Posts Tagged ‘Serco’

America’s Private Prisons: Capitalism’s Forced Labour Camps?

October 21, 2017

In this clip from the Jimmy Dore Show, the American comedian and his co-hosts, Ron Placone and Steffi Zamorano, the Miserable Liberal, discuss the use of convict labour supplied by the American prison system by businesses and the state. Many of the fire fighters now tackling the fires raging in California were female cons. Dore points out that this is skilled, dangerous work. But nevertheless, these women were sent to do it, and some of them have been killed doing so. He goes on to discuss Kamala Harris, who repeatedly refused to release prisoners when their time was up and they were due to go back to civil society. Eventually, she was sued and said in court that the reason she wasn’t releasing them was because they were too useful as workers. Now Steve Prettor, the sheriff of Caddo County in Louisiana, has appeared to tell the American public why he doesn’t like releasing good, Black prisoners either: because they’re too useful as workers for the prison system.

Dore calls this system exactly what it is: slavery. And there is a whole slew of firms using unfree, unpaid convict labour. These include McDonald’s, Walmart and a contractor for Starbuck’s. Dore makes the point that this is what used to happen in Communist countries like North Korea, which we – the West – denounced. Now it’s being done by capitalism in America.

In one of the many interviews with the radical American journalist Chris Hedges on YouTube, Hedges talks about the massive poverty and unemployment created by capitalism and neoliberalism. He states that in American towns which have particularly suffered, the prison population has expanded immensely. This is because the state and capital have no use for these men in normal business. However, they are immensely valuable as a source of contracts for the private prison system.

And Dore is exactly right when he compares unfree convict labour in America with the forced labour systems of the Communist bloc. I’ve blogged about this before. Stalin industrialised the Soviet Union using the forced labour of millions of Soviet citizens. Businesses and enterprises needing particular types of worker would send shopping lists of how many they needed to the KGB, who would then round them up as traitors and enemies of the Soviet state, and then send them to the Gulags. Where they would be put to work building some new industrial plant.

The Nazis also had a similar system using Jewish slave workers in the concentration camps. Skilled Jewish craftsmen were put to work in a company owned and operated by the SS producing luxury products. They even produced a catalogue.

As neoliberalism privatises and takes over more of the functions of the state, so contemporary capitalism increasingly takes on the features of the totalitarianisms of the 20th century.

I don’t think we in Britain have any cause to be complacent about this, as I can see the same system easily taken over by the outsourcing companies like G4S and Serco in Britain’s privately run prisons.

This is not justice, not punishment nor rehabilitation. It is simply capitalism and slavery. And needs to be stopped.

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RT: McDonnell States Labour Will Take Back Rail, Water, Energy and Royal Mail

September 25, 2017

I’m giving this clip from RT’s coverage of the Labour party conference a massive thumbs-up. It’s a short clip of McDonnell stating that they intend to back rail, water, energy and the Royal Mail to give them to the people, who actually use and work in them. They aim to save the country and industry from the Tories’ mixture of belligerence and incompetence. And their commitment to a fairer society does not end at Dover. Just as they want a Britain for the many, and not the few, so they want a Europe for the many and not the few. This means, while respecting the results of the Brexit referendum, they will be working with our European partners during the transition period. And they will stop the Tories’ brutal treatment of immigrants.

Now we’re going to hear the screams and angry wailing from the neoliberals – the Tories, the Lib Dems and the Blairites. They’ll all start ranting now about how this is just discredited ‘Trotskyism’, that will wreck the wonderful, strong economy nearly four decades of Thatcherism has created. And, of course, the Tories, whose cabinet is stuffed with toffs and millionaires, will immediately start claiming that it will make working people poorer.

It’s none of these things. It’s good, solid, traditional Labour policy. The type of policies that gave this country decades of economic growth and higher standards for working people after the war. This was a Labour party that ensured that there was a real welfare state to look after the poor, that unions did represent the working man and woman against exploitation by their employer, and that an increasing number of young people could go on to uni without worrying about acquiring tens of thousands of pounds of debt at the end of it.

