Posts Tagged ‘Public-Private Parnerships’

Three Reforms for the Outsourcing Industry

April 2, 2016

Earlier today I put up a piece about how the members of the Nazis’ industrial advisory had to swear an oath of eternal loyalty to Adolf Hitler, and to use their industries and its profits to building up the Volksgemeinschaft, and so serving the whole community, rather than their own private interests. Well, the Nazis had a kind of outsourcing, in that they appointed the head Allianz, the biggest of the German insurance companies, to head the economics ministry. Hitler also sought the active co-operation of big business, deliberately toning down the anti-capitalist rhetoric and moving to stop the SA and the Nazi ‘left’ wing from doing anything radical like socialising industry.

I do wonder, however, how popular outsourcing would be if the heads of the industries involved had to swear a democratic version of the oath, in which they vowed to serve the democratically elected prime minister and parliament, and to devote their profits and energies to the whole of the British people, conceived on a non-racist basis, rather than on their own corporate profit. To some it probably wouldn’t matter, but I can others complaining at the presumption of having to swear such an oath. Florence in her comment to the post also made the point that, more importantly, the Freedom of Information Act should also be extended to cover them. It’s a good idea, and one many others have made before. It would allow the British public to know what they’re doing, and also allow the firms and sectors we wish to keep nationalised to continue to compete against them. At present the system works in the privatisers’ favour. They can use the FOI to see what the nationalised industries intend, and then try to undercut them. It doesn’t work the other way, of course. If you try to get a peek at what they intend to do, you find it’s prohibited on the grounds of company confidentiality. It’s commercially sensitive information, and so not to be divulged to the public. Even though the nationalised industries have to release it, and the private industries are competing for state business. But nevertheless, that’s how the Tories give work to their paymasters in big business.

I’ve thought about three reforms which might bring about a much needed change in the predatory and exploitative culture of the outsourcing sector.

1. Introduce worker’s representation in the boardroom.

A company’s workforce also have a solid interest in the performance of their company, and can introduce much needed financial stability. Han-Joon Chang points out that businesses in those European countries, Germany and Austria, which have such a system of workers’ representation, are much more stable and profitable financially, than industries which are run exclusively for the profit of the shareholders. Furthermore, for sometime employees in the civil servants had something like this in the Whitley Councils. These were set up during the First World War to compensate workers for the lost of the right to strike. They were dismantled in favour of a less authoritarian system in the rest of British industry after the war, so that they trade unions could carry on bargaining for the workers. Such a system should be revived, and introduced into the outsourcing sector as these have replaced the traditional civil service organs.

2. Boardroom representation of the unemployed ‘clients’ on the boards of workfare companies.

Welfare to work providers exist by exploiting the unemployed as cheap labour, under the guise of retraining workers to help them back into the labour market. However, in order to prevent the gross exploitation of such cheap labour by profiteering companies like Tesco, Sainsbury’s and charities like the Salvation Army, the actual people taken on by these companies to be retrained should also have their interests represented at the management level. This would stop abuses like that Mike covered in Scotland, where one council started a system of fining the people sent to them on the welfare to work course for such trivial offences as tutting, talking back or walking around with your hands in your pockets. Failure to pay the fines could lead you to being thrown off the course, and consequently off benefit. See Mike’s article at: http://voxpoliticalonline.com/2016/04/01/jobseekers-on-council-run-course-face-cash-fines-for-tutting-or-answering-phones/.

3. Part nationalise these companies. As these companies are working on government business, it is right that the state should also have a hand in them to make sure they are properly regulated and managed. Han-Joon Chang has also pointed out that this also has beneficial effect in providing financial stability, as shown by some of the part-nationalised firms in France. Of course, this would also mean streamlining some of the management structure, as private enterprise has many tiers of bureaucracy that is redundant under state management.

Or we could scrap outsourcing altogether.

As an alternative to all the above, we could just get rid of the ludicrously expensive, bureaucratic and profiteering Private Finance Initiative and Public-Private Partnerships, to renationalise those industries and services that should never have been put out to private tender in the first place, like schools, prisons and hospitals. And then we could set up unemployment retraining schemes that would work for the unemployed, not the overpaid heads of the outsourcing companies, like G4S, Serco, Maximus and the other wasters.

From 2012: Private Eye on Incompetence, Profiteering Bureaucracy and Racism in G4S

April 12, 2014

This is also from the Eye for the 20th April – 3rd of May 2012.

Outsaucing News

G4S, which earns most of its money from the taxpayer, has docked its chief executive Nick Buckle’s bonus over a messed-up bid to take over a Danish cleaning company that cost his firm £55m last year. But never fear: he still get his basic £1.9m salary.

G4s will also still have plenty of cash to pay for the cock-up, plus Buckles’ inflated pay7, since it keeps winning major public service contracts here in the UK.

Last month the UK Border Agency awarded it “prime” contracts worth around £300m to run asylum transport and accommodation in two of the five national regions. In true Big Society fashion, G4S will itself outsource much of this work to local charities and companies (much as workfare schemes are farmed out by A4E).

Despite the extra layers of management and contracting, not to mention the bumper executive pay and the profits demanded by shareholders that such deals entail, UKBA still thinks it will save £150m through the £620m contracts without services suffering.

In January, the home affairs select committee concluded, after a string of scandals including the death in G4S custody of Jimmy Mubenga and racist behaviour among guards, that the government must not “wash its hands of responsibility for detainees just because the service is contracted out”. But by outsourcing prime contracts to bungling Buckles and co a few weeks later, and for his firm to then subcontract the work in return for a decent fee, this seems precisely what the government is doing.

This shows what such Public-Private Partnerships entail: layers of bureaucracy, in which different companies and their shareholders expect a profit, which would be unacceptable in a state-owned enterprise; inflated salaries for chief officers, and massive cuts and savings for the funding allocated for the service, resulting in poor performance. But then, the actual quality of service seems to be very much a secondary consideration. The real reason for such partnerships is to give state contracts to private enterprises run by Tory donors and providing jobs for Tory politicians and apparatchiks.