Tag Archives: contractor

Reinventing the wheel: after replacing civil servants with expensive private consultants, Cummings wants to replace them with… a civil service

Caught out: Dominic Cummings and his puppet Boris Johnson are pretending to be creating a shiny new way to stop spiralling consultancy and private contractor costs for the government – but in fact they are simply trying to revive the civil service after successive Tory governments spent the last 10 years running it into the ground.

Dominic Cummings – what an absolute, utter, dunderheaded nincompoop.

After months in which the Tory government under his puppet Boris Johnson has been doling out cash hand over fist to expensive private consultants for help on Covid-19 – and getting nothing in return…

… and years in which the Tories have been disparaging the expertise of the civil service, pushing leading public servants to quit forever…

Cummings has decided that private consultants are just too expensive and the government should consider creating an in-house organisation for service provision instead.

He has given it a snazzy new name: the Crown Consultancy. The concept will be more familiar to you as the Civil Service.

The plan was presented to the public via the Financial Times – which is behind a paywall, so I’ve been referring to a report in The London Economic instead:

“There’s a lot of reliance on consultancies,” one source close to the plan told the paper. “It would be sensible to look at what we can do internally, rather than externally.”

Isn’t that a description of what the Civil Service does?

This is a story about government spin.

The real headline is that the Conservatives have wasted billions – perhaps hundreds of billions – on private rip-off merchants since they came back into office in 2010, because of their well-professed distrust of so-called “experts”.

Between 2016 and 2020, Britain spent £2.6 billion on just eight consultancies – including KPMG, McKinsey, Deloitte and EY.

The coronavirus crisis has seen the government’s reliance on private-sector consultancies spiral, with at least £56 million spent for help with issues as wide-ranging as data analysis and supplying PPE.

Only £56 million? I make it £100 million – and all because neither Boris Johnson nor Dominic Cummings could be bothered to think for themselves.

But of course these figures do not include the sums spent on private companies recommended to provide services by these consultants.

Look at the privatisation of the probation service: £2.5 billion went down the drain in that disaster.

Related to that, what about the scandal of privately-run prisons, in which G4S was fined £2.7 million for more than 100 breaches of its contract with the government. Considering the size of the fines, how much was that contract worth?

Or we could consider the fiasco that is Universal Credit. How many billions has that cost by now? I reported on this in 2013 and costs have spiralled upwards exponentially since then.

My report on Universal Credit also mentions that “Michael Gove’s Education Department is now in a terrible mess because he brought in a gang of “advisors” to operate “above” his officials – who have meanwhile faced huge cuts in their workforce and a disastrous fall in morale” and refers to a report on This Site in June of that year.

Who took the blame for the private enterprise failures in the DWP and Education? The Civil Service.

In my June 2013 report, I described the policy as: “Blame the Civil Service for everything, cut it back, and leave the actual mechanics of government unusable by anybody who follows them.

Well, it seems I was right.

And now the Tories are reaping what they have sowed. Their scorched-earth civil service policy has cost them billions and they are still in office to take the blame for it.

Except, of course, that their client journalists in papers like the FT are happy to spin it into a story about a shiny new organisation to save the day, rather than admit it’s just an attempt to revive an old service they ran into the ground.

Well, we’ve all seen through it:

Source: Johnson wants a ‘Crown Consultancy’ to stem private sector spending spree

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Did ‘body parts stockpile’ firm come unstuck because of an unrealistically-low bid for the contract?

Skwawkbox found this report, suggesting the contractor’s bid was too low.

Fellow left media site Skwawkbox has uncovered a new aspect of the ‘body parts stockpile’ scandal – that private firm Healthcare Environmental Services’ bid for the contract was unrealistically low.

It would be easy to lay all the blame for the current situation on the company – but if it is a money problem, it really is just another symptom of the Conservative government’s mania for providing public services on the cheap, no matter how bad the service then turns out to be.

Private companies make their bids artificially low – because they know the lowest bid will get the contract.

And then the contractor fails to do the job because the money it requested isn’t enough.

You’d have thought the Tories would have learned their lesson from Carillion.

