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outsourcing the solution the country needs?

(29 Posts)
nanaej Thu 11-Jul-13 18:32:39

Just heard that two private companies have been claiming for non existent prisoners....

whenim64 Thu 11-Jul-13 19:17:18

G4S (yet again) creaming off profits, and now Serco. It makes me hopping mad. We had this with Morrisons (not the supermarket) charging outrageous costs for catering and building management in probation and other publlc sector organisations. 500% mark up on toilet rolls, room keys, light bulbs, sending workmen from Norwich to Manchester to refill a fire extinguisher, 150 miles to change an office lightbulb, failing to send workmen to fix broken security locks that were supposed to keep dangerous offenders curfewed. We stopped notifying them about lightbulbs, keys and toilet rolls and bought them on the same street where we were sited. Whistle blowers from their own organisation and the Home Office were told cancelling the contract early would cost millions, so they ignored it!

nanaej Thu 11-Jul-13 19:21:53

I am no economist but I see that the purpose of a private company is to make a profit. If the business is not producing widgets but offering a service and the service is only used by the government and the government is broke then I can't see why I would want to offer the service unless i could see a sneaky way to make a profit!

whenim64 Thu 11-Jul-13 19:25:27

There's ethical and there's corrupt!!!

nanaej Thu 11-Jul-13 19:29:22

I agree when it is doubt it will turn out to be a 'computer error' and not a deliberate attempt to defraud the taxpayer!hmm

FlicketyB Thu 11-Jul-13 19:44:05

Like PFI contracts for hospitals. Now our health is being compromised and Trusts are struggling to cut costs to pay extortionate sums of money to the company's who built them, or funded them.

Mrs Thatcher always used domestic house keeping analogies for government. Can I add another, borrowing money to pay for anything is always more expensive than paying cash. whether you are looking at pay day loans, credit cards or PFI.

wisewoman Thu 11-Jul-13 19:54:55

Did anyone hear Eddie Mair (my hero) asking Francis Maude about G4S and Serco tonight on PM. I was cheering him - go Eddie! Francis Maude sounded like an idiot when he said even though they knew there were problems G4S was still allowed to bid for new government contracts. I despair of it all but am always cheered by Eddie who says the things I want to say in a lovely calm and well mannered way.

JessM Thu 11-Jul-13 20:07:42

I've heard that PFI schools are pretty difficult to work in - you have to pay a fee to hire the hall for a parents evening, that kind of thing.
Serco and G4S are huge companies with fingers in a vast number of public sector pies. Within a kilometre of my front door - the park is mowed and litter picked by serco and a juvenile detention centre run by g4s
They are both pretty low profile but have made a killing during the outsourcing boom.
They are more cost effective than public sector because people get paid less, and have much less generous conditions of employment (pensions etc)
re the tagging scandal hmm i guess there is a big pressure inside the company on the managers running these contracts to deliver a profit and not a huge desire to waste money auditing what they are doing...

Mishap Thu 11-Jul-13 20:33:10

"Outsourcing" - what a grim word. What a stupid idea! It is wrecking our public services.

nanaej Thu 11-Jul-13 21:15:22

Don't be silly mishap competition is healthy and raises standards!

whenim64 Thu 11-Jul-13 21:37:21

I don't remember seeing many raised standards when the public sector organisation I worked in decided to 'outsource' to private companies that didn't understand what we needed from them. Turning up at court to find G4S didn't have relevant paperwork, brought the wrong prisoner (really!), didn't have a driver so couldn't come, didn't supervise prisoners in transit to be sure they didn't harm themselves. Why on earth do we have to apply profit to such services that were previously being managed well in-house? Public sector services aren't businesses, and can't be run on unethical business models. They can be run with the notion that it's tax payers' money being spent, so accountability and thrift are a given, but not with the knowledge that a large slice of profit is creamed off at every level. Why not just create honest jobs for employees in-house, instead of TUPE-ing them across to private jobs on lower wages, so business men can scoop up large profits?

Tegan Thu 11-Jul-13 21:37:42

Our water supplier is going to be taken over by a foreign company I believe. How can someone make a profit on water and, iif they do isn't it unethical [unless they use the money to help the environment in some way?].

whenim64 Thu 11-Jul-13 21:41:56

....and another thing! You just reminded me, Tegan. Morrisons is part of a portfolio of companies owned by a French conglomerate. Taxes paid outside the UK! Grrrr!

JessM Fri 12-Jul-13 06:04:14

Water privatisation tegan seems to have been the only privatisation success story - before it happened water quality was variable, mains were corroding, rivers and bathing beaches were polluted.
I'm not sure the idea translates well into poor countries. Depends how well regulated and how water is charged for.

