Omnishambles Update 12

Lets kick this off with yet another thoughtful blog post from someone who feels that 'outsourcing' or privatisation as I prefer to call it, is not the best way of doing things, and certainly not the best way of achieving cost savings or improved services. 

Writing in the Huffington Post, independent strategic adviser John Tizard says quite clearly that it's time for the tide to ebb in terms of more public sector outsourcing:-    

Whilst acknowledging that there are clear differences between and within Whitehall departments and between local authorities or NHS trusts, in truth the narrative and justification for involving the business sector in public service delivery has never been consistent. I recall arguments such as the need to: increase capacity; reduce costs; leverage investment; address underperformance; source scarce expertise; transfer risk (although actually, ultimate risk is hardly ever transferable); tackle poor industrial relations (and sometimes to take on the trade unions); and in some specific cases, extending choice to service users. Sometimes it has been for ideological reasons.

The reality, however, is that evidence that outsourcing to the business sector is better (or worse) than retaining services within the public sector is often hard to prove, for it's practically difficult to compare with an untested alternative. That said, what evidence does exist suggests at best a very mixed picture and nothing like as glowing a success as some marketing presentations or political promotions might suggest. Some early examples of success are not repeatable. Times and conditions have changed

It is a fact that early outsourcing initiatives often led to significant savings (either through productivity improvements or deep cost cutting) with variable quality service provision - but increasingly and unsurprisingly, the public sector has become more efficient and able to itself improve and reform. It's also easier to measure benefits in services such as 'back office' support than it is in services with more complex services with complex outcomes. And whilst there are some examples of outsourcing of such complex services which have been to be successful many have not. The contemporary public sector leader would be well advised to also consider alternative models of service delivery and not simply to pursue outsourcing as the natural and inevitable model.

He goes on to explain in some detail that things have moved on and the outsourcing argument is now just so 'last year' as a concept, thus only leaving ideology as covert justification. 

Meanwhile, despite the denials, there's clear evidence that Chris Grayling is still intent on pursuing the privatisation of the courts service. There's been a suspicion for some time that he's been trying to charm the judiciary round to his way of thinking, and astonishingly he seems to be succeeding as Joshua Rozenberg writing in the Guardian discovered from a document leaked last month:-    

The very idea that private companies should be allowed to invest in the courts of England and Wales is extraordinary enough. But what is so breathtaking about the judicial response leaked to the Guardian and reported here by Owen Bowcott is that, subject to important safeguards, the judges would be willing to go along with it.

First news that something was afoot came in a deliberately low-key statement to parliament on 26 March from the justice secretary and lord chancellor, Chris Grayling. Explaining that it was necessary to raise revenue and increase investment in the courts, Grayling said he had asked his officials "to consider appropriate vehicles to achieve these aims".

Since running costs are clearly no object when there is money to be made, Ministry of Justice officials chose the Rolls Royce of managements consultants and lawyers, McKinsey & Company and Slaughter and May. We can take it that McKinsey are advising the government on structures and Slaughters are advising on raising capital.

The paper leaked to the Guardian represents the judges' view of how the courts administration service might be restructured. It was signed by Lord Justice Gross, the senior presiding judge, on 8 May.

In it, the judges frankly accept the "weakness of the present arrangements" for running the courts. This is the currently the responsibility of a body called HM Courts & Tribunals Service (HMCTS), an agency of the Ministry of Justice created two years ago. Uniquely, HMCTS operates as a partnership between the lord chancellor, who is a government minister, and two serving judges, the lord chief justice and the senior president of tribunals.

HMCTS is responsible for administering all the criminal, civil and family courts and tribunals in England and Wales. It has a budget of £1.7bn but recovers only £585m in fees. You can see why the government sees room for improvement.

From the judges' point of view, the problem with HMCTS is that it is a servant with two masters: the government and the judiciary. HMCTS is unable to raise capital and does not enjoy security of funding from a lord chancellor who has many other responsibilities.

So the judges believe that HMCTS is "not an attractive option for the long term — and likely to become increasingly unattractive as Treasury cut-backs and other fiscal constraints have increasing effect".

That is why the judges are willing to support a successor body, which they refer to as "New CTS". As envisaged by the judges, New CTS would be free to attract private-sector capital investment and raise revenue.

It's quite astonishing, but as evidenced by a recent letter to all judges from Chris Grayling and the top judges, they've been thoroughly seduced into the concept that a public corporation could raise money and do things better, but that it definitely wouldn't be privatisation.

I've written quite a bit about G4S recently, but we must try and be balanced so I'm grateful to a reader for pointing me in the direction of this recent article in the Guardian about Serco. I've always felt they were particularly scary having started out out as a branch of the Radio Corporation of America who basically built and operated the UK/USA Distant Early Warning System watching for Russian Ballistic Missiles during the Cold War.

Having changed their name and morphed into Serco, as the article makes clear, there isn't an area of operation that they regard as off limits as they effectively develop into a scary 'shadow state'. Effectively we know nothing about companies like this because all requests for information either to them or government are always refused on the grounds of 'commercial sensitivity' and of course they are protected from the irritation of the Freedom of Information Act.

What this company now runs is truly staggering, they're moving into health and their reach is global:-

But the basic facts are plain enough. As well as five British prisons and the tags attached to over 8,000 English and Welsh offenders, Sercosees to two immigration removal centres, at Colnbrook near Heathrow, and Yarl's Wood in Bedfordshire. You'll also see its logo on the Docklands Light Railway and Woolwich ferry, and is a partner in both Liverpool's Merseyrail network, and the Northern Rail franchise, which sees to trains that run in a huge area between the North Midlands and English-Scottish border.

Serco runs school inspections in parts of England, speed cameras all over the UK, and the National Nuclear Laboratory, based at the Sellafield site in Cumbria. It also holds the contracts for the management of the UK's ballistic missile early warning system on the Yorkshire moors, the running of the Manchester Aquatics Centre, and London's "Boris bikes".

But even this is only a fraction of the story. Among their scores of roles across the planet, Serco is responsible for air traffic control in the United Arab Emirates, parking-meter services in Chicago, driving tests in Ontario, and an immigration detention centre on Christmas Island, run on behalf of those well-known friends of overseas visitors the Australian government.

In the US, the company has just been awarded a controversial $1.25bn contract by that country's Department of Health. All told, its operations suggest some real-life version of the fantastical mega-corporations that have long been invented by fiction writers; a more benign version of theTyrell Corporation from Blade Runner, say, or one of those creations from James Bond movies whose name always seems to end with the word "industries".

Until I read this, I hadn't thought of the obvious reference to the Tyrell Corporation and my other favourite film 'Bladerunner'. To be honest, learning that the guy in charge is an evangelical Christian doesn't make feel any too easier about things either.

Finally, news reaches me that the senior management team at London Probation Trust are getting very upset with Napo's campaign leaflets appearing in waiting rooms and other 'offender areas' and ordered their immediate removal.