Those with long memories will recall the sad fate of the TSR2 experimental aircraft. Thanks go to the reader for pointing me in the direction of the following summary discourse by Dean Rogers regarding probation's current plight and published on Linkedin. There's time to ground TR2 even before takeoff:-
Everyone with an interest in probation, from the National Audit Office to the Public Accounts or Justice Select Committees, have condemned the catastrophic failure of the MoJ’s “Transforming Rehabilitation Revolution”. This brainchild of Chris Grayling saw the abolition of Probation Trusts in 2014. Local provision was split - privatised Community Rehabilitation Companies (CRCs) now look after low and medium risk Offenders whilst high-risk Offenders are supervised from Whitehall and the National Probation Service (NPS).
Government programmes often go wrong and fail to meet political expectations or promises to taxpayers, but the scale of failure in this instance makes it a model in the dangers of poor governance. It’s failed all parties on all levels:
- Contractors were sold on empty promises, the NAO identifying projected losses of £400M+ over the original 7-year contracts. The rush to beat a political timetable didn’t allow for piloting so the programme crashed and burned.
- Predictions that work would be shared 70:30 between the private and public sectors was evidently wrong before any contracts were let. It’s turned out to be nearer 40:60. CRCs cut staff to break even. The NPS have thousands of vacancies, with staff burning-out from only dealing with high risk cases.
- The split in local services complicated information sharing and undermined trust between local agencies. This combined with staffing failures contributes to serious further offences rising by 25% in the last year – probation has got more dangerous and expensive for the taxpayer.
- Establish partnerships with the 3rd sector were broken and driven out of the system. Clinks research shows where charities remain engaged many are not being paid.
- Improved support for those being released to link them straight into drug, alcohol and DV programmes whilst minimising the risk of homelessness or unemployment (known as Through the Gate) have been described as less effective than doing nothing by HMI Probation.
However, hopes of a TR Counter-Revolution built around lessons learned are being dashed. Suddenly the impossible looks possible – the MoJ are conspiring to make the situation potentially even worse! The “plan” is to rush to replace the new contracts in record time. The proposed model retains the core split whilst stretching the local – 21 contracts will be merged into 10, albeit each area overseen by an expensive new civil servant to manage the contract challenges…literally just making the problems bigger.
HOW?
- How, any sane person with a passing interest in public safety and/or sound management of public finances may ask, can they be planning on yet again:
- Tendering contracts, in less than a year, before they’ve identified what exactly is required from either CRCs or the NPS and/or worked out how much this would cost to do safely?
- Coming-up with a model that increases the current pressures of staff by threatening new staff transfers, complex harmonisations of terms and conditions, and promoting uncertainty and competition around pay and pensions with little to no time to address these before contracts are re-let?
- Selling-off core services to providers who now have a proven track record of failure, with Inspectors deeming 5 of the 7 current providers to have contract areas that “require improvement” or worse?
- Making little to no provision for the 3rd Sector to safely or sustainably enter the market?
- Ignoring professional input into their “consultation”, with staff, unions, academics and other experts all screaming that the most critical part of a new model should be re-unifying services based upon local accountability? What works in Hackney will be different to Hereford, Newcastle has different needs to Norfolk.
Firstly, the public allow them to get away with it. Probation isn’t popular because offenders are unpopular. People don’t want to think about or engage with offenders. This isn’t unique to England and Wales. International research with data from 233 countries asking over 2M people what they thought the life-saving properties of autonomous vehicles should be in situations where death is unavoidable found that people would save dogs before criminals – although criminals marginally came ahead of cats who could presumably use their 9 lives to save themselves.
This gives politicians a license to continue re-offending in their management of probation. They think they’ll get away with it and if they are caught they’ll pay a short term fine then people’s attention span will drift. This is the mentality of a hardened gangster.
This is amplified by the wider political chaos and uncertainty in these troubled and volatile times. When uncertainty has saturated all areas of governance it’s hardly surprising that attempts to wipe up probation’s mess end up just spreading the sticky mess wider and further.
Secondly, those who do care are almost neo-Saints, used to putting up with chaos and struggle, trained not to judge, and not likely to give in until their flame has exhausted itself. This is exploited by politicians. During Grayling’s revolution most probation leaders, to their eternal shame, stood on the side-lines and watched in silence apart from the occasional “Tut”. Napo made some creative alliances with the legal profession angered by legal aid cuts, and encouraged the majority of its membership to strike twice, when prior to TR it had only taken strike action 4 times in over a century. But Napo stood alone – even Unison failed to join in their action. Survivors of that campaign are battle weary. Newcomers to probation need convincing they can win.
