Saturday, 29 April 2017


Clearly nothing much is going to happen whilst ever the nation is in election mode, so possibly we have the chance to wander down rather more different alleys than usual. Whilst away, I see someone flagged up this by Allen White from the New Statesman in June 2016:-

The Shadow State: how to stop outsourcing scandals

The government should be free to outsource work to whoever it likes: but it must be open in its decisions so it can be held accountable when it gets them wrong.

Four years ago, I began to write about outsourcing for this publication. That series of articles eventually became known as "The Shadow State", and this month I’ve published a book compiling many of those reports, along with subsequent work for other publications, to try to make sense of it all.

I didn’t come to the subject back in 2012 with any particular political axe to grind. What motivated me to write about the subject was a simple point: I could see the government was keen to increase the number of services it outsourced – but I couldn’t see why.

Before I began, the scandals around the outsourcing industry had been coming thick and fast. In 2012, Britain had been forced to call in the army to provide security for the Olympics after G4S announced it was unable to deliver its services. Questions were beginning to be asked about other companies, including Serco, Capita, the now-defunct A4e, Atos and others.

If the government outsourced to save money or to get a better quality of service, the circumstantial evidence, it seemed to me, suggested it was failing in its aims. But what really struck me as I began to study the subject, was how many different areas of the state I ended up writing about.

Almost every area of the justice sector - from police to probation via courts and prisons – had been touched by the outsourcing industry. So too had employment and benefits services, health care, social care, not to mention all sorts of less obvious backroom departments – at times it seemed like every service the state provided for the public had been touched by the outsourcing industry.

This was a gigantic change in the way that government operated which had taken place over the last 20 or so years, yet analysis of it – either in official government reports, or advisers’ memoirs and the like – was thin on the ground.

Two other things became clear: first, when problems occurred, more often than not they were born of mismanagement rather than genuine malice or greed. Which was rather exacerbated by the second problem: no one seemed to have a bloody clue what was going on at any stage of the process.

Of course, to talk about “problems” is to downplay the extent of suffering for which outsourcing companies have been, to a greater or lesser extent, responsible. Think of the deaths in youth prisons, in care homes, in the asylum detention system, of the misery inflicted on disabled people by issues with fitness-to-work tests. These incidents are not insignificant.

Are they directly born of the decision to outsource? The direct line of responsibility is often nebulous – sometimes staff appear to be directly culpable; sometimes the system, for which government is ultimately responsible, is more to blame. It remains unclear in a number of cases whether people who have died after being restrained to death by guards working for outsourcing companies lost their lives because of poor government guidelines, or the way in which they were deployed. Often it feels like this muddiness over accountability suits everyone involved.

Without doubt, the state sector has its fair share of bureaucratic cruelty and incompetence. But the introduction of a profit incentive and the lack of transparency about that never fails to add an element of scandal to these tragedies. Only this week we learned that the Home Office would not reveal whether women had been raped in Yarl’s Wood because of "commercial confidentiality".

In part due to the amount of details which are shielded from public scrutiny, lessons are not learned. This takes us to the second point. There is no central intelligence when it comes to outsourcing. Failure is rewarded again and again, primarily because there are so few companies to choose from.

As an example - with G4S and Serco under a Serious Fraud Office investigation over the tagging scandal, the government turned to Capita – which was promptly forced, due to a lack of suppliers, to outsource some of the job to…G4S.

What’s more, the Chinese walls between the companies and the Whitehall officials who contract them are often paper thin – there is little oversight when ministers and civil servants choose to work in a private sector to which they may only recently have given work.

Since my New Statesman series finished, the Conservatives have registered an overwhelming general election victory. The growing scale of government outsourcing has continued apace. Having looked at this subject for years, I've reached a simple conclusion: The government should be free to outsource work to whoever it likes: but it must be open in its decisions so it can be held accountable when it gets them wrong.

The question of how we contract, why we contract, and whether we get value for money when we do has begun to rise to the forefront of public attention. No longer is it the preserve of the political left and no longer is it just about the well-known outsourcing companies. It was all over the headlines following another story I worked on: the collapse of the south London children’s charity Kids Company.

The parliamentary committee that reported on Kids Company felt that there were many lessons to be learned about wider government procurement. Those who watched the hearings would have been stunned to learn the charity had been awarded millions by a government department - the Cabinet Office - whose ministers had visited it once in the last two decades.

Perhaps the tide is beginning to shift. The Government has also made plenty of noises about open commissioning – though whether its actions will match its rhetoric remains to be seen – while the renationalisation of troubled Medway youth jail is something of a precedent in terms of justice, where for years the outsourcing industry has grown without respite.

We live in an age where the public demands greater openness in how government operates. One suspects that if the shroud is ever fully lifted on the outsourcing sector, the things revealed may not be too pretty.

Alan White

Shadow State: Inside the Secret Companies that Run Britain, by Alan White, is published now. Alan's original New Statesman articles on outsourcing can be found here and here.


  1. When the government hand over £millions of public funds to outsourcing companies it makes the public (tax payer) a significant investor in that private company. It makes the public a stakeholder.
    As such, the public should have the right to the same transparency that would be afforded to any private investor or stakeholder.
    Corporate confidentiality is just a cop out clause that facilitates mismanagement of services and funds with no fear of recrimination.
    I feel it's the government that would be more fearful of greater transparency in outsourcing contracts then the private companies.


  2. Just because it's a damn good read, if quite a long one.

  3. COULD the Probation Service have been outsourced / privatised more effectively? The new COMMON SENSE answer is a resounding yes or at least an acknowledgement that mistakes were made. SHOULD the Probation Service have been outsourced / privatised? My answer would be that it was a victory of POLITICAL IDEOLOGY over SENSE.

