For breakfast, my taste buds were looking forward to pancakes and fruit compote, but sadly pancakes weren’t on offer this morning leading me to plan B choices. After a bowl of fresh fruit, I selected some of the more visually appealing items that were on offer from the cooked breakfast area. The eggs looked unappetising and the bacon was a little dried out and hard.

After breakfast we visited Skipton Castle, which is a lot smaller than I remembered it. Perhaps it feels smaller because now there is a one-way system in place to make sure you see everything. The one-way system means that in some places you can’t explore the castle optimally. I still love the twisted yew tree in the central courtyard.

Whilst exploring the castle I had a humorous moment. Mr C had climbed a spiral staircase and said he would call down and let me know if it was worth the effort for me to climb them. He was gone for some time and he still hadn’t called down. Then, just as a man whose family we had been we had been following round the castle popped his head through the doorway to the stairs, a disembodied voice called down ‘you won’t be missing much’. I had to explain the voice was talking to me, much to the amusement of both of us and he said to me that he was also wondering if it was worth the climb.

We had lunch in the café before exiting the castle grounds to visit the nearby church. The church is small but lovely with interesting historical features. I wasn’t able to purchase the guide book to find out more in-depth information; the shop, although supposed to be open, was closed.

Then we returned to the Edinburgh Woollen Mill which we had visited briefly earlier when we explored the main street before visiting the castle. I purchased a couple of pairs of corduroy trousers to replace some of mine that have worn a little thin. I need them for the cold winter months when I am volunteering at Attingham Park. I also purchased the fun Christmas top that Mr C pointed out to me earlier in the day. I had noticed the top but not the tag line but, once he had pointed it out, I just had to buy. That will have to remain a secret until nearer Christmas when all will be revealed.

On our way back to Harrogate we thought we might visit Bolton Abbey, but the parking charge was  £15 based on people visiting for the day. This did not appeal to us when we would only be there for an hour… We gave it a miss, opting instead for tea and cake in Bettys, Harrogate where we were lucky to have a window seat. We then got a bit carried away with purchases in the shop; we had only gone in for teabags and a small Christmas cake…

Back in the hotel, browsing the internet I noticed that a dress I had missed out on a few days before (whilst I was checking out what size I should order) had been restocked with limited availability. I had been really disappointed to have missed out on what would be a fun dress for the Christmas season so I got Mr C to order it on his phone; I am useless at that sort of thing.

Later we dined in Sukhothai Thai. The restaurant is beautiful with impeccable service, delicious food and vibrant atmosphere. They make a lot of noise, involving xylophones and cymbals when delivering “happy birthday” cake to customers.

We had a nightcap in The Alexandra pub which Mr C had noticed earlier in the day. At last, he was able to enjoy a ‘proper’ beer, we tucked ourselves away in a cosy corner to avoid the televisions screening the football match. After the match the pub emptied and, although the pub was still very much open, we were the last people to leave.

Over 30 years ago Clive Farrell had a dream to create an attraction that would introduce visitors to the wonderment of butterflies. This dream became a reality in July 1985 when Stratford-upon-Avon Butterfly Farm opened its gates to the public.

The Stratford Butterfly Farm has been welcoming visitors to its tropical butterfly paradise for over three decades. The idea and setting up of the Butterfly Farm was the passion and dream of internationally renowned lepidopterist, Clive Farrell. The farm was officially opened on 24th July 1985 by botanist and naturalist, David Bellamy OBE.

Clive’s fascination with butterflies and nature began when he was five years old after finding a hairy caterpillar in his garden. He put it in a matchbox where it spun a cocoon and he watched it emerge as a beautiful Tiger Moth. It was a magical moment that has stayed with him. It is Clive’s hope that a visit to the Butterfly Farm will create such memorable moments for other generations to experience and be inspired by.

Behind the scenes an industrious team works tirelessly not only to bring pupae to Stratford Butterfly Farm but also to export and supply butterfly houses across the globe! To be able to do this we import from a variety of international butterfly farms, providing a sustainable income for the local community and conservation projects.

In 1991, following on from the successful launch of the Stratford Butterfly Farm, Clive joined forces with Ray Harbard to create the Fallen Stones Butterfly Farm in Belize.

The Belize butterfly farm is operated as a nature reserve that sustains local employment without having a negative impact on the local environment. The farm is treasured by the local Kekchi Maya villagers not just for the nature conservation benefits but for the considerable positive impact on the local community where so many young people would otherwise be out of work.