And if Labour does, as I fervently hope, renationalize those industries, I would very much like a form of workers’ control implemented in them. One reason why the Tories were able to privatize these industries was because, when Labour nationalized them after the Second World War, the party was too timid in the form nationalization took. The state took over the ownership of these industries, but otherwise left the existing management structures intact. This disappointed many trade unionists and socialists, who hoped that nationalization would mean that the people, who actually worked in these industries would also play a part in their management.

I’ve no doubt that if such plans were drawn up, all you’d hear from the Tories and the other parties would be yells about surrendering to the union barons, along with Thatcherite ravings about the Winter of Discontent and all the other trite bilge. But as May herself promised that she would put workers in the boardroom – a policy, which she had absolutely no intention of honouring – the Tories can’t complain without being hypocritical.

As for the power of the trade unions, as Russell Brand points out in his piece attacking Rees-Mogg, most of the people now relying on food banks are the working poor, whose wages aren’t enough to stave off starvation. And one of the reasons why this is so is that the Tories and then the Blairites have done everything they can to break and destroy the unions, so that the owners of industry can pay the workers a pittance and sack them at will.

And the Tories are treating immigrants brutally. We’ve send them send the vans around and put up posters telling immigrants to hand themselves in. And there have been outbreak of violence at the detention centres for asylum seekers again and again because of racist violence and bullying by the outsourcing companies running, like Serco, or G4S or whoever. And this is quite apart from the sheer racist venom spouted by the Tory press – the Heil, Scum, Express and so on.

This is a fine speech with excellent policies. Policies that hopefully put an end to four decades of Thatcherite misery, poverty and exploitation.

Five Reasons Why the Tories Should Never See Power Ever Again

May 2, 2017

This excellent video was posted on YouTube by Scot TV. I’ve no doubt he’s a Scots Nationalist, but it also holds true for the rest of Britain. He states in his explanation that an extra zero could be added to the five, but for the sake of brevity he’s leaving it to the lower number. Those five reasons are:

1. Tory election overspending. He notes that the charges have now been dropped, but about 20 or so Tory MPs are still being investigated.

2. The NHS. This is being starved of cash, so that patients are suffering appalling delays and a consequent disastrous decline in the quality of care. The NHS is at breaking point. Meanwhile, the Tories are privatising it by the back door. This part of the video shows headlines from various papers about the government selling off and handing over NHS hospitals and services to the usual private healthcare companies and outsourcing giants, like Circle Health and SERCO. There is also another funny segment from Jeremy Pie in which the comic reporter rants about how it isn’t outsourcing, it is straightforward privatisation. Pie makes the point that if the NHS needs money, then why can’t it simply be given it.

3. Benefit Cuts. This part of the video documents the terrible effect benefit cuts and sanctions are having on disabled people. It gives the facts and figures on the effects it has had on them. One of the clips is of an MP asking questions in the House about why disabled people are required to go through the Work Capability Tests, when so many – he gives the appropriate figures – die before, during and after the tests. He also shows the complete contempt the Tories have for those forced into misery by the tests, when Ian Duncan Smith didn’t have time to respond to questions about them, but very much did have the time to have his portrait painted. The video also correctly says that the attacks on the poor and disabled were so severe, that the UN was forced to intervene. He also give the sneering response from the Tories, where one snotty MP remarked that the UN rapporteur should mind her own business, just like he didn’t know about poverty in Costa Rica or wherever she came from. The video praises Dennis Skinner’s pointed remarks in parliament, where he called Cameron ‘Dodgy Dave’, and took him to task for having his mortgage paid for by the state while denying state help to others. The video calls this ‘a welcome poke in the eye’ for the Tories.