  4. Getafix, I hadn't considered things from that standpoint before but you are right.

  5. Graylings response to the select committee recently concerning shadey contract deals underlines just how dodgy government outsourcing has become.

    1. How do you make a drama out of a crisis?

      It is a question that many in the higher echelons of HS2 and the Department for Transport may want to ponder this evening after their respective leaders faced a public grilling by MPs over the CH2M saga.

      Both transport secretary Chris Grayling and HS2 boss Sir David Higgins had to face the transport select committee at Portcullis House today, which was headed up by Labour MP Ms Louise Ellman, over the role both public bodies played in the awarding of the £170m deliver partner role for phase 2b of the mammoth railway project.

      However, apart from covering the issues within the tender, which have been reported here, the session highlighted the attitude at both the DfT and HS2 over how contracts are awarded.

      HS2 has remained steadfast in its refusal to re-tender the £170m contract.

      However, while covering the committee session, the most pertinent comment of the afternoon was Mr Grayling’s obscure mention of the value of infrastructure contracts that the government holds – as well as the opportunities that there are with HS2 – after a direct question regarding whether the current procurement process for the phase 2b delivery partner could be open to a legal challenge.

      Mr Grayling said: “There is a huge amount of business to be won with HS2. There is a huge amount of investment taking place in infrastructure in this country, there is a real commercial opportunity for any serious project management organisation which is involved in infrastructure.

      “Sometimes they will win, and sometimes they will not win. Each will learn lessons when they are not successful and apply those lessons to future tenders. We need as a nation need to get on with the job.

      “My message to any contractor working with government is, if you have a legitimate grievance, come to us and we will address it as we have in this case. But please do not use the court system without good grounds because ultimately that does no favours to any of us.”

      No firm was mentioned by Mr Grayling, but many at Mace would have taken note of the transport secretary’s comments.

      As Construction News also revealed today, Mace has been vocal in putting over their misgivings over the tendering process for the phase 2b delivery partner role at HS2.

      In written evidence to the select committee seen by CN, the firm accuses HS2 of “misleading taxpayers and the press” over the client’s claim that the procurement of phase two’s development partner contract was “robust and fair”.

      To state the obvious, legal action is always ‘unhelpful’ to at least one party, that is the nature of legal action.

      However, despite best intentions, contract disputes happen. This is a fact of life both in the construction sector as it is across almost any other sector.

      After all, it was Mr Grayling’s own department, albeit before he took charge as minister, which became embroiled in a legal row with train operator Virgin Trains in 2012 over the award of another public contract – the award of the London to Scotland West Coast Mainline.

      The perception of an ’anyone but Branson’ attitude at the DfT led to the multi-billion-pound bidding process (which was initially won by First Group) being scrapped. At a cost of £40m to the taxpayer.

      Let’s hope that when it comes to HS2’s procurement – or any public procurement process for that matter – anyone, whether they be unidentified whistleblowers or rival firms, can feel confident that questions can be raised without fear of consequences, no matter how frustrating those questions may be for the parties concerned.

  6. That one single piece of excrement, i.e. Grayling masquerading as a human being & Member of Parliament, has cost the UK taxpayer £hundreds-of-millions over the years in pursuit if his failed ideological projects. His toadying, brown-nosing and bullying (& no doubt a tasty collection of other MPs' dirty secrets) seems to keep him afloat whilst he squanders public money and gathers significant personal wealth.

  7. Some words from the past by Pat Waterman:

    "Here are some things I would like you all to remember:

    The staff transfer process was never agreed with the trade unions. It was devised by the MOJ and LPT made the decision to implement it.

    The MOJ devised the criteria by which your assignment was determined. LPT only adapted it in certain cases to meet local circumstances e.g. where there were roles that did not fit into the MOJ’s blueprint.

    Assignments have been done on an “objective” basis. Beware of thinking that they have been done on the basis of an assessment of the work you have done over the course of your career.

    The MOJ previously claimed that the NPS would be staffed by “top” offender managers. I wrote and told them how disrespectful this was.

    Beware of thinking that the NPS is “better” (whatever that means) than the CRC. There are pros and cons to both organisations. An assignment to the NPS is not a “golden ticket”.

    CRC’s will stay in public ownership until they are sold... It does not look to me like there are that many buyers interested in London. That is a good thing."

  8. From a discussion piece by Mr Brown on this very blog, 2 March 2013:

    " In this context it seems to me that the critical issue in whether or not the approach being adopted with probation will work is how much it is possible to improve on current probation performance. There is a widespread, if largely implicit view, that it's not possible to significantly improve compliance/re-offending rates. If this is true then any organisation would be foolish to commit to a contract with a significant PbR component because the likelihood of failure is pretty high; if it is not true (ie it is possible to significantly improve performance) then a contract with a significant PbR component may be attractive (provided the metrics are right etc). In reality this is very difficult to know with confidence: therefore given the likely focus on price within the process the safest strategy for a contractor to adopt is to aim to deliver the same outcomes (or even maybe worse outcomes) at much less cost – anything else is too risky. In this scenario the state ends up paying less money for the same or worse outcomes (which is what seems to have happened with the Work Programme) which can still be viewed, I suppose, as a positive outcome for the state. However for those who believe that PbR has the potential to drive major improvements in reducing recidivism this outcome would be a grave disappointment."

    1. And this post from 31 Jan 2013 still makes me chuckle:

      "Radical option would be to decriminalise dishonesty - after the MPs expenses to-do, the politicians/police/press corruption revealed by Leveson, banking scams such as Libor fixing and industrial scale tax dodging by the private (and some individuals in the public) sector it's now fairly clear that honesty is the deviant behaviour. Leave the sex and violence for Probation to manage, stop criminalising the poor and save zillions."