They should have reviewed all private contracts after that fiasco.

If they didn’t, this scandal is less the fault of the company than the government.

ADDITIONAL: It seems a criminal investigation has been launched into the behaviour of Healthcare Environmental Services after the Environment Agency said the company had breached environmental permits.

It seems I was right: The Tory government is trying to blame the contractor for a scandal they caused themselves.

A private firm with a public contract for disposing of clinical waste has been unable to execute its contract in a ‘timely’ fashion, leading to a ‘pile up‘ of hundreds of tonnes of human body parts and other waste.

But the Department of Health’s management organisation for the English NHS, NHS England (NHSE), was told well over a year ago that the price bid by the winning contractor, Healthcare Environmental Services (HES) was ‘abnormally low‘ – and it went to court to defeat a legal bid to overturn the contract award.

Another firm that competed in the tender, Stericycle (then called SRCL), lodged a complaint that the winning bidder had put in a price that was unrealistically low. Stericycle’s legal action was an attempt to overturn the award – but was defeated in the High Court in July.

Source: Govt was warned body-parts firm’s bid was unrealistically low | The SKWAWKBOX

Lack of investment means waste firm with NHS contract has been stockpiling human body parts

The waste organs that have been stockpiled are the products of surgery, in many cases.

Lack of investment in the UK’s capacity for high-temperature incineration has created a ghoulish stockpile of human body parts awaiting proper disposal.

The company with the contract (of course, it had to be an issue with outsourcing to private contractors) to dispose of National Health Service waste including amputated limbs, infectious liquids and cytotoxic waste connected with cancer treatments is Healthcare Environmental Services Ltd.

And it is pleading innocence. For once, the contractor is not to blame, it seems.

The evidence is that the UK’s ability to incinerate this dangerous waste has diminished because the UK’s aging high-temperature incinerators have been allowed to fall into disrepair, meaning they break down for prolonged periods – and “zero waste to landfill” policies mean the little time that is available has been earmarked for other purposes.

This is clearly a failure by the Conservative government.

It seems the government was notified that too much waste has been building up, back at the end of July this year. But Healthcare Environmental says it has been warning environmental regulators – government environmental regulators – for the past year, and had been highlighting the reduction in incinerator capacity for several more years prior to that.

So the government has known about the problem for years.

And what has it done?

It told the company to make the waste organs safe by putting them in refrigerators. Brilliant.

Shadow health secretary Jonathan Ashworth isn’t satisfied at all. He said: “These are staggering revelations and given the number of NHS Trusts involved, along with wider environmental health implications, I’m disappointed the Health Secretary didn’t inform Parliament last month.

“We need a statement in the Commons next week from ministers detailing when the Government was first informed of this stockpiling, what support is now available to Trusts and what contingency plans are in place for the future.”

Personally, I wonder if this is an issue that has fallen through the “austerity” gap.

When David Cameron started slashing government investment in public services, he assumed that gaps in provision would be filled by the private sector, with profit-motivated companies rushing in to make a buck or two. Alternatively, he suggested that not-for-profit organisations would take over in some areas, in an intiative he called “The Big Society”.

The problem was that “The Big Society” disappeared without a trace and private enterprise didn’t touch anything that didn’t show an opportunity for quick profit. This was a time of recession, remember – there wasn’t the cash available for heavy investment.

It seems to me that Cameron had painted himself into a corner. He had managed to slither into office on the basis of his claim that he could make everything better by getting everybody to tighten their belts, but had actually meant the poor and working people would pay, while people of his own class would profit (they have tripled their incomes while the rest of us struggled on real-terms cuts in wages and/or benefits).

In short, he couldn’t get Big Money to pay for modernisation, and he wouldn’t pay for it with the public purse.

So he ignored it.

Now he is long gone, and Theresa May is in charge of a Tory government that is falling apart – not least because the consequences of Cameron’s cuts are coming home.

This is just one of them.

Theresa May announced that austerity was over in her conference speech (yes, I know it was a lie).

As the bills arrive for modernisation of the services Cameron neglected, I wonder how long it’ll be before she announces that it is reinstated?

