Distorted Thinking

No prizes for guessing that the blog returns to one of our favourite topics, that of G4S and the astounding news that leaked yesterday that they had offered to repay the government £24.1million in respect of the electronic tagging contracts. Playing hard ball, the government have refused to accept the offer. 

First off, I love the amount. A round figure, say £25 or £24 million would imply you'd just plucked it from thin air, but £24.1million cunningly gives the desired impression that you've really studied the books and totted-up the amount of over-payment. Clever that.

Secondly, lets recall what the reaction of G4S was when Chris Grayling first stood up in Parliament and made those staggering accusations that the dead had supposedly been tagged, along with guys long-returned to prison. G4S responded angrily that they had fulfilled the terms of the contract and I speculated at the time that this robust response was probably based upon their full knowledge of how piss-poor the drafting of the contract was. 

Anyone working in the criminal justice system will be aware of the legendary inadequacies of the computer systems and their inability to communicate with each other. The guys who drafted the contract down at MoJ HQ wrongly assumed that it all worked perfectly and with complete confidence told G4S they would be told who to tag and between what dates. They are a business that makes profits, not a public service, and so any lapses in the information flow were clearly viewed as opportunities to make money - a bit of seriously distorted thinking there guys that would get you on an ETS course, or similar!  

This contribution from yesterday nicely sums things up:-

What really gets me about the reporting on the G4S billing-for-tagging saga is that phrase "wrongly considered itself to be contractually entitled to bill for monitoring services when equipment had not been fitted or after it had been removed". Until the hoo-hah was raised there was no consideration by G4S about whether there was an ethical dimension to that billing, almost a sense of 'the MoJ were stupid enough not to tie the contract wording down so they shouldn't complain if we exploit it'. 

As others have pointed out, if the MoJ can't get it right on something which should have been easy to quantify, what confidence can we have in their ability to negotiate a water-tight contract about outcomes which are so much harder to quantify? On past evidence we certainly cannot rely on a profit-driven entity not to exploit poorly written contracts.

This really gets to the nub of the problem about trying to privatise complex services such as probation. How on earth can it be measured and accounted for in any meaningful way? Can you really legislate or write into a contract a duty of 'candour'  Common sense says not. This article in the New Statesman argues that we've simply got to find a new model if we remain determined to carry on 'reforming' public services.

With G4S, Serco and others due to get a sound thrashing today in Parliament as the whole subject of 'outsourcing' gets examined, and with government now utterly dependent on these companies, Francis Maude in the Cabinet Office is beginning to realise that things are getting a little out of hand, as reported here in the Independent:-

Allegations of fraud against G4S and Serco will not stop the Government from outsourcing lucrative new public sector work to the companies, the minister in charge of contracts says today.

The Cabinet Office is currently reviewing 28 contracts held by G4S and Serco worth around £9bn. The review follows allegations they systematically overcharged the Ministry of Justice millions of pounds for electronic tagging contracts over many years.

But in an article for The Independent, Francis Maude, the minister in charge of the review, indicates that he does not want it to result in either company being prevented from bidding or winning more work.

Instead he says he expects the firms to emerge “renewed and stronger” from the process and confirms that the Government is preparing to outsource more public-sector work before the next election. “People ask if our reviews of contracts are Government ‘getting tough’ on suppliers who had it too easy for too long,” he says.

“It’s not that simple. Question marks about their performance are not good for any of us. Our reviews into G4S and Serco’s contracts are rigorous and extensive. But when they report we will move on quickly.”

Mr Maude’s comments suggest that ministers are trying to draw a line under the damaging row with the companies over tagging contracts.

Privately, senior Government sources admit there is a “danger of attacking these companies too much” and that there are fears in Whitehall that the row could discourage both Serco and G4S from bidding for future work – making future outsourcing less competitive.

Mr Maude makes clear in his article that the Coalition will “not step back” from the “outsourcing marketplace” claiming it will provide “savings for taxpayers” and “drive up productivity”. Today, executives from both Serco and G4S will face a grilling by MPs on the Public Accounts Committee.

They are expected to be asked about a National Audit Office report, released today, that found both contractors continued charging the Ministry of Justice for months or years after electronic monitoring activity had stopped.

With privatisation of a public service such as probation, measurement and targets become an essential part of the payment and accountancy system. Yesterday we had two reminders of where targets get us - the Staffordshire hospital scandal and police fiddling the figures in order to 'reduce' crime. When are we going to learn? When are we going to stop this TR nightmare omnishambles? When are we going to stop punishing a well performing public service like probation?