As speculation grows as to exactly what the MoJ has up its sleeve in order to fix the probation omnishambles, I've been pointed in the direction of this article on the Public Finance website from February regarding the whole vexed topic of privatisation post-Carillion:-
Coming home: local government insourcing
The collapse of contracting giant Carillion one year ago sent shockwaves through both the private and public sectors. It was Britain’s second largest construction company, and its liquidation has been named as the “largest ever in the UK”. Creaking under the weight of £1.5bn in debts, Carillion’s demise, according to the National Audit Office, cost the public purse £148m as it picked up 420 abandoned public service contracts – in organisations ranging from schools and hospitals to prisons and the armed forces.
At the policy level, the Carillion story led to a thorough interrogation of the outsourcing model. Outsourcing had grown in popularity since being kickstarted in the 1980s by then prime minister Margaret Thatcher, when local authorities were effectively forced to open inhouse services to the private sector to cut costs. From 2010, outsourcing was championed enthusiastically by Cabinet Office minister Francis Maude, whose Open Public Services white paper set out plans for a diverse marketplace for public services.
What a difference five or six years can make. MPs on the works and pensions, business, and public administration committees all made some trenchant comments. “The failure of Carillion reflects long-term failures of government understanding about the design, letting and management of contracts and outsourcing,” said the public administration committee in its report last summer.
The Carillion crisis gave opponents of outsourcing ammunition to launch a full-scale attack, and the government has had to shift position. Current Cabinet Office minister David Lidington has reaffirmed the government’s commitment to outsourcing, but intends to bring in a raft of new regulations to improve transparency and secure social value. A ‘living wills’ pilot is testing contingency arrangements in the event of another Carillion-style collapse.
Despite this, the debate rumbles on, especially with ongoing concerns over another large government contractor, Interserve. This company’s troubles also became evident at the start of last year and it has been battling to stay afloat ever since. In December, it was seeking a second rescue deal as it struggled with £500m of debt.
Interserve has so far survived, with the government allowing it to continue to bid for public contracts, confident that it is not in the same dire financial situation as Carillion. But it will surely have spooked a local authority sector that looks like it was already starting to have second thoughts about outsourcing, as PF reported in March last year.
We highlighted Southwark council, which saved £4.35m after bringing its customer services back inhouse in 2013. Now, an exclusive PF investigation via freedom of information requests shines a light on council outsourcing over the past five financial years. It reveals a dramatic slowdown in the amount of money local authorities have been spending. Carillion’s collapse happened towards the end of the period that PF examined: was it the nail in the coffin for local government outsourcing?
FOI responses from 60 councils across England show a stark tailing off in the value of outsourced contracts. Where there was a 39% increase in the value of contracts between 2013-14 and 2014-15, this had almost flattened to just 1.6% between 2016-17 and 2017-18, with much smaller rises in the intervening years.
The most common services outsourced over the five-year period were waste management (17% of respondents), facilities maintenance and management (17%) and leisure services management (13%). A range of contracts were signed over the five-year period, from snow clearing to waste management to stray dog kennelling.
There were fewer similarities in the services councils chose to insource during that time, with authorities bringing back inhouse everything from cleaning services to highways maintenance to IT services. PF analysis finds examples of councils that have made considerable savings by bringing services back inhouse. East Riding of Yorkshire Council is one of the councils that put a figure on how much insourcing had saved it. The local authority has reduced costs by £2m since 2013 after bringing back inhouse services like staff training, occupational health, payroll, IT and print and design. The council did not respond to questions from PF on why it made these decisions.
Derby City Council has also saved more than £1m in the past two years after bringing highways maintenance – a contract previously held by Carillion – back under council control. David Kinsey, head of highways, says: “We were confident we could run things more efficiently.” He points out this was not because the council was unhappy with the service provided by the contractor. “It would be easy for me to sit here and say it was all because of the big bad contractor, but, actually, when we reflect on it, there were questions to be asked about whether we were writing the right contracts and whether we managed them effectively.”
Notably, not all contracts brought back under council control have been successful. Maidstone Borough Council brought a cafeteria within council property back inhouse at a cost of £220,000 between 2016 and 2018, but subsequently decided to re-outsource the management. Laurence Tricker, programme and projects manager at Maidstone, explains: “The decision was made based on a period of trading by the council during which losses were made. Since being contracted out, the cafĂ© provides rental income and we have reduced our overall management costs.”
