Saturday, 26 October 2013

Heads Roll - Update

Following on from this morning's post, I can't resist pointing towards a bit more about Mr Hyman's departure from Serco ahead of the SFO investigation and as reported here in the Independent today:-

Mr Hyman, a 50-year-old devout Christian who donates 10 per cent of his annual income as a tithe to his local church, had held the top job at Serco for 11 years and worked at the outsourcer for 19.
He is to receive a pay-off of a year's basic salary plus benefits worth £1.1m. He also departs with a pension pot worth £2.2m, paying out £128,000 a year, and 917,000 shares in Serco, worth £5.1m.
"He believes that the company will have the greatest chance of success with new leadership at the helm and he has, therefore, decided to step down with immediate effect," Serco said. It is now looking outside for a new chief executive.
Shares in Serco rose 5p to 557.5p on news of Mr Hyman's departure, which came one day after the UK boss of rival Government contractor G4S – also involved in the tagging scandal – resigned. The outcome of an inquiry into Serco and G4S's tagging contract is expected next month.
Serco said it wanted to demonstrate "substantive evidence of corporate renewal". Ministers are currently deciding whether to blacklist Serco from future central Government contracts, which provide about a quarter of revenues.
The outsourcer also plans to split its UK & Europe division in two, with one focused solely on Government contracts and the other on the public sector. Serco is also hiring three more non-executive directors and a group general counsel, establishing a board committee for corporate responsibility, and appointing full-time ethics officers to each division.
The chairman Alastair Lyons said its actions "should leave no one in any doubt about how seriously Serco takes these issues".
A Government spokesman said it would take full account of the changes and called them "a step forward".

According to the Guardian:-

But Keith Vaz, the Labour MP who chairs the home affairs committee, said: "I am surprised by the resignation of Mr Hyman who has always maintained that there is nothing untoward with the contracts that Serco holds with the government, even after the company was referred by secretary of state for justice to the SFO."

Underlining the scale of the task involved in repairing relations with the government, Alastair Lyons, the Serco chairman, said a new chief executive would be appointed from outside the group. In the interim, Ed Casey, head of the Americas division since 2005, will take the helm.
The management upheaval came less than 24 hours after rival G4S, also caught up in the controversial electronic tagging fiasco, parted company with the head of its UK and Irish operations Richard Morris. The G4S chief executive, Nick Buckles, left in May.
Both companies are being subjected to a government-wide review of every one of their contracts and have been ordered to prove they are taking steps to improve their operations.
Serco, which was transformed into a major international firm under Hyman, is embarking on what it describes as a "renewal programme".
The UK and Europe division is to be split in two, with one section to focus on the "UK government customers" and the other on activities in the wider public sector.
Three new non-executive directors are to be appointed along with a new general counsel. A board committee for corporate responsibility is also to be created.
Andre Spicer, professor of organisational behaviour at Cass Business School, said Hyman may have become a scapegoat. "Typically, CEOs at companies that face a scandal are often pushed out to clear the air. This tends to lead to some short-term confusion, but pays off in terms of an increase in corporate performance. But in some cases it can be a fatal distraction where companies feel they have addressed the big issues by changing the leader."
I'm often quite a stern critic of twitter as typically being filled with platitudinous bollocks, endless inconsequential trivia or mind-numbing PR puff, but occasionally there are gems. Francis Crook, CEO of the Howard League for Penal Reform, usually only tweets when she has something useful to say, and I love this earlier today:-
told SFO to link tagging investigation to false data in NHS cornwall, as looks like systemic corporate fraud I wrote to SFO urging a little more vigour in Serco/G4S investigation, talked to them yesterday - changing a few top people is irrelevant, it's profiteering from imprisoning people that's morally corrupt



    I agree with Francis Crooks tweet, but for me its important that the gaint outsourcers 'shady dealings' are considered in a global context and not just on UK government contracts.
    Its one thing to become transparent with government contracts within the UK, but if the contractors global reputations are in tatters then the government should not entertain them
    Some of these outsourcing companies are being accused of dishonesty in every country they get involved with.

    1. "Four of the government's biggest suppliers - G4S, Serco as well as rivals Capita and Atos - have been called to appear before a committee of British lawmakers next month for questioning about the outsourcing sector.

      Analysts at Jefferies said Serco's move to split its UK & Europe division would allow greater transparency around profits from its contracts - a key government priority.

      Serco, which makes annual revenue of around 4.9 billion pounds, has continued to win deals in its other markets, such as a 335 million pound tie-up to run Dubai's metro system, though it has encountered some problems abroad.

      It is due to appear in the U.S. House of Representatives to explain its part in the troubled rollout of the "Obamacare" healthcare laws, though it is not accused of any wrongdoing."

