Month: January 2018

The collapse of Carillion afforded the Labour party the chance to gain political ‘brownie points’ with the Scottish public … and they jumped in with both feet firmly placed in the mouth.

Jeremy Corbyn immediately ran to the press and said that Labour would seek an end to the ‘outsourcing racket’ and the ‘dogma of privatisation’ rife in Government procurement of services. Bold words Mr Corbyn but those assertions can be answered with three simple letters……… PFI.

PFI (Private Finance Initiative) was a scheme whereby private finance was used to build public amenities which were then paid for by way of a ‘mortgage’ over a prolonged period, usually 25 to 30 years. Sounds like a deal but it comes at a very severe cost to the public purse and saddles later administrations with huge funding difficulties.

PFI in the UK was first introduced by the Tory Party in 1992. The Labour Shadow Treasury spokesperson, Harriet Harman immediately slated the idea and called it ‘a back door to privatisation’ of public services. It looked like PFI was doomed as soon as Labour managed to get their hands on the keys to 10 Downing Street but the truth is the exact opposite. Fast forward to 1997 with arch Neo-Liberal Tony Bliar led Labour into power …

One of the first pieces of legislation passed by the new Labour administration at Westminster was the NHS (Private Finance) Act 1997. This act took the 1992 PFI initiative of the Tory party and expanded its reach and influence into the NHS across the UK. Labour did not stop there. In 2003 that dogma extended to London Underground. In 2005 it encompassed the building of schools and other public service buildings. The initial Labour opposition to PFI simply evaporated. By 2007 the cost of the projects built by Labour under the PFI schemes across the UK was £65 billion. That effectively saddled future administrations with a bill of  £215 billion … three times more than the original cost of the projects and that extra money was being funnelled directly into private hands through companies exactly like Carillion. It was, indeed still is, a licence to print money for the private sector.

Scotland did not escape the menace. The first two administrations to run the new Holyrood Parliament from 1999 were Labour coalitions with the Liberal Democrats. These coalitions seized the opportunity to show that they were in charge by openly embracing the PFI initiative of Labour at Westminster and immediately launched a series of public works, all funded by private capital. Over the next few years a total of £5.2 billion was ‘spent’ on schools and other public works through the system. The current liability due by the now SNP administration at Holyrood amounts to some £22.3 billion. That debt must be serviced by the Block Grant from Westminster, a debt that was built by Labour and the Liberal Democrats between 1999 and 2007. That Block Grant is being slowly but surely eroded by the Westminster Government in the name of ‘Austerity’ and the costs are mounting, the ability to repay the Labour ‘debt’ diminishing on a regular basis. It is effectively tying the hands of the Holyrood administration as a rising percentage of the Block Grant must be set aside to pay for the decisions of a previous Labour/Liberal Democrat administration.

This leads back rather nicely to the duplicitous political opportunism displayed by Mr Corbyn in the newspapers. His claims that only Labour will end the ‘outsourcing racket’ and the ‘dogma of privatisation’ has a very hollow ring to it when the facts about PFI and the Labour party are known. Labour attacked the PFI schemes when they were introduced by the Tory party in 1992, they wholeheartedly embraced and expanded that same scheme across the UK between 1997 and 2010 and effectively saddled the current administration with £22.3 billion of debt, and now, following the collapse of Carillion, they are back to attacking the scheme and promise to end it. Really? Is there any substance to that claim or will it simply be yet another empty gesture? Another bare-faced attempt to claw back the political moral high ground? Remember that Labour have a record of saying one thing and doing another … all I have to say is ‘Zero Hours Contracts’, Mr Corbyn. Labour have been promising to end that practice since 1995 when Bliar was elected Labour leader. They did nothing about it when they were in power at Westminster between 1997 and 2010 did they? Look it up, they actually increased the use of that practice while they were ‘fighting’ to end them.
This all adds up to one conclusion and one conclusion only … NONE of the Westminster based party machines can be trusted, none of them. All Westminster based political parties are equal but Labour are more equal than the rest. This is yet another reason why we simply must take control of our own destiny by getting away from this shameful ‘Union of Equals’. Independence is now the only way we can do that … Labour cannot be trusted.

The recent collapse of Carillion has served to finally expose the ‘Great Con Trick’ that is Public Service Out-Sourcing. This procedure is promoted by those of a right-wing persuasion as a way of ‘saving’ money, ‘improving’ services and increasing ‘efficiency’ to benefit the public…. Only it patently does nothing of the sort. The practice began with the infamous Maggie Thatcher, continued under the Red Tory Neo-Liberal that was Tony Bliar, further enhanced by the Tory/LibDem Doomsday coalition of 2010-2015 before the baton was picked up by the current right-wing coalition of Tory/DUP.

The collapse into oblivion of that doyen of the ‘Privatisation’ ethos that was Carillion shows how far the tentacles of that ethos reach. Carillion was born from an infrastructure company and, with a combination of political positioning through cash donations to that very Tory party and sheer unadulterated greed for (Tory awarded) Public Service contracts, it became a behemoth of a company that considered itself too big to fail, until it did indeed collapse in on itself like the public cash black hole it was.