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Why are poor taxpayers being told to subsidise Carillion’s contractors?

Carillion owed huge sums when it went into liquidation in January [Image: Joe Giddens/PA].

It must be lovely, being an executive or shareholder at a big corporation like Carillion – knowing that you can siphon off as much cash as you want and when your firm goes under, the poor will bail you out.

Hundreds of millions of pounds went into executive/shareholder bank accounts in the years when Carillion was under-bidding for government contracts.

That was public money; it should have been used to provide services, not bolster some businessman’s bank balance.

And now public money is being used to underwrite loans to the contractors Carillion betrayed.

As far as This Writer can see, Carillion’s executives and shareholders committed fraud by under-bidding for contracts; they knew they couldn’t honour those contracts at those prices, and were hoping that the funds for future contracts would pay off their liabilities.

It was like a pyramid selling scheme; sooner or later it was bound to collapse.

Well, unless Her Majesty’s Government and everybody who works for it are really inept, we’ve got the names and details of everybody responsible for Carillion – and the company has a vast amount of assets that should be sold to pay off its debts.

I want to see those assets sold off, and prosecutions of executives and shareholders to recover the public money they took under false pretences, with the proceeds used to pay the £100 million the government is putting up at the moment.

Agreed?

Contractors hit by the collapse of Carillion will be able to apply for government-backed loans from high-street lenders as part of a £100m support package.

The business secretary, Greg Clark, said the British Business Bank would support high street lenders to give loans to small and medium-sized businesses, and individuals owed money by the failed outsourcing giant.

The move comes after three high street banks agreed to provide “tailored support” worth almost £250m to those facing a hit from the company’s collapse.

Carillion owed huge sums when it went into liquidation in January, putting thousands of jobs at risk.

The latest financial support measure will provide support to high-street lenders that might not otherwise give loans to Carillion contractors because they may lack the required assets for security.

Source: Carillion: government to back loans to firm’s struggling contractors | Business | The Guardian


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Carillion protected bosses’ bonuses before running into financial crisis

Bonuses: Carillion is under pressure to recoup some of the millions of pounds shelled out to former chief exec Richard Howson (pictured) and ex-finance chief Richard Adam.

What an astonishing coincidence!

And what an amazing stroke of luck that these executive bonuses were protected months before anyone had any idea that Carillion would get into financial trouble.

Isn’t it?

Now, instead of having to fund the hole in its finances from its own resources, Carillion and its lenders are expecting us – you and me – to subsidise its failures. Here’s Martin Shovel to explain, better than This Writer managed in my previous article:

Troubled engineer Carillion introduced tougher rules that protect bonuses paid to bosses – just months before it was embroiled in an accounting crisis that wiped £600 million off its shares.

The firm changed the wording of its pay policy to make it harder for investors to claw back bonuses paid to executives in the event it ran into financial difficulty.

Essentially, this means that executives would have to be guilty of fraudulent behaviour rather than just the more general failure of the firm.

In recent days Carillion has been under pressure from investors to recoup some of the millions of pounds in bonuses paid to former chief executive Richard Howson and ex-finance chief Richard Adam when they were in charge.

A probe by the Mail has found that previously bosses could have been forced to hand back their annual bonus and share awards in ‘circumstances of corporate failure’.

Source: Carillion protected bosses’ £4m bonuses before crisis | This is Money


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Where are the sanctions for employers failing to offer additional hours?

'Daftie' Duncan Smith before a previous hearing of the Work and Pensions committee.

‘Daftie’ Duncan Smith before a previous hearing of the Work and Pensions committee.

It’s a valid question.

More than a year ago, Work and Pensions Secretary Iain Duncan Smith told us “In work conditionality” within the Universal Credit system could encourage part-time workers and the low-paid to seek additional hours.

But it seems nothing is being done to “encourage” employers to provide the extra work.

So what, exactly, did Duncan Smith think he was playing at?

It seems we may soon find out, because Disability Studies specialist and disability activist Samuel Miller has written to the Secretary-in-a-State and his employment minister, Priti Patel, to find out whether employers will face sanctions for refusing  to offer part-time and low-paid workers additional hours.

