Vox Political: Capita and More Outsourcing Corruption

Mike over at Vox Political posted this article, Capita – another nail in the coffin of government outsourcing, a few days ago. Capita is one of the big outsourcing government contractors. According to Mike, it’s now facing investigation for overcharging government department. At the same time, it’s being sued by a number of small businesses for delaying payments to them. This made it extremely difficult for some of them to keep going, and a number were pushed, or nearly pushed into bankruptcy. Mike writes:

How much more corruption must the British taxpayer underwrite?

The latest private firm to face allegations that it took huge amounts of public money and used it corruptly is Capita.

That’s right – the outsourcing giant whose government contracts include taking over the Work Capability Assessment from discredited Atos in some parts of the UK, is facing an investigation into allegations that it used a major government contract to short-change small companies, resulting in some going out of business.

Capita took a minimum 20 per cent cut of the value of all contracts to administer a £250 million civil service training scheme, in a project hailed as a model of how to open up the public sector to small businesses and provide better value to the taxpayer.

But 12 companies involved in the scheme have now teamed up to demand that the Cabinet Office and the National Audit Office launch an investigation into Capita.

If it is found guilty, the company will join a roll-call of shame that includes PricewaterhouseCoopers (helping clients avoid tax while advising the Treasury on its policy to tackle tax avoidance), G4S (failure to provide security for London 2012, criminal tagging fraud), Serco (criminal tagging fraud) and A4e, if anybody can remember that far back.

The news of these allegations come from Lucy Powell, Labour Shadow Minister for the Cabinet Office. She states

“David Cameron promised the Government would pay small business suppliers within five days, yet his failure to act continues to damage our economy,” she said.

She promised that Labour would open the big government contractors to inspection under the freedom of information act, and then freeze and enforce business rates. Among other measures, they would also encourage companies like Capita to pay their subcontractors promptly by making them pay interest on late payments.

Mike adds his own views to Labour’s proposals. He gives them his broad approval, but makes the point that the laws need to be equally applicable and enforced in all parts of the UK, so that there isn’t a postcode lottery, leaving some areas and regions disadvantaged. And he also makes the point that the FoI laws need to be toughened so that government departments can’t similarly keep ducking the publication of official figures – as IDS has done for the stats on the number of people the Work Capability Assessment has killed.

Capita: A Long History of Failure

The news that Capita have been overcharging the government, while underpaying the businesses they employ, will not surprise many people, and certainly not the readers of Private Eye. Capita, like the other great government outsourcing giants SERCO and G4S, has a long, long history of what can only be described as shoddy workmanship and abysmal failure to provide any kind of quality service. It’s been that way ever since the company emerged in the 1990s. The company has featured so regularly in Private Eye’s pages that they’ve even given it a nickname: ‘Crapita’.

As for the big corporations driving the small businesses into bankruptcy by not paying them on time, that’s was also a huge scandal back in the 1990s when John Major was Prime Minister. It was another part of Tory sleaze. And nothing appears to have been done about that, either. Indeed, I’ve got a feeling that one Tory businessman tried to defend or excuse it, saying that it was how he’d managed to build up his business.

So, it’s basically the Tories being Tories: ignore the plight of the ‘little people’, and let big business get away with fraud and short changing the rest.

Mike’s article can be read at: http://voxpoliticalonline.com/2015/02/11/capita-another-nail-in-the-coffin-of-government-outsourcing/.

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2 Responses to “Vox Political: Capita and More Outsourcing Corruption”

  1. Jeffery Davies Says:

    I love it twelve new companies whot whot chassing this contract isnt anyone listening put it back under government’s control not private sector it has never been about saving monies only that they can get to get tgeir hands on the tax payers monies jeff3

    • beastrabban Says:

      Totally agree with you, Jeff. It was never about saving money, only about giving the private sector a share of the profits. As for 12 companies suing – I wonder how many more will come forward to sue the big government contractors if they succeed.

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