The membership organisation the Association for Public Service Excellence surveyed 208 senior local government officers in 2017, before the Carillion collapse. It found that 73% had or were in the process of considering insourcing a service, with 45% having already completed the process. APSE’s head of communications, Mo Baines, says it was austerity that had driven “an increased need for efficiencies and improvements to service quality”. She adds: “While major contract failures like the collapse of Carillion have focused minds, its contribution to the volume of insourcing in local government is of less significance than those contracts already being insourced by local councils.”
Mayor of Hackney Philip Glanville says his council has been on a 10-year journey to bring services back inhouse. “There has not been an example that I am aware of where we have brought something inhouse and it has not cost us less to deliver that service,” he tells PF. “We have seen that at almost every step you get a more coordinated response, save money, create better services and improve terms and conditions for the workforce.” Between 2010 and 2014, the council brought back inhouse its recycling services, saving £600,000. It also took back control of its housing management service, reducing its costs by £300,000.
Matt Dykes, senior policy officer at the TUC, believes outsourcing has had its day. “There has been a growing trend for taking services back inhouse,” he explains. “Someone might suggest that we have reached peak outsourcing – there’s not much else now that can be externalised, and councils are down to core services only.” Colin Haslam, professor of accounting and finance at Queen Mary University of London, agrees that local authority outsourcing has reached its peak. Many councils had already started the process of “remunicipalisation” as he calls it – the localised provision of services.
Haslam believes the Carillion collapse is likely to mean more local authorities will bring services back inhouse, because of “an increasing risk in relation to the large corporate outsourcers, like Capita, Serco, G4S and Carillion”. Outsourcing commentator John Tizard also agrees that Carillion’s legacy is likely to be muted local authority interest in outsourcing. “There have been some very high-profile failures in outsourcing, which has made many in the public sector – not least local government – question [its] usefulness.”
Tizard tells PF that the backslide in outsourcing is partly because of the lack of financial flexibility the model offers. “In a period of tightening budgets, austerity and uncertainty, it is increasingly recognised that long-term contracts, which lock up sizable parts of your budget, further reduce financial flexibility and consequently the ability to protect frontline services that are not outsourced,” he explains.
A survey by the New Local Government Network from October last year suggests that Carillion has “dented public confidence in partnership arrangements”. NLGN’s poll of nearly 200 council leaders found that 39% wanted to outsource less over the next two years, compared with 15% who were looking to outsource more.
Jessica Studdert, deputy director of NLGN, echoes Tizard. “To cope with financial and demand pressures, councils are increasingly finding they need more flexibility and direct control over services – outsourced contracts tend to be long-term and can be unresponsive to changing circumstances,” she tells PF.
With no sign of financial pressures on councils easing, it could be easy to see why long-term and costly contracts with third parties would appear less attractive. It is not just the local government sector’s views on outsourcing that might have been damaged over the past year. Haslam claims private providers have become “increasingly defensive about taking on any further contracts, and are even handing them back”. Private contractors often view government contracts as too “onerous”, pushing them into loss-making positions, he suggests.
Tizard agrees that the private sector, too, is re-evaluating its position in a post-Carillion world. “The likelihood is that they will increase their risk premium in their charges – I think many contractors will now be looking for a better return and therefore higher charges,” he predicts.
Kerry Hallard, chief executive of the Global Sourcing Association, an industry group, believes local government outsourcing should continue and that Carillion’s failure was not a result of this method of service provision. “Carillion wasn’t an outsourcing failure. Carillion was a corporate governance failure,” she tells PF.
Hallard expresses disdain for the “anti-outsourcing rhetoric” that followed Carillion’s liquidation, including government comments. “There’s no positive communication that comes from government, it is just obsessed with kicking rather than applauding its service providers,” she says. But Hallard concedes that outsourcing is not always effective and that there is scope for change. “Outsourcing shouldn’t be focused just on driving out cost any more – that’s old school,” she claims. Instead, she believes greater efforts should be made to bring SMEs into the fold, with fewer contracts going to the small number of big players.
In Hackney, Glanville agrees there needs to be greater consideration of SMEs in the government’s portfolio of contractors. “Too often, big companies are going through the motions and delivering poor-quality services,” he tells PF.