“My field of interest is disability,” wrote Mr Miller. “If the British government is truly interested in increasing employment opportunities for the disabled, why doesn’t it follow the U.S. example and compel businesses to significantly increase the number of people with disabilities that they employ?

“The U.S. rule requires most federal contractors to ensure that people with disabilities account for at least 7 percent of workers within each job group in their workforce.

“While officials at the U.S. Department of Labor say they are not establishing a firm hiring quota for contractors, they do expect that businesses servicing the government will work toward achieving the target. Contractors that fail to meet the goal and do not show sufficient effort toward reaching the 7 percent threshold could lose their contracts under the new rule.

“Disability advocates say the added pressure on federal contractors will go a long way—and, in my opinion, Britain should follow suit.”

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Coalition is warned off ‘quasi-monopoly’ firms

Bad choices: This infographic (from the Daily Mail's 'This Is Money' column) shows the effect on Serco of its involvement in overcharging for tagging prisoners.

Bad choices: This infographic (from the Daily Mail’s ‘This Is Money’ column) shows the effect on Serco of its involvement in overcharging for tagging criminals.

The government should be less reliant on a handful of “quasi-monopoly” private sector contractors like Serco and G4S in future, if it has any sense – according to the Commons’ Public Accounts Committee.

Isn’t it a shame that we already know the Coalition Government doesn’t have any sense – the committee’s report said as much when it criticised government departments for continuing to hand work over to the named companies while they were being investigated for overcharging.

We can bank on the Coalition awarding further contracts to these big firms, too.

The Public Accounts Committee said in its report that there needed to be more competition in the £90bn market for private outsourcing of public services.

Some might say that public services should not be performed by private contractors at all, but it seems there is a logic to it. Why create a government department for cleaning services when you can hire an existing firm more economically?

This seems to be the way the PAC is thinking, as MPs said contracts should be split up to give small and medium-sized firms a better chance of getting business – and to prevent a situation where a handful of firms were “too important to fail” despite questions about their performance (a clear reference to the financial crisis, in which the government had to use public funds to shore up “too big to fail” banks).

Government departments trust contractors too much and rely too heavily on their information, the PAC stated. This clearly provides opportunities for corruption – in a country where PricewaterhouseCoopers can provide advisors to both the government’s Mark Hoban and the opposition’s Rachel Reeves, one is inexorably drawn to the conclusion that the firm’s advice will be to its own advantage and that of its clients – not the nation’s.

But the committee said the government should be taking a much harder line on firms whose “ethical standards have been found wanting” and criticised departments including the Ministry of Justice (MoJ), the Ministry of Defence, the Department of Health, the Department for Business, Innovation and Skills and HM Revenue & Customs for continuing to award them additional work while a criminal inquiry by the Serious Fraud Office into overcharging was continuing.

141210G4S

It said the electronic tagging contracts were not isolated cases, with two other G4S contracts with the MoJ having been referred to the SFO while another Serco contract with the MoJ was being investigated by the City of London Police.

In response, the Cabinet Office said changes made to the government’s procurement and commercial management since the last general election in 2010 had brought savings of £5.4 billion last year, indicating clearly that ministers don’t understand the problem.

There is no point in saving money if the job is not being done properly!

A spokesman told the BBC: “Our action over the past year shows how seriously we take breaches of those high standards.”

Not very seriously at all, then.

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The great wage con is keeping you poor

minimum-wage-poverty

Is anyone else sick of employers bleating that the minimum wage is hindering their business?

They must think we’re all stupid.

A few of them were on the BBC’s Any Answers on Saturday, saying the minimum wage keeps pay down, and that people can’t afford to go to work – especially if they live in London – because their housing costs are paid by benefits. This is nonsense.

The minimum wage is exactly what it claims to be – a minimum. And if people aren’t getting up to work for it because benefits give them more, we can see that it is not enough.

But let’s take this further: We all know that Landlord Subsidy is being restricted – especially in London, where landlords charge more than in the rest of the country. This means that people on low incomes in rented homes will be unable to pay the bills and will be forced to move somewhere cheaper (if they can find it), as intended by our extreme right-wing government.