4. The Panama Papers. This was the scandal that erupted a few years ago when documents came to light showing how the Conservatives had moved their business dealings into offshore accounts in the Caribbean in order to avoid paying tax in the UK. As usual, this was mixed with contempt and sneering towards ordinary people. The clip shows the Tory MP, Alan Duncan, standing up on his hind legs in the House to attack their critics. They are, he claimed, moved solely by hatred of anybody who’s wealthy, and if people like them had their way, the House of Commons would be stuffed full of incompetents and mediocrities, who had never run a business.

5. Tory behaviour during the referendums. Here the video includes clips of the Tories, including David Cameron, once again scaremongering, with ‘Project Fear’ directed at the Scottish Nationalists in the referendum over Scottish independence, and then more of the same in the referendum over whether to leave the EU, with the Tories trying to scare people into voting Remain.

While I am a Unionist, who voted to Remain in Europe, I wholeheartedly agree with the rest of Scot TV’s reasons for kicking out the Tories and keeping them out. They did break the rules on electoral spending. They are deliberately running down the NHS so that they can privatise it by the back door. They are killing the disabled and the poor through benefit cuts. They do add insult to injury by sneering at those concerned with the poverty and suffering they inflict, at ordinary working people. And Ian Duncan Smith was vain. He was also cruel and cowardly, surrounding himself with armed guards when required to give his testimony to the parliamentary committee investigating his conduct. That was when he finally deigned to appear before them. And as Mike showed on his blog, Smith did his level best to stop the mortality figures ever getting out.

They are corrupt, with one set of standards for themselves and another for the poor. They see themselves as a favoured elite, who should be allowed to dodge as much tax as they can, while shifting the tax burden onto those who can least afford it. Half of all millionaires have actually done nothing to deserve their money, as it’s inherited. But they still see a system, that so massively rewards them while penalising the poor simply for being poor as just, and themselves as uniquely deserving their position and power. Hence Alan Duncan’s sneer about their critics being just jealous of the rich, and wanting to have parliament stuffed with mediocrities. It was the sneer of the Tory right in the 19th and 20th centuries, when they wanted to stop the working class getting the vote at all costs.

And even though I wish Scotland to stay in the Union, Scot TV is correct about the Tories running a dirty campaign of fearmongering during the independence referendum. They also ran a Project Fear campaign to get us out of Europe. The impetus for Brexit comes from the Tory right and UKIP, whose leadership are right-wing Tories. They want us to leave because they hate, loathe and detest the minimal rights granted to workers under the Social Charter.

The Tories are vile. They should be voted out and kept out. I urge people to vote for Jeremy Corbyn’s Labour party to preserve what remains of the British welfare state, and renationalise the NHS.

Dennis Skinner’s Personal Recommendations for Improving Britain

May 31, 2016

The veteran Labour MP and trade unionist, Dennis Skinner, also makes some political recommendations of his own in his autobiographical Sailing Close to the Wind: Reminiscences, published two years ago in 2014. He summarises his plans, saying

So I’m fighting for a new Labour government to axe the bedroom tax, save the NHS, cut fuel bills, created jobs for the young and raise living standards. My personal manifesto will be to the left of that of the party but I’m committed 100 per cent to the election of Labour candidates across Britain. (p.313).

As for the proposals themselves, he writes (headlines in bold are mine)

I’ve a few suggestions of my own to boost Labour’s popularity and beat the Tories.

End Privatisation

To start the ball rolling we should end expensive privatisation instead of paying a fortune to contractors such as G4S, Serco and Capita that make a mess of services in the process. It’s time we got back to publicly run, publicly owned services provided in the public interest.

Nationalise the Railways

On the railways, the £900m surplus on East Coast trains, operated publicly after the private sector crashed twice, shows us the way ahead. Instead of boosting Richard Branson’s profits, a nationalised railway could make a profit and generate the cash to improve every station in Britain.

A ‘Robin Hood’ Tax on City Speculators

If we want extra money for the National Health Service and social care, we should levy a Robin Hood tax on speculators in the city. Directing the funds raised directly to health and care, including help for the mentally handicapped, rather than to the Treasury, would be immensely popular. We could start with a low rate and increase it when the tax proves to be popular, as I’m sure it will be, by emulating the one per cent National Insurance rise for the NHS when Gordon Brown was Chancellor.