Read through this excerpt from the BBC News website concerning one small company that sub-contracted from the Carillion cartel…… read it carefully and inwardly digest the meaning.

“Shaun Weeks runs the cleaning firm Paragon Services. He told BBC 5 live Breakfast they had withdrawn the cleaner they had working full-time in a local prison.

“We’d been chasing them for money, we hadn’t been paid since July and when we heard the rumours about a week-and-a-half ago that Carillion were in a lot of trouble, we really pressed.

“Fortunately for ourselves, we did actually get paid the money that was owed to us for the work that she’d done between August and November.”

Having read that… consider this.

Carillion held the contract to supply a cleaner for that prison, they sub-contracted that service out to the company run by Mr Weeks, who then in turn engaged the lady who actually did the work. It all sounds organised, very efficient doesn’t it? Not really.

In the days before the contract was awarded to Carillion it can be assumed that the prison employed a cleaner to carry out the necessary work. That cleaner had a secure job, an acceptable salary and, beside the usual employment costs related to PAYE contributions, would only have required a minimal additional cost to the prison staff Personnel Department. The cleaner would have held a sense of attachment to the prison staff ‘family’, a sense of belonging that usually invokes pride in her job. Then it was decided to end that relationship.

The Government decided for whatever reason, and it is normally declared as being ‘in the public interest’ or ‘to be more efficient and save public money’, decided to privatise that particular cleaning service and outsource the contract….. they put the ‘con’ into contract. Carillion, presumably for the reasons mentioned at the start of this article, were awarded the contract. They tendered for the work for a price that was agreed, a price we can only guess at as it will be ‘confidential information’ between a Government Department and a Private Company. Carillion had no intention of actually employing that cleaner to carry out the contracted work so they sub-contracted the work out to the company run by Mr Weeks…. who then employed the cleaner.

Look at the situation before and after the decision to privatise the cleaning of that prison.

In the ‘old’ days the prison needed a cleaner, the prison employed a cleaner and the prison was cleaned. The cleaner was a full staff member of the prison staff with a secure job, a decent level of wages and the employment costs of that individual would be combined with all the other prison staff and be relatively modest in nature. It all sounds like an efficient use of public money to run and maintain a necessary establishment…….. BUT then the decision was made to ‘Outsource’ that service.

The contract was awarded to Carillion. Carillion decided to sub-contract that cleaning service as they did not want to employ the cleaner directly. The sub-contract was awarded to Mr Weeks who then employed the cleaner.

Now look at the associated costs involved in this convoluted state of affairs. Carillion would need to employ people to examine the work involved, compile a tender for that work including a portion of available ‘profit’ for Carillion. This is a costly business as the people involved in that tender process are specialists and do not work for peanuts. That work is then further ‘outsourced’ to Mr Weeks who would have had to compile a smaller version of the original Carillion tender for the work. The tender price submitted by Mr Weeks would necessarily have been for a lower amount than the Carillion tender for the contract as Carillion would need to hold back the costs of their initial contract tender. Mr Weeks would then seek out and employ the cleaner to carry out the work.

How many people are involved in the employment of the cleaner now?

The Prison Service have staff employed to look after the award of cleaning contracts…… Carillion have a heavy staff involvement to secure the initial contract and monitor the performance of the sub-contractor, Mr Weeks……. Mr Weeks himself now has employment costs for the cleaner and a profit margin to consider as he is, after all, in business to make a profit, as are Carillion. With all these built-in profit margins to consider just how does the ‘outsourcing’ become more efficient and cheaper than the original employment of a cleaner for the prison? In my opinion it does not, nor can it ever be so, but that is what we are told.

This case is a simplistic look at how outsourcing works and it appears to be a con trick, a way of ‘rewarding’ loyal corporate donors to one party or the other at Westminster. It is a con-trick that is being repeated all over by those of a right-wing political persuasion, a declared alliance to that ethos or not. Our local Council is making noises concerning the disposal of our refuse, and in one case has already ‘outsourced’ the work which led to a number of people losing decent steady jobs. The only way ‘outsourcing’ can be less expensive than the current provision is for the actual workers to be employed on far less beneficial terms and conditions. The ‘private’ companies will have a profit margin built into any tender price and that profit margin has to be provided, someone somewhere will need to lose out. It can only be with an increased cost to the public purse (you and me) in the price paid to the private company or by slashing the terms and conditions of employment for those who actually carry out the contracted work.

There are EU Employment laws to consider in this scenario that guarantee a certain level of working conditions, salaries, time off, holiday entitlements and the like. These employment guarantees severely limit the ability for right-wing Governments and Councils to ‘privatise’ public services or, in other words, reward their Corporate Donors with handsome contracts whilst still claiming ‘efficiency’ savings.

It all starts to provide an explanation for the headlong charge towards Brexit at any cost by Westminster. With these EU Employment Laws consigned to the political dustbin they can charge on and effectively asset-strip the whole Public Sector to the point where they’ll even try to privatise the privatisation process itself. There’s money to be made for the ‘Elite’ and their wealthy political donors. We need to stop this and stop it now. We need out of this Union and fast before it’s too late.