It has a highly successful breeding programme and supplies butterfly houses across the world. These Belizean butterflies can be seen as messengers from the fast dwindling rainforest, to you the visitor. They are infinitely precious and by protecting their natural habitat we protect all the other animals that live there, from jaguars to leaf cutter ants and everything in between!

Many of the beautiful butterflies that can be seen at Stratford Butterfly Farm are supplied by the Fallen Stones Butterfly Farm in the Maya Mountains of Belize. On its doorstep is the ancient Maya site of Lubaantun, which translates to ‘place of the fallen stones’, which is where the farm gets its name from. The people that work at the Fallen Stones Butterfly Farm are present-day Maya and this is the area where the ancient Maya once lived. It is the perfect environment for the types of plants that butterflies need to be able to feed and breed.

This fascinating connection between the Maya and Stratford Butterfly Farm has inspired us to exhibit throughout the farm, Maya and Mesoamerican replica sculptures and interpretation to inform our visitors of the amazing Maya civilisation and their culture.

Following the 2014 ceramic poppies at the Tower of London, which represented the 888,246 British and Commonwealth Service men and women who lost their lives in the First World War, this Tommy commemorates the centenary of the end of the 1914-1918 war and those who lost their lives.

“There But Not There reminds us of those who served in WW1 and did not return home. I believe that alongside each symbolic figure stands the spectre of five others who did return and found themselves so changed by what they had experienced that life for them and their families would never be the same again. There But Not There stands as a powerful symbol for us to not forget them too.”
Lt Gen Andrew Graham CB CBE

They shall grow not old, as we that are left grow old:
Age shall not weary them, nor the years condemn.
At the going down of the sun and in the morning
We will remember them.
Robert Laurence Binyon

In a ministerial announcement it was revealed that it had become necessary to terminate the DTR procurement and Metrix’s appointment as Preferred Bidder because an affordable solution was not forthcoming within the time frame required:

DTR PACKAGE 1 – Collapses.

Introduction

Among all the defence announcements, some of which seem to border upon the insane, is the welcome news that DTR has finally collapsed.

This programme has been limping along for some time, but today the final wheel fell off the wagon.

IPT communicates

Paula Payne from the IPT wrote to MODCSU today. In her letter she noted:

“…you will also be familiar with the challenges with which the project has had to contend:  the separation of Package 1 from Package 2, the withdrawal of Land Securities Trillium as a sponsor of Metrix and the impact of the financial crisis on the costs of funding the project have all been major issues.  They have manifested themselves in an ongoing battle to develop the complex commercial deal within the time required and to make the project affordable.  It has been clear from the outset that this project would only proceed if it was commercially viable, affordable and value for money and Metrix were appointed as Preferred Bidder for DTR in January 2007 subject to these latter two requirements.”

The Ministerial announcement was more forthright in its language:

“The Metrix consortium was appointed as Preferred Bidder in January 2007 subject to it developing an affordable and value for money contract proposal.  Given the significance of this project and the opportunity to provide a world-class training facility, the Ministry of Defence has worked tirelessly to deliver this project.  However, it is now clear that Metrix cannot deliver an affordable, commercially robust proposal within the prescribed period and it has therefore been necessary to terminate the DTR procurement and Metrix’s appointment as Preferred Bidder.”

Metrix heads for the door

Around the Establishments Metrix Liaison Officers are packing their bags and heading out. This is a serious blow to QinetiQ especially, given their dire financial position.

PCS success

Nevertheless, this is a victory for PCS’ strategy of constant engagement with the Department, campaigning and utilisation of information extracted through research and Freedom of Information requests.

The Private Eye carried a constant stream of stories about DTR, provided by PCS, that held the project up to ridicule and PCS worked with local MPs in affected areas, got tabled Parliamentary questions (over 200), lobbied for Early Day Motions, organised Parliamentary drop ins, on line petitions, a 24 hour vigil, supported the Defence Day of Action etc.

MoD has squandered millions of pounds on DTR that could have been spent upgrading training establishments. The privatisation of training was clearly ideologically driven.

What now

We have won a victory but not the war- that much is clear. The IPT will now look at “alternative procurement proposals”, but again the Ministerial announcement makes clear:

“Technical training, collocated on as few sites as possible, remains in our view the best solution for our Armed Forces.  Equally, St Athan was previously chosen as the best location on which to collocate that training for good reasons, and we still hope to base our future defence training solution there.  We will however now carry out some work before finalising the best way ahead; including to confirm both our training and estates requirement, and the best way to structure the solution that will meet them.”

What this means, in reality, is anybody’s guess. However, given the parlous state of MoD finances it is likely that those sites with good infrastructure will remain in situ. The likelihood of a DTC at St Athan looks increasingly untenable, although some HQ function for a virtual DTC is of course a possibility.