  2. Mr Hyman is clearly going to struggle to decide if he heats his home or eats-poor soul. It is unbelievable that with all this going on that both companies are going to be allowed to put bids in with TR.

    1. It seems like these companies are getting their mitigation sorted out pre sentence.
      They have spoken to the staff , they will have seen the investigators reports and they will KNOW they are up the creek without a paddle. Now they will pass the blame onto the departed Hyman and Morris (who will be happy to shoulder any blame with such hansom golden goodbyes).
      So the Minister will thus receive the report and note the "renewal", his decision of course will be to let them in , after all there is nobody else to shoulder the burden! So there will be high minded words and a public dressing down and slapped wrist - Both will the get a second chance when 35 Trusts never even had a first chance....
      It is a disgrace and probation , fire brigade, police, social services,health are all subject to this vindictive TORY idealogy of smaller state , low cost , low quality service delivered at HIGHER cost to the exchequor.
      Sadly the same government and press barons who sponsor them have sold the country a vision of labour overspending (despite Tory plans to maintain their pre crash spending plans) of the feckless poor ( even when 75% of claimants are working) of public servants on higher than private wages ( despite tax and DWP frontline staff on <17k per annum) of gold plated pensions ( remember the pension holidays of several years by companies in the 80's/90's whilst the LGPS continued to be prudent) and of a competition is best mentality ( remember if capitalism worked well , we would have fewer banks , airlines,railways who have failed but yet get rescued by the Government).
      So the likes of G4S, A4E,and Serco will bid and win the CRC , they will slice and dice the staff and put the general public at risk of serious harm. The harm will be from those who are committing DV, Child Abuse, Sexual Assault and Violence and are not yet considered high risk - We know those high risk cases start off committing lower levels of crime
      (remember animal cruelty can be pre cursor to more serious harmful events) and so if there are problems in the future with these companies - we have evidence that they will not support their staff, wriggle away from responsibility and simply take the money - the risk will be left with the poor sod who pays for the service and get absolute sh**e , YOU and ME the taxpayers ......

    2. "The harm will be from those who are committing DV, Child Abuse, Sexual Assault and Violence..." which are offences analagous to the kinds of human rights abuses that global companies are alleged to be committing all around the world.
      DV, Child Abuse, Sexual Assault & Violence are the preferred weapons of bullies and of dictatorships. DV behaviour is simply bullying behaviour. Rape has always prevalent in times of conflict. Other degrading forms of sexual abuse are prevalent during conflict (viz-the abuse of detainees at Abu Ghraib). Child abuse is prevalent in conflict (Amnesty - "Child soldiers. Worldwide, hundreds of thousands of children under 18 have been affected by armed conflict"). The global companies who seem to be the preferred bidders for public contracts make significant profits in areas of conflict and times of conflict.

      Why not buy up the services that are designed to challenge such behaviours?

  3. NAPO where are you ? All of this going on should be a real gift to the NAPO publicity machine.

  4. Thank you Jim - lateness for appointment was recovered; one of the joys of having a consistently present, locally geographised service provider whose customer orientated interface was switched on. She was very solution focused and the positivity of her outcomeness was gratifyingly helpful. A bit like Mr Hyman's HR team, only it seems he's also won the lottery judging from the numbers quoted. You lucky devil, sir. Just when you were out of a job as well.

    The loss of HF was a truly sad & mortal blow to NAPO - I miss him, certainly - but 'new' NAPO only need to ask him if they can hire his skills, surely? Or is the damage that lasting? Just look at the efforts he continues to make:

    "Last year, the probation service met or exceeded all of the Ministry of Justice's set targets. Figures show that victim feedback in 2011-12 was positive in 98% of cases; that 49% of offenders were in employment at the termination of their orders; that 89% had accommodation; and that 82% of orders or licences were successfully completed during the period. In terms of timeliness of court reports, the service was set a target of 90% – and was successful in 99% of cases. And as far as cutting reoffending goes, the actual rate was better than the national predicted rate. In all but five probation areas, three-quarters of orders or licences were successfully completed." (from Harry Fletcher's comment in The Guardian, Jan 2013 - link:

    That puts Jeremy Wright's TR bollox in its place immediately. Even the first half of that paragraph blows the socks off the "failing probation" argument. The rest of the article deals body blows to the financially-based argument AND raises the notion that its a purely ideological move, a public sector garage sale - "closing down in 2014 - everything must go".

    1. Harry is offering via twitter to help frame questions MP's might like to put during the House of Commons debate next Wed 30th October on the whole TR omnishambles.