Thirdly, the Government and media like to portray what are complex problems and challenges in easy black and blue terms, getting most excited when someone has died – exactly the wrong cases to most clearly see the problems and actions that further demoralise staff. Even the liberal press, sympathetic to probation, usually only run a probation story when it can run alongside a “Probation is failing” subline when HMI Probation reports consistently say the only thing keeping probation going at all is the unsustainable level of commitment and unending professionalism of staff. Staff don’t want to rally around being told they’re failing. They need a positive message to organise around.
INTERVENING TO STOP ESCALATING RISK
So what can be done or is the TR Counter-Revolution destined to be even more tragic than Grayling’s master-class in how not to govern? There are grounds for optimism, such as:
- Serious money as well as lives are at stake and many players on all sides literally can’t afford to let this go wrong again. Letting or taking poorly formed contracts presents measurable financial risks and the NAO, PAC, JSC and financial press are all over this already, unlike TR1. The Gangsters are vulnerable, having lost their grip on their community.
- Even chaos requires government time and it is unlikely that Gauke could bully TR2 through parliament as Grayling did in the Coalition days. The Gangsters are also divided. If pension complications or the 33% contractual limit for any one provider that were tagged into TR1 require parliamentary testing a block on the crazy timetable can fall into place.
- This time there is an emerging unity amongst the ranks of those opposed to TR2. The biggest risk in TR2 is the timetable and Gauke’s haste to put something in place - having terminated the contracts early they need to do something. But TR1 was a dogmatic dog-fight between forces pro and anti – privatisation. Now even those who could live with outsourcing (e.g. Charities, local leaders, and even some CRC owners and Napo members working for CRC’s shocked by the experience of NPS staff) stand worried and concerned by Gauke’s haste.
And in the confusion comes Napo’s trump card. Gauke can’t portray Napo and its members as the bad guys this time because, in parallel, the Government are committed to implementing common professional standards across probation (including any contracts) for the first time, supported by aligned pay reform (so far only being funded for the NPS). These standards can’t be designed by politicians or bureaucrats. They inevitably have to turn to Napo members and invite them in to the debate. Members are lined up ready to engage loudly and positively!
A SHORT SHARP CAMPAIGN
This will be a short campaign. Between Christmas 2018 and April 2019, all the big questions must be answered and prices set for the timetable to progress anything like safely. In the middle of this, Gauke has to report back to the JSC in parliament. Between April and October 2019, “bidders” will assess their risks and the market will need to justify and sustain itself under public and parliamentary scrutiny.
Napo’s message to Gauke and his crew is a short, simple and clear one. Just pause. Stop and take stock. You don’t have to rush and repeat Grayling’s mistakes. To get TR through the MoJ created the CRCs and ran them for 8 months before handing them to private contractors. Take those that are failing back. Put everything else on hold whilst you test what will work and what that costs going forward. Take your time identifying the snags – like TUPE and harmonisation issues - before you try and sell anything.
The ideology is all on one side. None of us can afford to allow the Gangsters to win again.
Dean Rogers
Assistant General Secretary Napo
"Predictions that work would be shared 70:30 between the private and public sectors was evidently wrong before any contracts were let. It’s turned out to be nearer 40:60. CRCs cut staff to break even."
ReplyDeleteI disagree. Although the split was miscalculated & has had a disastrous effect, the staffing cuts were built into the bids regardless. That's why the EVR was negotiated at JNCC (Napo collusion?) even though it only applied to a priveleged few - & why the Modernisation Fund provided a huge handout (£80m?) to the CRCs to soften the impact of paying off staff. It was a bung, a sweetener, a means of giving the imoression that the bids & the TR project was cost-effective. More Tory lies & deception.
Do not let MoJ off the hook. They planned & budgetted for significant job losses with the bidders. It was NOT an accidental effect. It was the constructive dismissal of hundreds of staff employed in Probation.
I notice that Private Eye is continuing with the probation story this week and quotes a figure of £19 million for CRC redundancies.
DeleteThe figure is immaterial the facts are that NAPO in the form of the current leadership failed to manage the legal staff protections for all its members. Napo continued taking monies in trying to then reduce the severe impact on the lost fee paying members it helped sack. Not for the membership however, but for the realisation the finances of Napo are such that it will falter shortly and they are in a survival game. Unison were complacent too.