Mamie Fri 12-Jul-13 06:28:40

Not forgetting all the problems and costs incurred by paying the people working for some of these companies very, very low wages.
I very much doubt that the country makes any saving at all, but some people get very rich on the profits.

Aka Fri 12-Jul-13 06:50:45

I've never understood why private companies can make a profit and nationalised ones rarely did. If there's a profit to be made then it ought to be going back into the national purse.

Mamie Fri 12-Jul-13 07:08:07

Oh that is easy Aka. Lots of people will tell you how "inefficient" and "wasteful" they were. Unlike those shining examples Serco and G4S.
Look at the railways for example. In France you have a state run railway, generally agreed to be fast, efficient and reasonably priced. Money constantly ploughed back into development of the network. In the UK, different train companies, confusing fares, hugely expensive, lack of investment in network; got to be a better way of doing things.....

JessM Fri 12-Jul-13 15:53:04

aka : public sector pay, public sector pensions, public sector conditions of employment - it is far cheaper for Serco to employ a bin-person on a temporary contract than for LA to give one a permanent job. Not saying I agree with it , but that is the harsh reality.
mamie could you clarify the extent to which the French railway system is subsidised? It would appear from this wikipedia entry that it is a very successful state owned company that runs a number of businesses all over the world. So maybe transport in France subsidised by these profits. Most state owned railways are nothing like as entrepreneurial and are heavily subsidised by taxpayers. As British rail was here.

Private companies also contort themselves into elaborate arrangements in order to "keep permanent headcount down". They might have a minority of permanent employees in their head office along with a majority of people who are technically employees of Serco, Reed or similar. It all started in the private sector.

FlicketyB Fri 12-Jul-13 16:13:31

The problem with nationalised companies was that much of their policy and management was dictated to them by civil servants and because they were seen as an arm of government they weren't allowed to do anything that might reflect badly on government but would make them more efficient and profitable, like making people redundant or cutting a loss making service.

I worked for British Gas on the overseas side before and after privatisation. When I joined the company all work overseas had to be done to BG standards, whether the client wanted it or not, even though the high spec gold-plated UK standards were sometime not appropriate to the country seeking assistance or the country had an excellent set of standards of its own. Once the BG was privatised the department had much more flexibility and business expanded.

Mamie Fri 12-Jul-13 16:31:32

Jess I think that the RFF (network rail?) is subsidised but SNCF makes enough to cover that and also effectively runs all their services (something to do with EU competition law.) SNCF is 100% state owned. They are of course ruthless about putting new lines where they want them. I think this is the origin of the "you don't ask the frogs when you are draining the pond," remark, which caused much merriment to the English speakers.

Mishap Fri 12-Jul-13 18:21:31

I spent 25 years working in the public services and watched what happened when privatisation and outsourcing arrived - lowered standards, lack of commitment, lack of continuity, client/customer confusion.

No naneaj - I am not being silly. Sad, yes, but silly, no. It is not usual on this forum to dismiss others' views as "silly." We mostly listen and discuss.

Outsourcing and competition do not save money. Private firms rip off the public services.

Business models are not working in public services, but it is going to be impossible to turn that particular train around.

To give a recent example. I spent a long time earlier this year organising care for my elderly father at home. Several different companies were involved: one to provide equipment; one to provide incontinence devices; 4 different companies to provide care - I could go on. We are educated people but we did not know whether we were coming or going; and even when he went into a home, the staff there said that it is impossible to get what people need, as one company passes the buck to another. It truly is nonsense - when I was working in social services the care we offered and that the NHS community services offered was streamlined and simple and everyone knew where they were.

Outsourcing is a move based on political doctrine and not an economic or efficiency move. It is certainly NOT a way to get better services for those on the receiving end.

Mamie Fri 12-Jul-13 19:06:53

Not for me to speak for nanaej, Mishap, but I never doubted for one minute that she was joking / being ironic.
Completely off thread, but hope your holiday was OK and all went smoothly.

whenim64 Fri 12-Jul-13 19:11:08

I thought nanaej was joking, too? smile

Mishap Fri 12-Jul-13 19:29:14

Sorry nanaej if I misunderstood - it has not been a great day. Friend's funeral. Sense of humour failure here - only temporary I hope. Apologies++

Holiday was a very mixed blessing for a lot of reasons, but we made the best of the difficult bits and enjoyed the good bits - and we are home safely and the sun is shining so onwards and upwards.

I now have to settle down and create a 4 metre hessian mandala for my DD - just don't ask! The things we do for our children!!

JessM Fri 12-Jul-13 19:34:37

That degree of fragmentation sounds crazy mishap Does not bode well for health service.
However perhaps the current debacle with G4S and Serco will give a few people in the corridors of power some pause for thought (not hopeful though)
Trouble is that you need resources to monitor and check the outsourced contracts hmm Hidden costs - or else it does not happen.