Scrap Trident

Scrapping Trident would free up billions of pounds for a massive house building programme so everybody has a roof over their head and nobody is homeless. The position on council house sales has to change or local authorities won’t build houses if they know they must sell them cheaply after a few years.

End Nuclear Weapons, Restore Local Democracy

The savings from defusing nuclear weapons can also help save local democracy. Councils are being swamped by central government. Powers are either grabbed by Whitehall or transferred to unelected quangos. Ever since the Clay Cross rent rebellion, Whitehall has dictated to communities. We need to reverse the trend.

Nationalise the Utilities

On the question of the utilities – gas, electricity, water – this is the moment to start taking them back into public ownership. We took control after 1945 and right up to Wilson’s final government, when he nationalised aerospace with a majority of only three, public ownership was advanced. To cap energy bills is a good idea but a better plan is to control utilities by restoring public ownership in Britain of firms that are currently owned in France, Germany and almost every country on the globe.

Spend More on Education; End Privatised Schooling

Spending on education more than doubled under the last Labour government, which was impressive. let’s stop the growth of faith schools and misnamed free schools – tax payers fund them so they’re not free – by enhancing the powers of local authorities to champion the education of every single child.

Raise Minimum Wage

We need to end the pay freezes. The people that are carrying the burden of the bankers’ ramp are mainly workers at the bottom of the scale. The Living Wage shouldn’t be optional. Everybody should get it. But let’s not stop at £7.65 an hour outside London and £8.80 in the capital. The trade union campaign for 10 an hour should be Labour policy. A decent day’s work deserves a decent day’s pay.

Ban Zero Hours Contracts

We should introduce legislation to outlaw zero hours contracts and private employment agencies. Playing off worker against worker, ferrying into Britain cheap labour to undercut employees, is poisoning community relations. Sticking 10, 12 or 15 eastern Europeans into a house then deducting large sums form their earnings is in nobody’s interests except cowboy employers. Reasserting the role of Jobcentres as local labour exchanges will improve wages and conditions.

Increase Trade Union Rights

Trade union rights must be strengthened significantly, including the abolition of sequestration. Industrial action requires two sides to be involved in a dispute, yet it is union funds that are seized. Rebalancing employment rights in favour of workers and unions is essential if we are to build a fairer economy.

Abandon Tory Obsession with Fiscal Restraint

And we must escape the dumb economic mantra about balancing the books. There would have been no Spirit of ’45 if Clement Attlee’s goal was to balance the books. There would have been no NHS, new Welfare State, new council houses and unemployment wouldn’t have dropped to 440,000 in 1950, after only five years of the finest Labour government ever. In fact the finest government ever.

We need spending to get people to work and the economy growing. You don’t need a crystal ball to see where we should be going. We can find the way ahead by reading the history books. (pp. 309-12).

He states that they’re not just his ideas, but have been discussed for the last 10 or 20 years in the Bolsover constituency.

I have some caveats. I don’t like the attack on faith schools, having been to an Anglican faith school myself, and I don’t share his euroscepticism. But other than that, I think he’s absolutely right. Thatcherism has done immense damage to this country. Now, after thirty years of it, it is long past the time it should have been discarded.

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.

Private Eye from 2011 on the Corporate Sponsors of Cameron’s Outsourcing Policy

March 15, 2016

Private Eye ran this article in their issue for 22nd July – 4th August 2011, on the outsourcing corporations sponsoring the conference at which David Cameron released his policies, and the massive layers of corporate bureaucracy involved, as well as the way the taxpayer is expected to pick up the pieces for commercial company’s failures.

Will It Workfare?

When David Cameron launched his “Open Public Services” white paper last week, he did so at a conference arranged by a think-tank funded by the very firms who will benefit from the privatisations his document proposes.