DeleteOh gooddee, time for yet another airing of my favourite Selous Hansard quote where he answers the questions put to him by Gordon Marsden MP, this time from the debate in HoC on 2 July 2015:
ReplyDeleteAndrew Selous Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Justice
Modernisation funding was allocated to the Ministry of Justice by HM Treasury in 2014/15 to bring about sustainable reductions in resource requirements across the Ministry. Some of this funding was made available for voluntary redundancies in Community Rehabilitation Companies (CRCs). Of this, £16.4m was spent on voluntary exit packages in 2014/15 and the remainder was allocated to CRCs on a pro-rata basis, based on their size and estimated future staffing requirements.
Each Community Rehabilitation Company (CRC) is managed by a Contract Management Team (CMT), headed by a Senior Contract Manager and comprising staff with commercial, contract management and operational expertise to ensure a multi-disciplinary approach. The size of teams reflects the size of the contract being managed. While it is for CRC owners to implement and oversee redundancy schemes, CMTs are ensuring that CRC owners adhere to their contractual obligations in this area. CMTs are able to draw upon commercial, financial and legal expertise from within the wider Ministry in delivering this role.
Interesting opening gambit, which supports the view of @08:46 above... "Modernisation funding was allocated to the Ministry of Justice by HM Treasury in 2014/15 to bring about sustainable reductions in resource requirements". He goes on to quantify what had been paid up until that date (July 2015) as £16.4m (presumably including the eye-watering sums of around £300,000 each for Sally Lewis & Russell Bruce), with "the remainder was allocated to CRCs on a pro-rata basis, based on their size and estimated future staffing requirements."
What it won't have included is any payment for the hundreds of Sodexo staff who were 'on notice' in July 2015, but not paid off until after the 7 month hiatus agreed by the unions, i.e. after 30 August 2015.
I now have to leave the house to buy a copy of Private Eye...
"Of this, £16.4m was spent on voluntary exit packages in 2014/15"
DeleteThese were the EVR packages agreed BEFORE the end of March 2015, hence the specificity of "2014/15".
CRC owners to implement and oversee redundancy schemes, CMTs are ensuring that CRC owners adhere to their contractual obligations in this area
DeleteBut they didn't and then NAPO let them off by no legal actions from NAPO whos leadership remains total complacency.
I'm just guessing, but any CRC owners that bid for new contracts won't do it for any less money then they've been able to get first time around, and they've had quite a bit more handed out to them beyond their original contract agreements.
ReplyDeleteTR2 will be expensive.
http://www.ekklesia.co.uk/node/27369
'Getafix
Responding to news that Interserve is continuing to get public contracts despite seeking a rescue deal, Owen Espley, War on Want’s Senior Economic Justice Campaigner said: “Far from providing greater efficiency, privatisation and outsourcing have heaped financial risks on to public services and the workers who provide them. Private sector leveraging strategies place the workers and services at risk whilst shareholders and banks seek to extract profits from already underfunded services. Far from being able to better manage risks, the private sector simply passes them on to workers through using precarious employment contracts and relies on the government to underwrite them when things go wrong.
Delete“Outsourcing and privatisation are often nothing more than a smoke screen for squeezing the wages and conditions of the, often marginalised, workers who provide public services. In place of providing much needed investment, these companies seek to maximise profits at the expense of workers, many of whom face discrimination and marginalisation, and whose work is undervalued.
“Outsourcing is both a cause and effect of discrimination in the workplace, as marginalised workers are more likely to be outsourced and on precarious contracts, and the conditions that black, women, and migrant workers then face are worse than equivalent in-house staff. The power imbalance further contributes to discrimination as workers face difficulties in challenging abuses such as illegal deduction of wages, bullying and discrimination.
“Despite the barriers they face, migrant, precarious and women workers are fighting back and demanding equality with in-house staff. Recent victories at the London School of Economics and SOAS show that when workers come together, they have the power to demand change and challenge outsourcing. Their victories, as well as the difficulties that Interserve faces, demonstrate that public services delivered by in-house public workers is in both the workers’ and the public’s interest.”
Another privatisation success story. This from BBC website:-
ReplyDeleteAn Army recruitment drive has faced "significant problems" - including a website that cost three times its budget and was 52 months late, a National Audit Office report has found.
