. Using private contracts can add additional costs such as financing, corporation tax and contract management costs, in addition to the profit that the private sector expects to make. The bottom line with these contracts is that the supplier needs to make profit and this benefits the shareholder, not the taxpayer.
“Insourcing has been a trend in the private sector, you only have to look at the major supermarkets and British Telecom. Now it’s time for a rethink in the public sector.”
UNISON, the UK’s largest public services union, has extensive experience of dealing with local government procurement practice, including the contracting out of our members’ jobs to external providers. It can cite a series of large scale contracts in local government that have been terminated early or that are faced with controversy – see below.
ends
Notes to Editors
1. Examples of large scale long term contracts ended
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|
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|
Local Authority |
Private Company |
Contract Let |
Contract Length |
Date ended |
|
Bedfordshire l |
Hyder Business Services |
2001 |
12 years |
2005 |
|
West Berkshire |
Amey |
2002 |
10 years |
2005 |
|
Rochdale |
Mouchel Parkman |
2006 |
15 years |
2011 |
|
Sefton |
Capita Symonds |
2008 |
10 years |
2013 |
|
Southwark |
Vantage taken over by General Dynamics |
2004 |
10 years |
2013 |
|
Sandwell |
BT |
2007 |
15 years |
By end of 2013 |
2. Contracts facing controversy
|
|
|||||
|
Local Authority |
Private Company |
Type of arrangement |
Contract let |
Contract length |
Nature of controversy |
|
Liverpool |
BT |
Liverpool Direct Limited (Joint Venture 60% owned by BT) |
2001 |
11 years extended to 16 years |
Governance; lack of financial transparency; mark ups; council share of profit |
|
Birmingham |
Capita |
Service Birmingham (Joint Venture 65% owned by Capita) |
2006 |
10 years extended to 15 years |
Governance; mark up; operating profit now £58.000 a day; council share of profit |
|
Lancashire |
BT |
One Connect Limited (Joint Venture 60% owned by BT) |
2011 |
|
Governance |
|
Somerset, Taunton Deane and Avon and Somerset Police |
IBM |
Southwest One (Joint venture 75% owned by IBM) |
2007 |
10 years |
5 consecutive years of losses; SW1 (part owned by Somerset Council) suing Somerset Council |