Cameron unveiled his plan at a Canary Wharf event hosted by “Reform”, a right-wing charity funded by business “partners”. Cameron and his ministers regularly appear at Reform events; and the PM proposed “releasing the grip of state control and putting power in people’s hands”.

The list of Reform’s backers suggests who those people will be. They include leading hospital privatiser General Healthcare, prisons and schools firm G4S, cleaning and catering outfit Sodexo and all-purpose giants Serco and Capita. Telereal Trillium, which already gets £284m a year for running government properties, also funds Reform, as does PA Consulting, which makes millions as an adviser on several privatisations.

But will the outsourcing plan actually work? given how existing arrangements are panning out, it seems unlikely.

Days before the white paper, the Department for Work and Pensions quietly published some research on the previous government’s “welfare-to-work” outsourcing scheme, which pensions secretary Iain Duncan Smith will soon expand with a new “work programme”. The model involves layers of bureaucracy that would be derided in the public sector; first “prime providers” creaming off the fees, then subcontractors doing the leg work. And it’s not going well.

The DWP report reveals that, so parlous is the economics, “60 per cent of subcontractors have sough financial assistance from their prime provider”. As for the notion of the private sector bearing the risk, the researchers record: “The 23 per cent of subcontractors receiving guaranteed referrals from prime contractors are much more likely to feel financially secure.” When the insecurity of any of the 77 per cent translates into failure, the taxpayer will pick up the pieces.

Perhaps more revealing than the research is the fact that it was conducted by PricewaterhouseCoopers. With the inside track, PwC last month withdrew its bid to act as a prime provider and subcontractor on IDS’ new work programme.

PS: The work scheme is at least providing jobs for former Labour ministers.

Jim Knight, given a life peerage after losing his South Dorset seat in the 2010 general election, is a former employment minister who last month became a non-executive director of Alderwood Education.

This company was launched specifically to cash in on the Duncan Smith initiative; its executives saying that “welfare to work is a huge growth opportunity”. Well, it has been for Lord Knight, who until recently was an opposition employment spokesman in the upper chamber and now joins a gaggle of other ex-Labour ministers in the work programme field. They include David Blunkett (A4E), Jacqui smith (Sarina Russo and Angela Smith (Vertex).

I’ve already written pieces about the malign influence of Reform on the government and its vile policies. I can also remember reblogging pieces from Johnny Void as well as posting bits from Private Eye about how these firms were indeed failing, and having to be bailed out by the taxpayer after aIDS’ wretched welfare-to-work programme spectacularly failed to get people into jobs. Of course, the whole point of these organisations is not to combat unemployment, but to give the illusion of doing so, while giving work to the Tories corporate donors.

Demonstration Tomorrow Against The Security and Policing Trade Show 2016

March 8, 2016

There’s going to be a demonstration tomorrow against a police and security industry trade expo at 5 O’clock in the afternoon. There have already been posters put up across London, showing a woman holding a placard explaining that despite being an elected member of the London Assembly, the police deemed her such a threat that the spied on her for ten years.

Mike over at Vox Political has a piccie of the posters, and quotes the organisers of the demonstration on their reasons for calling it. They state:

“Behind closed doors, the Home Office is hosting a three day shopping spree. Governments, police forces and military delegations from around the world can buy all the necessary equipment to support violent militarised policing, aggressive border controls and oppressive surveillance operations.

“Organised far from London, it provides a “discreet environment” for hundreds of companies who want to “display products which would be too sensitive to show in a more open environment”. Companies such as Serco who make a fat profit from the inhumane detention of thousands of refugees in centres like Yarls Wood; or weapons companies like BAE systems whose business is dependent on human suffering and continuous wars.

“The heavy policing of borders, militarisation of police, increased surveillance of civilians and high military spending do not improve security and they do not make any of us safer. They make the world a more dangerous place and we need to resist all of it.”

(My emphasis).