Outsourcing giant Capita was awarded the £495m contract for Army recruitment in 2012 - but has failed to hit soldier recruitment targets every year since.
Capita admitted it had "underestimated the complexity" of the project. The Army said it had "put in place a plan to address the challenges".
The NAO found the initial delay to the £113m website was caused by the Ministry of Defence, which failed to meet its contractual obligations to provide the IT infrastructure to host Capita's recruitment software.
The Army passed responsibility for developing the whole system to Capita in 2014, but "due to the complexity of the Army's requirements, system development was delayed even further", the report said. And despite the website being finished in November 2017, the Army estimates there were 13,000 fewer applications between November 2017 and March 2018 than in the same period the previous year.
Capita has consistently missed the Army's recruitment targets, with the total shortfall ranging from 21% to 45%, the NAO said. The Commons Defence Committee was told in October that the Army currently has 77,000 fully trained troops, compared with a target of 82,500.
The Army and Capita have introduced some "significant changes" in the last year, but none have resulted in enough soldiers being recruited, according to the NAO. The report found it can take as long as 321 days for recruits to go from starting an application to beginning basic training, and that many drop out of the process while waiting.
A total of 47% of applicants dropped out of the process voluntarily in 2017/18, and both the Army and Capita believe the length of the process is a significant factor in this, the report said. It added the project will not achieve its planned savings of £267m for the MoD.
Capita - whose 10-year contract continues until 2022 - said it had overhauled the "governance" on its contract and there were already improvements. Nia Griffith MP, Labour's shadow defence secretary, said the Conservatives' "ideological obsession with outsourcing" had "driven up costs and resulted in the failure to recruit enough personnel to the Army".
Capita blamed their failure on this particular contract last week on a 'national obesity crisis' saying they couldn't recruit enough people because many were to fat to get through basic training!
DeleteCouldn't make it up!
'Getafix
I think the Capita / Army recruitment failure is interesting. Not only is it an example of another outsourcing failure / scandal but it begs questions about the nature of important public sector professions. I think that when you are about to enter into such a profession it represents a huge commitment on the part of that individual. The professions I am referring to come with high levels of responsibility and often very challenging and emotional content. An on line application process through 3rd party agents, or employment with corporate outsourcing behemoths, who often represent here today gone tomorrow opportunists, does not to my mind represent the gravity or needs of aspiring or actual public service professionals or the particular profession. It is little wonder that aspiring professionals are turning away in the numbers that they are or professional turnover and recruitment numbers are headed in an adverse direction. It is sign that the new culture is not holding and supporting people as they should. Being able to see the whites of someone's eyes,a someone who has professional credibility, whilst maybe an old fashioned idea, remains fundamentally important I believe. Relationships matter.
DeleteOr, as in the case of these mendacious Tories, money talks. Nothing else matters. The sad lives of the little people are regarded as acceptable collateral damage. Twas ever thus: £500,00 for 4 months' work while pay parity for staff is denied; £300,000 payouts whilst others are cheated out of fair redundancy; £billions wiped off ordinary share values while big institutions barter with Debt for Equity.
DeleteCourtesy of ConstructionNews:
DeleteCabinet Office spokesman Lord George Young has said it is not “accurate” to compare Interserve’s situation with Carillion.
Lord Young also revealed Interserve is piloting a new intiative that could enable other firms to step in and take over contracts in the event of a business failure.
In a parliamentary session called to discuss the company, which recently announced it was in talks with lenders to refinance its business, Lord Young stressed that Interserve’s situation is “very different from Carillion”.
He said: “Interserve is now taking the action that Carillion ought to have taken – to restructure its balance sheet and improve its robustness – and, unlike Carillion, it does not need new money. It needs to turn debt into equity. It is not accurate to make a direct comparison between the two companies.”
However when questioned by Labour’s Lord Stephenson, he confirmed that the company had “volunteered to lead the way” as one of the first suppliers to design a ’living will’.
He said: “We have recently announced plans for all suppliers to draw up resolution plans in the unlikely event of a business failure, to ensure continuity of services and, where necessary, to enable another provider or the government themselves to step in.
“Interserve has volunteered to lead the way as one of the first suppliers to design one of these resolution plans.”
The company is one of five piloting the new arrangement outlining a contingency plan in new contracts with suppliers if the contract runs into difficulties, he said.