Walter Akers, partner at consultancy RSM UK, explains why local authorities might prefer larger contractors: “There is a bias towards larger organisations, because they score better on risk and in the procurement process because they’ve got scale, they’ve got strong balance sheets – they’ve got experience.” He also believes Carillion should be a wake-up call for councils when entering into contracts with large private organisations. “Councils think they can continue operating the way they always have after they’ve signed these big commercial deals, and experience shows they can’t. That’s where they end up spending more money longer term than if they kept services inhouse,” he tells PF. Councils should be more savvy in their contract management, he explains.
Akers also points out that, often, local authorities outsource a service to a large organisation that does not necessarily have better skills. “Why was Carillion – primarily a construction firm – running libraries and providing school meals? It’s like going to an Italian restaurant and ordering a curry,” he suggests.
At the TUC, Dykes predicts that more council insourcing is to come. “It won’t change quickly, because you have had 30 years of this mindset and culture, and there will be long-term contracts that may be very difficult to get out of,” he says. “But things are changing already.”
Tizard tells PF: “The current Conservative government has said it sees outsourcing as the principal model for service delivery, but local government is perhaps more sophisticated, and local authorities led by Tories and Labour are all questioning outsourcing,” he says.
PF’s FOI research shows that 60 councils in 2017-18 still contracted out £588m of services. But Studdert says confidence in outsourcing has been shaken and notes a declining appetite among councils. She adds: “That doesn’t mean an end to the role of the private sector in public provision altogether. It means that future partnerships need to be much more clearly built around the overriding imperative to drive deep social impact with public spend. If partnerships are built on a greater sense of shared endeavour and long-term value creation, this should recognise the innate strengths of each and absolute clarity of roles.”
Back to the source
Margaret Thatcher started an increase in public sector outsourcing when she brought in compulsory competitive tendering in 1980. This effectively forced local authorities to open up inhouse services to private competition in an effort to cut costs. It was initially introduced for construction, maintenance and highways work by the 1980 Local Government, Planning and Land Act.
The policy was subsequently repackaged under New Labour. After winning the 1997 election, Tony Blair’s government replaced CCT with best value, forcing councils to look at outsourcing services, although the policy was also intended to consider quality alongside cost. Further outsourcing was encouraged in the 2011 Open Public Services white paper introduced by the coalition government. This suggested that public services should be open to a range of providers – public, private and third sector – with control decentralised to the lowest possible level.
BlueLabour & the BlairWeasel are at the heart of so many damaging, unfair policies which have inflicted inequality & pisspoor services upon the country - while they're all nicely chummied up with very fat bank accounts. Utter scumbags, using Labour as a wooden horse. The "hand of history" should be choking the life out of the Weasel & his right-leaning cronies.
ReplyDeleteEven if they nationalised the entire probation service tomorrow it wouldn’t change the culture of the majority of staff , that’s the issue.
ReplyDeleteWrong the culture of probation management ideals has always held an autocratic snobbery. The higher up the harder their foolish line. They are drunk on stupidity fueled by misplaced power. The privateers just supported their self belief yet they on the slippery slope now as no loyalty is all they deserve. Staff have had enough and they will come through.
Deletehttps://www-express-co-uk.cdn.ampproject.org/v/s/www.express.co.uk/news/uk/1125426/NHS-news-NHS-privatisation-NHS-logo-pay-choices-professionals-improvement-England/amp?amp_js_v=a2&_gsa=1&usqp=mq331AQCCAE%3D#referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fwww.express.co.uk%2Fnews%2Fuk%2F1125426%2FNHS-news-NHS-privatisation-NHS-logo-pay-choices-professionals-improvement-England
ReplyDeleteMany of the NHS services provided across England are being locally commissioned to third-party service providers by Clinical Commissioning Groups (CCGs), as well as NHS England. Dr Tony O'Sullivan, the co-chair of Keep our NHS Public and a retired consultant paediatrician, warned the use of the NHS logo by private companies is another way British people are being deceived as the health service continues to undergo elements of privatisation. According to NHS guidelines, the logo cannot be used as part of the corporate identity of a private company or as part of the name or logo of a particular initiative without the permission of the Department of Health and Social Care on behalf of the Secretary of State for Health and Social Care, who owns copyright of the logo.