The MoD will also have to grapple with the contracts that are coming to an end at Arborfield, Bordon and within the VT Flagship contract with Navy training. These training contracts have been left to wither on the vine as the fell within the scope of DTR- similarly a huge question mark must now sit above the TESC contract to deliver garrison support at Arborfield and Bordon.

The issue of Early Training Transformation will also need close attention. Metrix were given a substantial sum to rationalise training courses. PCS challenged the use of ETT last year- given the uncertainty of the project even then. MoD advised the unions that this work would be utilised even if the project did not go ahead. PCS will be seeking information on just how much of this material is still relevant following the Ministerial announcement.

PCS will also be pressing the DTR IPT for answers on all the above issues at our meeting schedule for November.

Conclusion

Whilst this news is obviously welcome, members need to be aware that other proposals released today by MoD will undoubtedly indirectly have an impact upon training and Instructional Officers and those providing admin support.

Members need to stand together as Civil Servants to protect the services to the front line and to their communities and the public.

Paul Bemrose

Negotiations Officer

The news was covered extensively in Shropshire and Wales, the following links are an example of the reports:

• Shropshire Star, front page – 19th October 2010

• Shropshire Star, inside – 19th October 2010

• News Wales – St Athan £14bn defence academy is shelved (video)

• £13bn military academy to be scrapped (Radio clip)

• BBC Wales – Defence cut hits job prospects for Barry

At this years annual conference the Public & Commercial Services Union (PCS) launched a booklet that provides information on the threats and consequences of privatising public services.  The document builds on  a series of forums that took place during 2009/10.

These forums examined and exposed many past failures of the privatisation of public services and made a case for well funded public services delivered by the public sector.  Although taking this stance the booklet is primarily a discussion document designed to be thought provoking and challenging, seeking to provide further debate on the topics covered.

PCS National Vice President John McInally speaking in his keynote speech:

Those who advocate privatisation forget history:  We must not.  The public services were won, in some cases, by generations of trade union and working class struggle in an effort to establish the basis of civilised existence in a society run for profit not people.  The private sector either could not or would not, or simply failed to provide effective and efficient public sector provision.  The broad mass of people in society, particularly working people, need the public services – generally speaking, the rich don’t.

The establishment of public services represent reforms that the profiteers despise and which they want to destroy or exploit for profit, yet the record of the private sector in delivering privatised services is lamentable.  The presentations by our Research Officers strip bare the political agendas and the performance failures of privatisation in health, transport, justice and other sectors.

The profiteers and the government have created what they shamelessly described as a “public services industry”, currently estimated at £79 bn per annum.  Big business have used the so-called Third Sector, i.e., the charitable and voluntary sectors as a Trojan horse, their words not mine, in order to gain access to government contracts.

John then goes on to say:

The reconfiguration or “reform”, as it is misnamed, of public service is about preparing for eventual privatisation.  Face-to-face contact is discouraged:  it is old-fashioned apparently.  consultants have sold to ministers ans senior civil servants the idea that call centres, telephony and electronic communication can deliver it all.

Of course there is a place for these new methods and technologies, but they can never be a replacement or substitute for the public service ethos of well-trained committed staff dealing with and resolving the complex problems of real people.  Poorly paid and trained staff working from a “one-size-fits-all” script simply cannot deliver an effective service to those who require them.

The proliferation of call centres in recent years has been based on an attempt to establish regimented, factory-style conditions, a remorseless target driven environment, preferably with a transient workforce that is young, inexperienced, non-unionised and compliant.  The strategic aim is to establish as few discrete units as possible to “deliver” the service at the lowest possible cost in order to hand over for privatisation so that profits can be maximised.

The booklet traces the history and origins of privatisation right back to the rise of industrial power:

The roots of privatisations also go back to the early 20th century and ruling class fears that universal suffrage in western societies would mean the erosion of their power and wealth.  As trade unions and mass labour parties looked like achieving the power to place control of natural resources and the “commanding heights” of the economy under democratic control, the business elite mobilised on several fronts to protect themselves.

They responded in two ways – organisationally and ideologically.  Organisationally, employers’ associations such as Aims of Industry combined to counter the rise of democratic socialism.  The goal of Aims of Industry was to “defend private interest against democratic reform with the explicit aim of countering the emerging pressure for nationalisation of industry”.  these days, powerful and influential bodies such as the Bilderburg Group and the Trilateral Commission bring together business and political leaders to develop long-term strategic plans to protect corporate power, destroy trade union influence, liberalise markets, privatise public services and to remove social protections created by national governments and labour movements.