Lord Young added that the company had told the Cabinet Office that it is currently paying 90 per cent of suppliers within 60 days or less.
An Interserve spokesman said: “We have, together with other key suppliers, fully engaged with the Cabinet Office as the government has looked to improve the outsourcing process while mitigating risk.”
Establish partnerships with the 3rd sector were broken and driven out of the system. Clinks research shows where charities remain engaged many are not being paid.
ReplyDeletehttps://www.civilsociety.co.uk/news/government-spending-with-charities-plateaus-as-more-goes-to-private-sector.html
Central and local government spending with charities has stagnated in recent years, while private sector procurement has increased, according to a new report.
DeleteThe Institute for Government (IfG) report quotes NCVO data that shows charities received just over £12bn from central and local government in 2015/16, a similar amount to 2008/09.
Meanwhile, the report says, central government procurement overall has risen by £21.8bn between 2010/11 and 2017/18, while local government spending has grown by £3.9bn in this time.
In particular, the report says government spending with large outsourcing specialist firms such as Capita, Carillion and Amey, known has “strategic suppliers” has increased greatly in recent years.
Capita income from government bodies rose by over 50 per cent from under £800m in 2012/13 to more than £1.2bn in 2016/17.
Meanwhile, government procurement spending on Carillion and Amey more than doubled in that time.
The IfG report says many charities are effectively subsidising public services by running a deficit on statutory contracts and says that the largest charities are running the biggest deficits.
It says: “In recent years, a number of charities have closed due to losses on government work, most notably 4Children and the Lifeline Project. Like Carillion, both had grown quickly by winning contracts but were unable to generate sufficient returns to service the debt they had incurred to support their expansion.”
‘Better data needed’
The main recommendation the IfG makes is that the government should collect more accurate data on its procurement spending.
The report says current data is poor and that better data will enable the government to make better spending decisions, will lower prices, improve accountability, create new markets and expose corruption.
It calls for the government to appoints a chief data officer “as a matter of urgency”, who should develop a national data strategy which will include a plan for publishing usable data for every stage of the contracting process.
The IfG recommends that the publication threshold for monthly spend data from central government and NHS bodies is lowered from £25,000 to £500.
It also called for contracting authorities to require providers to publish all subcontracting opportunities worth over £25,000.
For more news, interviews, opinion and analysis about charities and the voluntary sector sign up to receive the Civil Society News daily bulletin here.
- See more at: https://www.civilsociety.co.uk/news/government-spending-with-charities-plateaus-as-more-goes-to-private-sector.html#sthash.Y39oCopi.dpuf
Today's money press on Interserve. As predicted, the conclusion is that little people (smaller investors, including employee shareholders) get crushed, while the large scale movers & shakers (loan providers e.g. banks) cash in:
ReplyDeletehttps://moneyweek.com/499384/interserve-dishes-up-a-mess/
Another huge outsourcing group is in big trouble. What went wrong, who is to blame, and what happens now? Matthew Partridge reports.
In January, outsourcing giant Interserve was placed under special monitoring by ministers. While it insisted at the time that it wasn’t about to become the next Carillion, says James Moore in The Independent, Interserve is now “in rather urgent talks with its lenders about turning a substantial chunk of its £600m-plus debt pile into shares”. As a result, “punch-drunk investors” facing massive dilution have seen the shares slump by 50% in a week. They have lost 90% since January.
By describing the decision to “virtually wipe out shareholders” as a “positive step”, CEO Debbie White seems to have “inhaled too many fumes in the cleaning contractor’s cupboard,” says Christopher Williams in The Daily Telegraph. Of course, Interserve’s problems started when her predecessor Adrian Ringrose “built up its debt pile with a series of ill-advised deals”.
However, she made things much worse by focusing “on improving operational performance rather than firefighting”. Even now she acts “as if shareholders should be pleased with small margin improvements when their investments in Interserve are set to be trashed”.
One of Ringrose’s biggest blunders was “joining a government-sponsored effort to build almost useless infrastructure” says The Guardian’s Phillip Inman. These energy for waste (EFW) plants “are supposed to be efficient” but they are hyped and being built at a time when there is “a huge surplus of EFW capacity across Europe”. As a result, “the company is paying tens of millions of pounds to extricate itself from EFW contracts”.
