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In the meantime, here’s some information from a VP reader (who very kindly asked not to be credited) on some of our favourite private companies with entire fists – never mind fingers – in the public sector pie.
With around half of all public sector spending now paid to private companies, lets look at some facts about the four largest recipients – Serco, Capita, Atos and G4S.
In total, they have received more than £4 billion of taxpayers’ money in the past year, making a cumulative profit of £1.05 billion. This means that, if the work had been carried out within the public sector, the taxpayer would have saved more than a quarter of the money used. That’s a lot of money!
With Corporation Tax currently standing at 23 per cent, let’s look at how much tax they paid: £75 million (around 7.5 per cent).
But the situation is actually worse than that! This is only the tax paid by Capita and Serco.
Atos and G4S paid no tax at all.
Furthermore, none of these companies has successfully delivered the public services they were contracted to carry out, despite having been paid anyway. Did G4S successfully manage security at the 2012 Olympics, or was that the British Army? Did Capita provide adequate court translation services? Has Atos carried out work capability assessments for Employment and Support Allowance in a professional and unproblematic manner? What about Serco and out-of-hours GP services?
These firms have been content to take taxpayers’ money but avoid paying tax on it, and then provided botched services. Two of them – Serco and G4S – are currently under investigation by the Serious Fraud Office for overcharging on electronic tagging of offenders.
It seems we were paying for these companies to monitor 3,000 phantom offenders. They were charging for 18,000 while only 15,000 were being monitored.
Coalition Justice Secretary and part-time clown Chris Grayling told MPs in July that an external audit had revealed the overcharging, which included bills for tracking the movements of criminals who had moved abroad, who were back in prison, who had had their tags removed and even, in a few cases, those who had died.
Even so – and despite sanctions against the companies as a result, the scenario presented in the image (above) is still possible, thanks to the Coalition government.
Outsourcing – a good deal for taxpayers? You decide…