Let's see Britain taking public services back from Serco and G4S – so they can be run properly
The public services provider Serco is in
trouble after losing its two top staff in two months then being ruled out of a
contract to run three prisons. Photograph: Ian Nicholson/PA
Serco is a company in
trouble. Under investigation by the Serious Fraud Office over the electronic
tagging scandal, its
chief executive jumped ship last month, and last night it jettisoned
its UK boss. Today, it was ditched as a contender to run three prisons in Yorkshire.
But I am not complacent. While there are welcome signs the tide is slowly turning against the likes of Serco – government auditors are probing the role of private companies in running an increasing number of our public services, and their bosses faced MPs this week – the government is still committed to outsourcing, writing contracts in indelible ink.
Despite G4S's Olympics security
fiasco and the revelations about overcharging for tagging offenders, Francis
Maude, the cabinet office minister, is clear that he wants the companies "to
emerge renewed and stronger". How many more chances can such companies be
given before we say: do you know what, you have failed even on your own terms;
the party is over?
But this is one of the
central problems of privatisation. There is no real risk. The bosses claim the
risks they take are reputational and financial, citing share prices and the
chances of winning future contracts. This is nonsense. In its final analysis of
the Olympics saga, G4S
described the way it was bailed out by the public sector as "successful".
Now it has been handed a contract for
the 2014 Commonwealth Games in Glasgow.
Time and time again,
privatisation – which now comes in many guises – is shown to be less efficient
and more costly, and without a genuine transfer of risk. The east
coast mainline rail franchise, the upgrade of London's
underground and even translation services in courts,
were all examples of private sector failure bailed out by taxpayers.
Not only are these profits
obscene, so is executive pay. A few years ago, some of our members who work for
Capita, campaigning for a wage they could live on, were handing out leaflets
outside the company's headquarters when the chief executive, Paul Pindar,
strolled in. After reading a leaflet, he took umbrage at a claim about his
eye-watering pay and perks package and went into the building to fetch his
payslip, which he then brandished in front of these low-paid workers to prove he
earned "only" £14,700
a week – what they were paid for a full year.
So I welcome the fact a
spotlight is now being trained on Serco, G4S, Capita and others. The National
Audit Office is concerned that some may be "too big to fail". I agree, but I
would go further and say let them fail, and let us bring these services back
into the public sector where they can be properly run, with the books fully
scrutinised, without hiding behind bogus "commercial confidentiality", and fully
accountable to the people whose taxes pay for them.
For once, I half-agreed
with Maude when he wrote this week that "public services are too important
to too many people" – but I only half-agreed because he went on to say, "to be
allowed to be the monopoly of the public sector". Now by "people", he presumably
means shareholders, because there is no public interest in propping up the
troubled Serco and the oligopoly of which it is a part.