Actually, the real villain here is chairman Glyn Barker, as “ever since the spring it’s been clear that Interserve needed a dilutive cash-raise”, says Alistair Osborne in The Times. While such a fundraising would have been “painful”, shareholders would still have been able to retain much more of the company. Instead, Barker, who joined the company when shares were above 400p, “ducked the big call and went on to mislead the market”.
Bad news for shareholders
Despite its problems, Interserve is unlikely to follow Carillion into bankruptcy, says Matthew Vincent in the Financial Times. A deal with banks in April gave it short-term liquidity, a boost Carillion never enjoyed, to explore options such as the debt-for-equity swap now about to happen. The fact that shareholders, not taxpayers, will pick up the tab will ensure that the government supports any reorganisation.
Still, avoiding Carillion’s fate will be cold comfort for shareholders as “the scale of deleveraging required is so great that… assuming the company is repaired, existing shareholders are unlikely to enjoy much of the upside”, says Bloomberg’s Chris Hughes. Indeed, “it will be the new money and the lenders… who enjoy the lion’s share of any recovery”.
Funny how the banks never seem to be tainted with shit; not even when they're responsible for building the whole shitpile by hand, using their own freshly shat shit...
... “it will be the new money and the lenders… who enjoy the lion’s share of any recovery”.
Fuck capitalism.
23 July 2012 - Tory capitalism = strong & stable? Like fuck. Its always 'watch your back'...
ReplyDelete"The fortunes of UK suppliers to the public sector vary hugely. The likes of Rok and Connaught have hit the corporate graveyard, and Mouchel is in bad shape. By contrast, support services and construction group Interserve (LSE: IRV) is in rude health.
Last Tuesday, the firm released a pre-close trading statement saying that it had bagged £1bn of new orders in the first half of the year, as it seeks to become one of the biggest providers of government services. New work was won from the Ministry of Justice, Alliance Boots, Sainsbury’s, and West Yorkshire Police, from whom a £150m contract was secured. This all comes despite the challenging backdrop of sticky inflation and government cutbacks.
Other opportunities are piling up too. The company is bidding on three out of nine prisons that are being privatised, along with tendering for probation services in a joint venture with Durham Tees Valley Probation Trust. Furthermore, it is shortlisted against Serco and Virgin for a groundbreaking deal to provide social services in Devon.
The pennies are also being tightly managed – CEO Adrian Ringrose notes that “trading has been underpinned by strong cash generation” and that “the recent partial disposal of its interest in University College London Hospitals will generate £35m in cash”.
Meanwhile, its support services arm is on target to hit margins of 5% by 2013, compared to 3.6% in 2011. And although the board’s recent full-year guidance was unchanged, I suspect this could be an expectations management exercise. I think upgrades later in the second half of the year are possible if the positive momentum continues.
One key risk is that many of the newest contracts are now much larger and more complex than previous deals. So they include terms on payment by results, which tie a proportion of earnings on prison contracts to a range of variables, such as prisoner rehabilitation rates. Nonetheless, a £4.5bn order book (as at December) provides excellent income visibility. And the firm’s exposure to the fastest expanding regions of the Middle East and the rest of the world (35% sales) is an extra bonus.
The City is forecasting 2012 revenue and underlying earnings per share (EPS) of £2.3bn and 44.7p respectively, with a 5.5% dividend yield (twice covered). I rate the stock on a through-the-cycle EBITA multiple of eight, assuming a sustainable profit margin of 4%. After adjusting for the £56m pension deficit and £44m of net debt (0.7x EBITDA), I get an intrinsic worth of about 410p per share.
Investors need to be aware of the usual dangers associated with managing large multi-year contracts, collecting debts in the Middle East and the government’s austerity drives. But with rivals such as Capita and Serco rated much higher, Interserve looks a good bet on the ongoing expansion of outsourcing. Interims are due out on 15 August.
Rating: BUY at 330p (market cap £420m)"
Compare & contrast:
2012 - Last Tuesday, the firm released a pre-close trading statement saying that it had bagged £1bn of new orders in the first half of the year, as it seeks to become one of the biggest providers of government services... CEO Adrian Ringrose notes that “trading has been underpinned by strong cash generation”
2018 - Of course, Interserve’s problems started when... Adrian Ringrose “built up its debt pile with a series of ill-advised deals"
I do love the 2018 observation that Debbie White "seems to have inhaled too many fumes in the cleaning contractor’s cupboard"
This behaviour, i.e. inherent instability & a myopic focus on pocket-it-while-you're-winning, is EXACTLY why such ne'erdowells (or McDowells) should NEVER be allowed near public service provision.
https://m.huffingtonpost.co.uk/entry/campaign-to-end-friday-releases-for-prisoners_uk_5c0a8eb4e4b0de79357c6ba3
ReplyDeleteIf you're being released homeless with addiction issues and £46 to last you for at leas 5 weeks until you're UC claim is processed, then any day of the week becomes a bad day to be released on. Friday may present particular problems but not for everyone.