After addressing the history of privatisation the booklet moves on to the application of the privatisation model in the UK and the use of Private Finance Initiative (PFI).

Why PFI?  After the big State Owned Enterprises were sold off by the Tories in the 1980s and 90s, New Labour needed a different method to transfer public services and utilities to the private sector, even thought there was little evidence of better private sector performance.  In thrall to a “private-good, public-bad” mythology, and (more importantly) eager to direct lucrative public sector work to their friends in business and the city, Labour decided to enlarge the fledging PFI scheme.

PFI has many short-term advantages to government, but many disadvantages to wider society:

The public deficit is now £165 billion and the major political parties and most commentators consider this requires huge spending cuts:

Yet this deficit does not include over £200 billion of PFI debt repayment. Thus even where the government(s) speak of “ring fenced” budgets in health and education, this will still mean savage cuts in those areas as massive and mandatory PFI repayments are hidden within that ring-fence.  the media seldom reports this as it does not conform to their propaganda about feather-bedded public servants needing to tighten their belts, and raises awkward questions about private sector provision of public services.

Surprisingly the 1997-2008 labour governments privatised more civil service jobs than the Thatcher and Major governments combined.  In 2004 labour announced 100,000 job cuts in the civil service leading to increased outsourcing to fill in the gaps that had been left in service delivery:

Initially it was delivered through a massive programme of outsourcing government department’s facilities, IT and security functions, through which staff were TUPE transferred to private firms.  Much of this went on under the radar, usually only registering with the media when, for example, a national institution like the British Museum had so few security guards that it had to close important galleries to visitors.

The privatisation of the Ministry of Defence’s Defence Evaluation and Research Agency (DERA) is perhaps the most glaring example of dubious privatisation.  although DERA was performing will, in 2003 the government decided to privatise part of it, and Private-Public partnership called “QinetiQ” was created, after which the 10 senior civil servants responsible for taking the company into the private sector saw their total personal investment of £540,000 transformed into £107 million.  Graham Love, the company’s CEO, saw his £110,000 investment turn into £21 million.  Mark Serwotka, PCS General Secretary, called this “obscene”, but the UK Minister for Defence Procurement described it as “a model for future privatisations“.

The booklet then moves on to privatisation and the media:

The modern idea of objective reporting is little more than a century old.  There was little concern that newspapers were partisan so long as the public was free to choose from a side range of opinions.  Newspapers dependent on advertisers for 75% of their revenues, such as the Guardian and Independent, would not have been regarded as independent by previous generations of radicals, trade unionists and socialists.  Balance was instead provided by a thriving working class-based press.  Early last century, however, the industrialisation of the press, and the associated higher cost of newspaper production, meant that wealthy private industrialist backed by advertisers achieved dominance in the mass media.  Unable to compete on price and outreach, the previously flourishing working class press was brushed to the margins.

Finally the booklet moves onto  Trade Unions and the media:

Trade Unions and the public sector do not enjoy good media coverage.  This makes it much easier to dismiss our arguments against the outsourcing and privatisation of public services.

The media’s subservience to power is demonstrated through the manner in which it selects headline stories, frames the order of discussion, and chooses (or excludes) specific interviewees.  Viewers of Sky, CNN and most other channels receive the latest data fro the Stock Markets with their breakfast – the FTSE 100’s statistics will scroll past on ticker tape keeping viewers up to date on industrial accidents, or the daily devastation of the rain forest.

The media’s response to the 2008 financial crash and the credit crunch is a case in point.  The very people who caused the disaster – bankers, stock brokers and hedge-fund managers – where wheeled into studios to explain it.  Trade Unionist, and those who long predicted that financial deregulation would produce this result, were excluded.  this media consensus made it much easier to forge a political consensus whereby, token noises aside, City bankers are left unmolested to reap huge bonuses from taxpayer funded banks whilst ordinary people relying on public services will suffer for many years to come.

As public services come under increasing attack from spending cuts and increased privatisation it is important to challenge the view that privatisation and cuts are the only way forward and to take every opportunity to promote the alternatives.

• The complete booklet can be viewed here.

REALITY Support functions are just as important as the front-line

In a recent document called “Doing More with Less” the CBI claims that ’sharing back office functions can improve efficiency” and that ‘non-core activities are best provided by the private and third sectors unless it is essential for them to be provided in-house.’