Delete[patients] go along to clinic as they have been for five years and they attend an assessment for their child with a heart condition or possible autism and the sign outside the clinic is the NHS but they are actually seeing people employed by Virgin, as an example.
A Virgin Care spokesman said: “The NHS sets strict rules on how NHS services must be branded and, as a partner with the NHS, we’re required to use the logo alongside our own. This helps patients understand that we’re working in partnership and that services are NHS funded and meet NHS quality standards."
Not about probation, but there can't be a more damning indictment on the current state of the UK’s CJS, then another European country refusing to extradite someone on the basis that they fear they will be held in inhumane and degrading conditions if returned to the UK.
ReplyDeleteJust shocking.
https://www.bbc.co.uk/news/uk-england-merseyside-48225676
'Getafix
The extradition from the Netherlands of a suspected drugs smuggler has been suspended over Dutch judges' concern about the state of a UK jail.
DeleteThe judges refused to send the man back to HMP Liverpool due to fears over "inhuman and degrading" conditions, the Liverpool Echo reported.
The Ministry of Justice (MoJ) said: "Since providing reassurances the court has postponed its decision."
A spokeswoman said the judges wanted more information.
The judgment also referred to conditions in HMP Bedford and HMP Birmingham.
Although he is not named in court documents seen by the BBC, the fugitive's links to Liverpool mean it is likely he would be held at Liverpool prison.
In a statement, the MoJ said: "We strongly refute the idea that any of our prisons provide inhuman or degrading conditions.
"There have been significant improvements since the inspections of Liverpool, Birmingham and Bedford prisons and neither our domestic courts nor the European Court of Human Rights has ever ruled that they are in breach of Article 3."
Referring to last year's annual HMIP report, the Court of Amsterdam heard how inspectors had found "some of the most disturbing prison conditions we have ever seen" and "conditions which have no place in an advanced nation in the 21st century".
But a letter written by the Director General of Prisons to the judges overseeing Wednesday's case argued: "We do not accept those conditions anywhere in our prisons amount to inhuman or degrading treatment contrary to Article Three [of the] European Court of Human Rights."
The letter added that steps are being taken to reduce overcrowding and that £100m of funding has been put in to increase staffing levels across the prison network.
How Liverpool prison became 'UK's worst jail'?
Ministers under fire over 'squalid' Liverpool jail
Impoverished healthcare at Liverpool prison, report says
Despite this the Dutch judges ruled there was a "real risk of inhuman or degrading treatment" should the suspect end up at any of the three jails.
The judges concluded: "In these circumstances, the expectation that the situation will improve rapidly is not sufficient to assume that the real risk of inhumane treatment has actually disappeared.
"The already established real danger of inhuman or degrading treatment in these establishments has not been eliminated."
A report by HM Inspectorate of Prisons in December 2017 said they could not recall seeing "worse living conditions than those at HMP Liverpool".
Rats and cockroaches were rife, with one area of the jail so dirty, infested and hazardous it could not be cleaned, inspectors found.
Some prisoners live in cells that should be condemned, the report said, with exposed electrical wiring and filthy, leaking lavatories.
One released prisoner told the BBC: "The cockroach problem was so bad, you can hear them gnawing at you at night."
Another said a leaking toilet in his cell had led to him "waking up with the pad swimming in urine".
Since then, inmates at HMP Liverpool have been cleaning and painting the prison in order to transform what were described as "filthy" conditions.
Prisoners were trained as joiners, painters and industrial cleaners and earned qualifications while improving their surroundings.
One inmate who helped the project said it was "like being in a different jail".
There does appear to be an evolving sense in the Conservative party that views Privatisation and Outsourcing of Public Services as one way of delivering public services but whose consideration is about what works best. Meaning that some services may be suitable but not all. This is encouraging as I have previously viewed their underlying desire to privatise and outsource as a zombie ideology where they stagger around aimlessly privatising and outsourcing whatever they can get hold of. Probation being a prime and disastrous example and now at risk of zombification itself. Reunification is in my view is the way to start to re - humanise Probation services.
ReplyDeleteZombification has already been implemented; its a work in progress.
DeleteIf you opt for full Zombification you'll be in with an excellent chance of promotion in the reunified service under HMPPS (HM Piss Poor Service). Zombies don't need regular pay or payrises - they just need to be told what to do by zombie chain-of-command.
Delete