Where are all these minimum-wage employers going to find their minimum-wage workers then?

Even that isn’t the limit of it, though. We know from such sources as the summer’s excellent Dispatches documentary on Channel 4 that employers have found ways around the minimum wage.

  • They have taken people on as self-employed contractors who are paid a flat rate for a day’s work – no matter how long that work takes – and being self-employed, these people pay their own taxes and National Insurance, and get no time off for holidays or if they are ill.
  • They have taken on workers on part-time contracts, meaning reduced or non-existent holiday and sick pay entitlements – and then boosted up their hours to full-time levels with fake ‘overtime’ offers.
  • They have employed workers on zero-hours contracts, meaning they can demand an employee’s presence at any time and make them work for as long – or short – a period as required. Again, there are no tax administration obligations, NI, sickness or holiday benefits.

The result is very nice for a government of liars such as the current Westminster administration, because it seems they have managed to increase employment (in fact the last figures showed unemployment is greater than at the end of the Labour administration in 2010, but by such a small amount that it’s not worth mentioning).

Production, on the other hand, has remained flat. If more people are in work, it should have increased.

That is how we know we are looking at a con.

If more people are in work but production hasn’t gone up, we must question the incentive for this increased employment. It has already been mentioned: The lack of holiday and sick pay entitlement, National Insurance and tax admin obligations. The larger the employer, the larger the saving – but this doesn’t mean small firms aren’t feeling the benefit.

The minimum wage worker’s income is topped up by benefits – but the government is cutting these back. Landlord Subsidy in London won’t be enough for people on the kind of contracts described here to stay in their homes, and this means a consequent job loss if they have to move out of the area.

Tax credits are being removed; child benefit restricted. Universal Credit (if it ever works) will operate in real-time, adjusting benefits to ensure that low-paid workers remain in an income trap for as long as their wages remain below a certain level.

Employers reap the benefits. But even they are being conned, because this can’t last forever.

Imagine a Britain without in-work benefits but where the living wage has not been introduced nationwide (this will be a reality in a few years, under a Coalition or Conservative government). Workers on the self-employed, part-time or zero-hours contracts described here will not earn enough to survive.

Private debt will increase exponentially, leading to increased mental illness as the stress of trying to cope takes its toll on the workforce. Physical illness will increase as people cut back on heating in their homes and food in their fridges and larders. Result: malnourishment and disease.

What happens then? It’s hard to say. It may be that employers will take on increasing numbers of cheap foreign workers – but there is already resentment at the influx of immigrants from the European Union and this could lead to civil unrest.

It seems likely that the largest firms will leave these shores. If we compare them to huge parasites – and we can – then the host will have been drained almost dry and it will be time to move on and find another to treat the same way. These are the companies who have reaped huge rewards from tax avoidance, aided by the ‘Big Four’ accountancy firms – KPMG, Deloitte, PricewaterhouseCoopers and Ernst & Young – who have been writing – into British law – ways for them to get out of paying their share.

The smaller employers might keep going for a while or collapse; it depends how much their bosses save up for the inevitable crash. Deficit financing of their business will support them for a while but, if they don’t have any ideas, they’ll go under.

All because a few very greedy people just won’t pay a reasonable amount for a hard day’s work.

They get on the media, telling us they can’t afford higher wages. In that case, why are they even in business? If they need a workforce of a certain size, but cannot pay a living wage, then they simply should not bother. All they are doing, in the long run, is contributing to a monumental confidence trick that will cause immense harm to the economy and the nation’s health.

Of course, the UK did not always have in-work benefits. People used to be paid enough to make ends meet. We should be asking why that changed and who benefits. A return to that situation would benefit the country enormously – but it isn’t going to happen on the minimum wage, and it isn’t going to happen on zero-hours contracts.

It’s time to name these firms and ask bosses who employ on these terms why those contracts are necessary and why they feel justified in the damage they are causing.

And while we’re at it, it’s time to ask our MPs why they tolerate it, too.