The Conservatives’ ideological commitment to “public sector bad; private sector good” is costing us all. It is what drives their privatisation and outsourcing instincts.
When it is combined with ‘light touch’ regulation and contract management – with inadequate resources being committed to tender assessment and contract monitoring – we end up with poor value-for-money, service specifications not being delivered, incompetent directors being paid millions before they walk away from the disasters they have left behind, and shareholders extracting millions in dividends whilst the public picks up the cost of their failure to pay appropriate pension contributions.
There is still a long, long way to go to get to the bottom of the Carillion collapse. Amongst others, the Insolvency Service and the Official Receiver are still investigating. The £5.2bn-turnover company collapsed owing banks about £1.3bn. It had just £29m of cash and a £600m pension deficit. About 3,000 people were made redundant, although 14,000 jobs were saved after contracts were shifted to other providers.
When stories circulated that Carillion’s sub-contractors on government tendered projects were not being paid on time, more questions arose. It was then revealed that Carillion was not including 30 day payment clauses in its public sector contracts with subcontractors, which is required by the Public Contract Regulations. If the Government did not detect this behaviour by one of its biggest strategic suppliers, what confidence can any of us have in its overall approach to public procurement?
Over the last year, the share value of another big government contractor, Interserve, has fallen by 90%. It’s in financial crisis, desperately trying to restructure its £650m debts. It has more than £1bn of live public sector contracts with police forces, universities, hospitals, transport executives, local authorities and central government departments.
The Government recently said that they "do not believe that any strategic supplier is in a similar situation to Carillion…” and, throughout the last few months, has continued to award new contracts worth millions, despite the company’s solvency being in serious question.
What cannot be questioned is that its Purple Futures subsidiary has simply failed to perform in its delivery of probation services in five privatised Community Rehabilitation Companies (CRCs), where it is meant to be managing a total of around 40,000 “low and medium” risk offenders for our public protection.
You might think that awarding new public sector contracts to a company in financial crisis and with a track record in failing to deliver what is specified is unacceptable. I agree.
So, what do you think of the latest revelation about this government’s procurement?
As the government thrashes around desperately trying to arrange emergency measures in case we crash out of the EU without a deal, it has arranged a £13.8m contract to run additional ferries across the Channel between Ramsgate and Ostend with a new company called Seaborne Freight, despite it never having run a ferry service nor managed shipping arrangements before.
Is it any surprise that local Conservative Councillor Paul Messenger asked “It has no ships and no trading history, so how can due diligence be done? Why choose a company that never moved a single truck in its entire history…?”
Good questions!
When it is combined with ‘light touch’ regulation and contract management – with inadequate resources being committed to tender assessment and contract monitoring – we end up with poor value-for-money, service specifications not being delivered, incompetent directors being paid millions before they walk away from the disasters they have left behind, and shareholders extracting millions in dividends whilst the public picks up the cost of their failure to pay appropriate pension contributions.
There is still a long, long way to go to get to the bottom of the Carillion collapse. Amongst others, the Insolvency Service and the Official Receiver are still investigating. The £5.2bn-turnover company collapsed owing banks about £1.3bn. It had just £29m of cash and a £600m pension deficit. About 3,000 people were made redundant, although 14,000 jobs were saved after contracts were shifted to other providers.
When stories circulated that Carillion’s sub-contractors on government tendered projects were not being paid on time, more questions arose. It was then revealed that Carillion was not including 30 day payment clauses in its public sector contracts with subcontractors, which is required by the Public Contract Regulations. If the Government did not detect this behaviour by one of its biggest strategic suppliers, what confidence can any of us have in its overall approach to public procurement?
Over the last year, the share value of another big government contractor, Interserve, has fallen by 90%. It’s in financial crisis, desperately trying to restructure its £650m debts. It has more than £1bn of live public sector contracts with police forces, universities, hospitals, transport executives, local authorities and central government departments.
The Government recently said that they "do not believe that any strategic supplier is in a similar situation to Carillion…” and, throughout the last few months, has continued to award new contracts worth millions, despite the company’s solvency being in serious question.
What cannot be questioned is that its Purple Futures subsidiary has simply failed to perform in its delivery of probation services in five privatised Community Rehabilitation Companies (CRCs), where it is meant to be managing a total of around 40,000 “low and medium” risk offenders for our public protection.
You might think that awarding new public sector contracts to a company in financial crisis and with a track record in failing to deliver what is specified is unacceptable. I agree.
So, what do you think of the latest revelation about this government’s procurement?
As the government thrashes around desperately trying to arrange emergency measures in case we crash out of the EU without a deal, it has arranged a £13.8m contract to run additional ferries across the Channel between Ramsgate and Ostend with a new company called Seaborne Freight, despite it never having run a ferry service nor managed shipping arrangements before.
Is it any surprise that local Conservative Councillor Paul Messenger asked “It has no ships and no trading history, so how can due diligence be done? Why choose a company that never moved a single truck in its entire history…?”
Good questions!