    2. I saw that offer in an earlier series of comments, and "good on yer" HF for that offer.

      Sadly my home constituency MP aint right bothered at all (more interested in lining his own pockets long-term by cosying up to a particular industrial interest which the local constituency don't particularly want), nor is the MP for the constituency where I work - he's managed to offer six different reasons for not sticking his neck out to six different requests for support - essentially it boils down to he doesn't want to rock his own political boat. I'd rather he just said "I've got a knighthood, that'll do nicely when the expenses run out, thank you, goodbye."

      If any MPs want an idea for a question, the risk assessment (mentioned elsewhere) is a good one; the use of the commercially sensitive escape route to avoid answering anything about a public service matter is another, plus:
      * the introduction & use of 'pam' - what spec was tendered against, who competed, why was it introduced, how much was the contract worth;
      * why is the MoJ being allowed to make decisions about the employees of Probation trusts across England & Wales? Has anyone explored the legal position of those contracts of employment? They were varied when staff were effectively co-erced into signing away an unlimited contract with a probation area, and re-signing a time-limited 3 year rolling contract with a Trust. My contract of employment does not mention MoJ anywhere. Any pro bono offers from our legal friends to research this (we research many of your higher court submissions in the form of our PSRs - quid pro quo)?.
      * if there are no grounds for the financial savings argument (the cost of TR must have already exceeded any savings they could possibly believe they would make) and no grounds for the failure to perform argument (the medaille d'or), is the MoJ allowed to dissolve a critical public service on purely ideological grounds?

    3. I hear the cost of the "project" alone is £60m !!

    4. Anon at 20.08 - I never knew we were put on '3 year rolling contracts' when Probation Trusts were created - a new one on me -am I the only one that didn't know this?

  5. Pour encourager les autres......

    1. Ok I'm impressed: in order to encourage the others — said ironically of an action (as an execution) carried out in order to compel others to obey or submit

  6. I am sorry but this did make me smile and heaven knows this is all a serious issue, referring to G4S at HMP Oakwood

    "A spokeswoman for G4S told the Sunday Mercury they would look into the allegations that drugs were being smuggled into Oakwood in pigeon carcasses."
    Later she told the Mirror: "Oakwood does not have any issue with drugs being smuggled in ‘via pigeon’, simply because it doesn’t have a pigeons problem."

    Perhaps said with a completely straight face.

  7. Sorry this doesn't quite follow the above theme, and it is a point i made on an earlier thread (25/10). . . but West Yorks PT has been putting together a 'Mutual' bid in partnership with 'Prospects' for several months. It was promoted to front line staff as some exclusive, mutally beneficial, ethical attempt at securing a slice of the CRC pie. I now read that Wilshire PT and Gloucester PT are also making bids for a CRC in partnership with the very same company . . .'Prospects' ! Please someone explain how this can be possible ?.

    1. I think the answer is that any company or organisation can make as many bids as they like because there's no guarantee they will be part of any winning bid.

      Having said that, I'm fairly sure the MoJ have put a limit on the total value of contracts that can be won by any individual company or organisation.

    2. I don't see how Wilts and Good can bid for a CRC when ASPT, due to be in the same CPA, are having nothing to do with a mutual.

    3. Well I guess the bid will be for the whole Contract Package Area, including ASPT, and if they win it will be akin to a 'hostile' takeover of ASPT.

  8. Jim , Maximum of 25% of all business or 3 or 4 seperate "lots" - In theory if you took London that would be all you could take!

    1. There is a limit (25%) to how many any one bidder can be involved in winning, but London is a lot less than 25% - so in theory could win the two largest CPAs. More likely though we will see the same bidders popping up in a larger number of bids - but as part of a consortium. This way the larger players get to control large tracts of geography. That means fewer HQs to run, fewer senior managers and lower costs. Frontline continues to get delivered by various organisations - maybe even some mutuals? Either way any CEO of a CRC stops being in overall charge.


    A couple more of Sercos issues mentioned here.

  10. Surely the main concern with CRCs is the phase AFTER divestment of low/medium probation services ( and staff) to them. We already know that this is the time redundancies and application of reduced terms and conditions are most likely. There would now appear to be the issue of ongoing ownership ie who in the future will end up really owning the divested businesses? If mutuals fail ( especially those linked to debt ridden local authorities) who picks up the pieces ? Who has the financial capability to keep such businesses afloat ? Step forward the Primes again because surely it is unthinkable that the Government would in effect re-nationalise probation services? Oh and I am now hearing we are back to the previous 30/70 split (NPS/CRC) not 50/50 as had been mooted. These are indeed uncertain times.

    1. Yes CRC's can be bought and sold at any time I think, subject to a government 'golden' share if I recall correctly. Failed mutuals or any other failed organisation could indeed be gobbled up by the big boys after all.

      I've heard the split is back to 70/30 - I'm sure somebody knows what they're doing.....

  11. West Yorks PT employees told by senior management 2 days ago that the split is 55% CRC / 45% NPS.