It is wrong to describe any public sector function as non-core or back-office. Public services are characterised by an extremely complex set of processes and relationships. For example, the gradual development of multi-agency approaches, with professionals working together across different public sector bodies create overlapping responsibilities and lines of accountability. Without so-called back office functions, frontline workers would not be able to do their job. The NHS would not be able to survive without the people who book appointments, analyse blood tests, process X-rays or make sure staff get their wages on time.

The pressure on “back-office” functions is greatest in the push to develop shared services. In many cases, shared services can be an effective way of delivering services such as HR, payroll and IT across different local authorities or public sector organisations and delivering long-term efficiency savings. Unfortunately, they are also associated with pressure to cut short-term costs and outsourcing. The Treasury’s Operational Efficiency Programme which advocates the use of shared services is based by its own admission, on “proxies, estimates and assumptions” of private sector standards of delivery. The push for shared services is based on an over-reliance on economies of scale over quality.

Shared Services

“By 2016 the majority of the transactional elements of Corporate Services in the public sector will be delivered through a handful of professional shared service organisations. Some of these organisations will remain inside the public sector, but many will be outsourced. “Cabinet Office, 2006.

Southwest One

Southwest One is a joint venture between IBM, Somerset County Council, Taunton Deane District Council and Avon and Somerset Police to deliver a range of services under a 10-year contract. Southwest One is 75% owned by IBM, who will make £400m over the 10 years.

The joint venture has been strongly criticised for the lack of effective scrutiny, public engagement and secrecy – the contract has been kept secret for reasons of “commercial  confidentiality.”

It offers shared services in IT, finance, human resources, property management, purchasing, facilities management, customer contact centres and services to schools. Southwest One has a framework agreement which enables other local authorities and public bodies to obtain services bypassing the procurement process.

REALITY Only the public sector can respond to society’s collective needs

Public sector reforms are often based on the idea that public service users should be treated as consumers. In many cases, this focus is both appropriate and necessary. For instance, the emphasis in the NHS on developing ‘expert patients’ who will know about and take responsibility for their own conditions and are able to make informed choices is a welcome development, as is the promotion of user empowerment and independence in social care.

However, in many parts of the public sector, users do not engage with services on a voluntary basis but are subject to compulsory attendance, such as with the police or mental health service. And the public’s relationships with public services are often far too complex to be classified as consumers. People do not necessarily buy the service; they may have a right to receive the service; they may be refused a service because their needs may not meet the criteria laid down. But above all, there is often a collective aspect to public services, where the benefit extends beyond the individual, to families, schools, communities, the UK and other countries.

It is this collective aspect of public services which requires them to be subject to democratic accountability and transparency. Privatisation erodes this accountability and treats vital services merely as contracts to be bundled up and sold off.

Barnet Council

Barnet Council is using the business model of budget airlines to plan a radical reform of public service provision. Unofficially dubbed “easyCouncil” the project is part of the borough’s “relentless drive for efficiency” and could see residents paying extra for some local services.

The council’s aim is to turn itself into a focal point called a strategic commissioning hub to commission public services from private and voluntary sector organisations. Barnet also plans to stop providing some services altogether – ’scaling down to a size which would mean delivering only what the local authority must deliver to achieve efficiencies’ – and to outsource the rest.

The council had also planned to save £950,000 by removing on-site residential wardens (whose tasks include dealing with health and security emergencies, organising GP visits, organising social activities, and checking on residents at least once a day) from sheltered housing scheme. They would be replaced with a ‘floating’ support service where support workers based at hubs would visit elderly people who met eligibility criteria. In December 2009, a High Court ruling prevented the plans on the grounds that they did show due regard to the need to take account of disabled persons’ disabilities.

Academy Schools

The growth of academy schools represents a transfer of assets and power to unaccountable entrepreneurs, business and religious groups. Parent power is generally weaker in academies than in maintained schools -including reduced representation on governing bodies, weaker appeals processes for admissions, exclusions and special educational needs, and reduced capacity to withdraw pupils from acts of religious worship. Under current rules, academies must appoint only one parent or guardian on governing bodies, even though parents and guardians usually form the largest group of governors at state schools.

There has also been a steady growth in the number of chains and federations of academies, meaning that a single unaccountable organisation or individual is responsible for a vast array of educational provision including the development of the curriculum, admissions and staff terms and conditions.

There are also wider accountability issues related to academy schools. Accountability in public services does not end with accountability to users, as schools play a social and economic role that goes beyond the interests of parents and guardian. Taking academies out of Local Authority control disrupts admissions arrangements within local authorities and in neighbouring authorities.

At the start of the Academy Schools project, sponsors were required to provide a one-off payment of £2million. Many sponsors, however, did not pay or chose to pay ‘in kind’. This requirement has now been dropped.