Mike’s article can be read at: http://voxpoliticalonline.com/2016/03/08/want-to-know-why-these-posters-have-started-appearing-theydontmakeussafer/

The organisers have a home page on Facebook at https://www.facebook.com/events/712863342183693/

Not being a Londoner, I have no idea who the woman in the photograph is. All I can say is that she looks White, of mature years, and entirely ordinary. Which I believe is the point. She does not look as if she belongs to any suspect ethnic or religious group, though it would be an example of the Met’s racism if they had unfairly spied on a Black or Asian person for the past decade, simply because of their ethnicity; or if it was a gay man or woman.

These are the merchants of death, and the industrial beneficiaries of the massive expansion of the surveillance state and the increasing diminution of the circle of freedom Brits now enjoy. The explanation includes references to Yarls Wood detention centre. That was the place, if I recall correctly, that was hit by riots a few years ago due to the inhuman and brutal treatment the detainees received at the hands of SERCO. I believe one person may even have been killed by a SERCO guard, thus provoking the disturbances.

As for BAE, they were caught several times by Private Eye trying to sell electric batons and riot shields at arms expos to those lovely, entirely democratic countries in the Middle East, with excellent human rights laws like Saudi Arabia. Such weapons are illegal under international law. And if they’re prepared to sell them to the Gulf Arab states, you wonder if they’re also prepared to secretly sell them to the government, especially after they’ve contributed to handsomely to Tory coffers over the years. And Cameron returned the compliment when he visited their factory in Wharton, where he boasted how he had sold ‘wonderful things’ to the bloody despots of the Middle East.

This is the civilian end of the military-industrial complex, and like the military, they don’t promise peace, but more conflict, suffering and bloodshed. And they are a continuing threat to traditional British freedom.

Private Eye: Economics of Outsourcing Demand Overcharging

February 15, 2015

This is another old story from Private Eye, this time from their edition for 26th July – 8th August 2013. This examines the scandal of the major government outsourcing companies overcharging the government for their services. The Eye concludes that the economics of outsourcing are such that the companies really have no chance of making a profit, except by overcharging.

Scandals such as overcharging by the taggers at G4S and Serco and dodgy job placements by A4E, not to mention appalling incidents like the death of deportee Jimmy Umbenga at the hands of G4S, raise the question of whether outsourcing is not simply a rip-off for taxpayers.

Governments repeatedly claim to make huge savings by awarding contracts to private firms on the strength of bids that come in way below existing public sector costs. Figures obtained by the Eye for the outsourcing of Birmingham prison to G4S in 2011 for example, show the Ministry of Justice expecting to shave £139m off what would have been the £610m cost of running the prison itself over 15 years, an expected 23 percent saving.

At the same time G4S’s accounts show that it only satisfies the stock market if it makes a gross profit margin, ie return on outsourcing contracts, of more than 20 percent. For such numbers to work, the actual cost of providing a once public service must fall by more than 40 percent when taken over by the private sector.

Even those who swallow the line about greater private sector efficiency (and not many who have dealt with the companies do) would recognise this as impossible. The result is that outsourcers simply must overcharge or under-deliver. Just as it is gradually dawning that the banking industry was – maybe still is -implicitly corrupt (relying on “mis-selling” and rate-rigging, etc, to hit its returns), so too looms into view the great outsourcing ramp.

This reinforces my opinion, and those of commenters like Jeff3, that outsourcing and public-private partnerships aren’t about saving the taxpayer money. They are about giving government money to subsidise their friends, partners and employers in business.

It’s intrinsically corrupt and economic. It should be discontinued immediately.

Vox Political: Capita and More Outsourcing Corruption

February 12, 2015

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/.

DPAC Protest Against SERCO 8th May

May 4, 2014

DPAC are also organising a protest against SERCO and other outsourcing companies at SERCOS AGM this Thursday, 8th May. The protest is scheduled for 10.30 – 11.30 am, outside the office of Clifford Chance LLP, 10 Upper Bank Street, London £14 5JJ.

See here for further details.http://dpac.uk.net/2014/04/action-against-serco-thursday-8th-may-london/