DeleteBut wasn't the biggest sales pitch for TR precisely to address the issues noted above? £46, homelessness and substance misuse?
TR has done the exact opposite. It's reduced support and assistance. Much is spoken about information sharing in this new world of criminal justice, and that must be a good thing. But when everything is outsourced, privatised and sub contracted out, there's no two operational models the same, so sharing information becomes problematic, and it dosen't really matter where information is shared in relation to the £46, UC is a bare minimum of 5 weeks, but likely to be far longer for those being released (particularly those homeless) who have no access to IT or the right documentation to make a claim or even a bank account.
I see no reason why those with addiction can't be registered on a national database that's accessible to all involved agencies, if only to record treatment plans that enable access the right level of treatment. With a centralised registration programme it would even allow people to access help from a walk in centre any day of the week.
TR has reduced support for those leaving custody. It hasn't reduced reoffending. Infact, it's created (and continues to create) a situation for many that perpetuates the perfect circumstances to enable offending.
TR was a crap idea. The privateers have no interest beyond income, and even those who are interested have lost the ability to extent support.
To continue with it is a diliberate and conscious act of causing harm to people.
But there's no shame in this government.
'Getafix
https://www.globalgovernmentforum.com/a-third-of-uk-government-funds-spent-with-outsourcers-report-finds/
ReplyDeleteAlso see todays FT.
https://www.continentaltelegraph.com/business/interserves-bankruptcy-would-be-a-delicious-gift-to-taxpayers/
DeleteThe UK government is spending nearly a third of its total expenditure on outsourcing, a new report by think tank the Institute for Government (IfG) has revealed.
DeleteThe report, ‘Government procurement: the scale and nature of contracting in the UK’, reveals that departments and agencies spend some £284bn (US$324bn) with contractors. It was published as the share price of key supplier Interserve crashed, threatening the failure of another major contractor following the collapse of Carillion a year ago.
However, the authors argue that the current scale of outsourcing means that it is now “too large to be easily unraveled or scrapped”, noting that it is “the single biggest component of modern government.”
The report says that four departments – the Ministry of Justice (MoJ), the Department for Transport (DfT), the Department for International Trade(DIT) and the Department for Environment, Food and Rural Affairs (Defra) –spent more than half of their entire budgets with external suppliers last year.
Are you being Interserved?
“Government is spending hundreds of billions of pounds every year with external suppliers – but there are signs that some players involved in outsourcing are struggling, most recently Interserve,” said IfG director of research Emma Norris.
According to the Telegraph, Interserve won £938m ($1.2bn) of government contracts – representing 11% of the total – in 2017, but it has experienced significant financial difficulties during 2018.
In the last few days the company has sought its second rescue deal of the year, and faces debts of £500m ($630m). News of the rescue deal caused share prices to tumble, dropping initially by 70%.
The company has 45,000 workers in the UK and provides construction, facilities management and other services such as cleaning and catering in schools and hospitals. It is also the largest provider of probation and rehabilitation services in England and Wales.
Lots of eggs, one basket
The IfG report says ‘strategic suppliers’ such as Interserve – companies that receive over £100m ($125m) in revenue a year from government – are winning more and more contracts. In 2016-17, government reported spending the largest amount of money with Capita, Carillon and Amey. The IfG calls this a “risky” strategy, “given that its top three suppliers have all experienced financial difficulties in recent years.”
Despite Interserve’s financial woes, the UK has continued to award contracts to the company. Indeed, the very scale of the government’s contracts with Interserve make it a key client – meaning that if it were to turn off the tap, it could well prompt the company’s collapse and be required to pick up the pieces.
The IfG is urging the government to collect much better data on outsourcing, and to “urgently review the health of its procurement markets.”Government does not have the data it needs on its own outsourcing and procurement,” said Norris. “It needs to look hard at the experience of the past 30 years of outsourcing, and develop a much stronger sense of what has worked well and what has not.”