REALITY Public Services are too important to compete on price

The imposition of competition and markets in the public sector means driving a wedge between client and contractor roles and usually results in the restriction of in-house delivery. Local authorities, NHS Trusts and other public sector bodies are required to become ‘commissioning’ organisations, in effect to be a client and to contract the provision of services to outside organisations. Competition is therefore limited between private firms and consultants and cannot be said to be true competition.

Competition can be a powerful lever of economic innovation. But the public sector is not, nor should be subject to real competition. The allocation of resources in the public sector should never solely be about price – public services are too important. Public services reduce inequality, promote stability, and are the only proven way to promote economic, social, and environmental security.

As long as a service remains in the public sector it retains at least the potential to be directed by meeting the needs of the public. Once the private sector takes over this potential disappears, and is replaced by the priority of profit maximisation. Public services are subject to a regime of democratic accountability that embodies political choice and as such provides a different kind of scrutiny than anything that the market might deliver. Public services are an essential component of a good society. They carry with them intrinsic assumptions about equity, access and accountability; this is not the case in the market.

Privatisation and outsourcing often leads to services being fragmented, with overly complex structures which make collaboration and cooperation difficult. This slide to fragmentation means that Ministers and public sector managers lose control over the quality and delivery of services. They also lose control over the pay and conditions of workers delivering services. The 0PM study on outsourcing in the NHS found that it represents a “challenge to the lines of accountability due to the increasing complexity of outsourcing arrangements and diversity of approaches.”

The growth of competition also leads to increased transaction costs, linked to making and monitoring contracts, accounting, auditing, legal services, advertising and shareholders’ profits. Public sector resources are used in wide range of activities, from ’stimulating the market’ to encourage private and voluntary sector organisations bid for contracts, to tendering and performance management. There are also high costs associated with bidding for contracts, which can act as a barrier to market entry and creates economies of scale that favour large providers both in the private and voluntary sectors.

Competition all too often leads to a race to the bottom, with providers in all sectors racing to compete on costs. This inevitably hits the workforce in terms of pay and conditions, training and staffing levels. A study by TUPE by the Social Care Employers’ Consortium looked at the recruitment and retention of the third sector social care workforce and particularly contracting out from the public to the third sector.

It reported that, despite clear guidance that TUPE should apply to all transfers in an outsourcing situation, many local authorities still ask for a TUPE and non-TUPE price in their tenders. It states that ‘tenders, especially those which have a turnaround time of a few days, are costly to prepare and having to provide two separate bids doubles the cost of staff time.’ It goes on to describe the code of practice on the two-tier workforce, which was designed to ensure that in a transfer situation, new employees were treated equally to those of transferring staff. It states that the code is ‘often ignored by local authorities which are cost driven.’ It quotes one employer: ” We lost a contract because a local authority and a new supplier ignored the two-tier workforce regulations. Now we don t mention it unless the local authority does, which isn ‘t often. “⁷

Britain’s Homecare Scandal — BBC Panorama

“Care of the elderly is a lucrative industry after the doors were opened to private companies in the 1990s. Research from the London School of Economics, commissioned by Panorama, found that 70% of home care is provided by the independent sector today and is worth £1.5 billion. The figure was just 2% in 1992. English local authorities spend around £22 an hour providing elderly care, but the independent sector provides it for around half that.

Panorama went to South Lanarkshire in Scotland where an online auction decided the council’s new care provider. Domiciliary Care won the auction which saw bidders bidding down, not up. It’s one of Scotland’s largest care providers looking after more than 1,500 people. While it won with a bid to provide care for £9.95 an hour, South Lanarkshire says the decision to award the contract was based only 40% on price with 60% based on quality of care.”

www. news.bbc.co.uk/ panorama/hi/front_page/newsid_7990000/7990682.stm

Impact on the third sector
Supporting People Programme – evidence to the Communities and Local Government Committee

Supporting People is a government programme to fund, monitor and improve housing-related support services. The inquiry into the programme expressed concern about pressure placed on third sector organisations as local authorities focus too heavily on the cost of providing services, as opposed to considerations of quality. Evidence was provided by several charities and third sector organisations, including Refuge, a domestic violence charity, who compared “the search for the cheapest possible contract” to the approach a local authority would take to letting “a contract for pot holes or some other local authority service.” The subsequent impact of competitive tendering on small, often third sector, providers and their clients is considerable:

“[Competitive tendering impacts on] small, community-based care providers. Large organisations are much more able to compete for and win Supporting People services—by contracting out their own back-office functions, developing floating support services over large geographical areas, and benefiting from economies of scale. [...] the government’s own equalities agenda is being harmed. While the focus from government seems to be on the needs of local communities, the result of low-cost competition for care services is that specialist equalities groups rooted in communities will struggle. The Supporting People Programme – Communities and Local Government Committee, 2009

_____________________________

⁷ Social Care Employers’ Consortium, Social Care: Has Anything Changed?, 2008

REALITY There is no evidence to show that the private sector is more efficient than the public sector

In the pursuit to do ‘more for less’ the argument is often heard that the private sector can run services better than the public sector because it is more efficient and has better skilled managers.

It is also claimed that the profit motive is the greatest guarantee of efficiency. Yet, the fact that the private sector, unlike the public, must pay a dividend to its shareholders means that funds are always diverted into profits. And the private sector has certainly shown it can make a decent profit from the public purse.

The public service industry is a highly profitable market for the private sector with an annual turnover of nearly £80bn. Large companies such as Compass, Serco and Capita have made huge profits from the privatisation of public services and dominate the market. Local authorities account for a fifth of Capita’s business, which describes itself as “the UK’s leading outsourcing company”. Support services firm Serco, which runs prisons, railways, school inspections and London’s congestion charge recorded a 33% increase in pre-tax profit in the first half of 2009 to £83.4m.

The report by insurers Zurich into outsourcing indeed warns against the risk of the outsourcing market consolidating and becoming dominated by a few large providers. It says: ‘Big is not always beautiful and can bring risks in itself … Co-operation between authorities can in effect force a monolithic market place of suppliers that may give short-term gains but close down future opportunities to spread risk.’³

The box below highlights the particular case of the Private Finance Initiative (PFI). PFI contracts are notoriously inflexible, limiting the ability of public sector bodies to strategically plan for the future as they are contractually bound to pay for a building and a pattern of service provision which could later prove inappropriate and unfit for purpose. The box below also explores one of the main arguments used to promote the PFI, that risk is supposedly transferred from the public to the private sector. Experience shows that governments remain accountable to deliver services regardless of how well the PFI project or company fares.

Private Finance Initiative

The total capital value of PFI and PPP schemes to date completed or signed is more than £lOObn. The largest sector commitments are for transport schemes and hospitals and other health projects. As contractors typically operate on a 10% to 20% margin, this represents at least £10bn in profits alone for the construction companies. In addition professional fees – for legal services and accountancy/consultancy advice – generate substantial earnings for the firms.

Neath Port Talbot Hospital in Wales demonstrates the typical repayment set up of PFI deals, where loan repayment over 30 years (including maintenance) will exceed £445m compared with building costs totalling only £66m. Since such earlier experiences with PFI, the Welsh Assembly Government has taken a much more cautious approach to PFI than the UK Government and the initiative has been dropped in the NHS. In addition, 250 members of staff who provided cleaning and catering to the Neath Port Talbot PFI hospital were returned to NHS employment in 2009.

The Major Contractors Group (representing the biggest construction firms in the UK) estimated that at the height of the economic boom, PFI contractors were getting between three and 10 times the normal rate of construction industry profits. However, during the financial crisis, the risk was transferred back from PFI contractors to the taxpayer, with the government promising to bail them out with billions of taxpayers’ funds. In March 2009, a new Infrastructure Finance Unit was set up within the Treasury to ensure that PFI projects continued after the credit crunch and to lend directly to PFI projects instead of PFI consortium borrowing from banks. The infrastructure finance unit is expected to lend about £lbn-£2bn to PFI schemes in 2009-10, meaning that taxpayers’ money is being used by the government to subsidise the operation of many of the UK’s largest PFI schemes.

Stephen Glaister, professor of transport and infrastructure at Imperial College London commented that: “The financial crisis has highlighted a basic truth – that private finance is only a way to borrow money that will have to be repaid by the taxpayer sooner or later. Risk transfer has proved difficult or impossible, so the taxpayer has ended up bailing out the commercial failures of the PFI companies.”⁴

There is scant evidence of the private sector’s ability to provide more efficient services. Even the outsourcing industry acknowledges that the efficiency argument is an elusive one. Martyn Hart, chairman of the National Outsourcing Association recently expressed scepticism about the extent of the savings which could be made from outsourcing services, like cleaning.

He stated that: “If you’re cleaning a hospital, and if you’re doing it to the same standard and paying staff the same thing, then where are your economies of scale?…If you’re just outsourcing for cost savings there has to be somewhere where the cost savings can come.” He went on to suggest that small savings might be possible from bulk procurement of cleaning products, but said that there was a danger that companies would secure their profit margins by paying staff less.⁵ Since public services are highly labour intensive, this is the area that is usually squeezed to find savings, often leading to a downgrading of pay levels, holiday entitlements, sick pay, maternity pay, and training and development.

A study by the Office of Public Management (0PM) on outsourcing in the NHS found that “little hard evidence is available to suggest that outsourcing impacts positively on value for money or quality of care. Conversely there are several examples of outsourcing having a directly negative effect on the value for money and quality of care in services.”

The report from Zurich into outsourcing and PPPs found that outsourcing is often ‘the cause of a downward pressure on terms and conditions, fragmentation of services and a divisive effect on the ethos of the public sector and the NHS.’ But warns that ‘a very wide range indeed of disasters and embarrassments caused by supplier failure’ suggest that the risks of the push to outsourcing are ‘potentially catastrophic and urgent’.

The problems they highlight include:

• Countless and huge examples of the loss of sensitive personal data and privacy responsibilities eg
  the £225 million Contact Point, child protection database issues;
• Badly managed social care contracts leading to reputational damage and legal challenges;
• The National Audit Office is investigating alleged overspending and overrun of IT contracts worth £18 billion; and
• The failure or collapse of a number of shared service agreements

PRISONS

Private prisons are performing worse than publicly run prisons. Data obtained under the Freedom of Information Act by More4 News show that four of the 10 private prisons scored the second lowest rating of 2, “requiring development”, and only one above an assessment of “serious concern”.

There are also disparities in the number of complaints upheld in private and state-run prisons. Rye Hill Prison, a private prison run by G4 saw a total of 22 complaints, well above the average in both prison sectors.

The evidence contradicts the government’s claim that the greater use of private prisons has driven up standards. Despite this Serco has been awarded a £600m contract to operate two new prisons at Belmarsh West in London and Maghull in Liverpool.

There is Another Way

In September 2009, the Secretary of State for Health announced that ‘the NHS is the preferred provider’ in the provision of its existing services where it can show it can do so at high quality and value. If NHS services are railing and are not improved then commissioners can open up tenders to alternative NHS, private or voluntary providers. The Secretary of State acknowledged that it is usually more efficient to fix the current service than go out to buy a new one and that it is fairer all round for staff to be given a chance to improve.

A study undertaken by the Association of Public Service Excellence (APSE), highlighted small but growing signs of antipathy towards outsourcing. Looking at 50 councils, APSE found that the main reasons for returning services in-house was the poor performance of contractors. In many cases contracts had been terminated early, with cost implications for the council but more significantly, with little progress made towards greater efficiency. It appears that decisions to end these contracts appear to be driven by entirely pragmatic reasons – essentially providers have failed to live up to expectations.⁶

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³ Zurich Municipal, Public sector supply chain: risks, myths and opportunities, 2009
⁴ The Guardian, A bridge too far for PFI schemes, 18 April 2009
⁵ FM-World, Outsourcing FM could save government billions, 19 October 2009
⁶ APSE, Insourcing: A guide to bringing local authority services back in-house, 2009

Index – Media myths about civil and public services.

MYTH  1  During the economic downturn, the best way to save money is to privatise public services

REALITY During the downturn, public money is best kept within the public sector

As the public sector faces pressure to squeeze spending, politicians, commentators and contractors have called for more public services to be transferred to the private and voluntary sectors in the belief that this would save money.

As recent global economic developments have severely questioned the credibility of free-market economics, it is surely time to reconsider the view that the private sector has all the answers. The push to transfer services and assets to the private sector is rarely done as a result of evidence-based policy, but driven more by political will. Indeed, a report by private insurers Zurich says that ‘government policy has moved from encouraging partnerships towards mandating them”. A more worrying development is the increasing influence the private sector has on decisions affecting public services. A spokesman from investment managers, Brewin Dolphin recently stated that outsourcing is now such a part of the political culture that there is little chance of the process being reversed. “Consultants and outsourcers are so entrenched in the system that they’re actually the ones sitting there and making the decisions for the government.”¹

It is also time to give full consideration to the role that public spending plays in local economies. A recent TUC Touchstone pamphlet highlighted research which shows that for every pound of public spending in a local area, this generates an additional 64p.² Outsourcing and PPPs – often undertaken with large multinational companies – takes money out of areas at a time when local economies and communities most need to be supported. Public spending has a stabilising effect, particularly during a recession; privatisation and outsourcing would only undermine this.

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1 Moneyweek, Profit from the fiscal crisis with outsourcing, 4 September 2009
2 TUC, Speaking up for Public Services, 2009

Index – Media myths about civil and public services.