Privatisation: ” a shadow state apparatus run solely for profit”

“Oh, how we laughed. Failing Grayling, the transport secretary, Chris Grayling, the Mr Bean of contemporary politics, had awarded a cross-Channel ferry contract to Seaborne, a company that had no ferries and had never run a ferry service. Six weeks later, the contract was torn up.

The trouble is, the laugh’s on us too. For it’s not just Grayling who’s failing. The Seaborne style of awarding contracts – never mind the competence, just get the signature – has long been the public sector norm for outsourced work. The result has been scandalous services and collapsing companies.

Consider Interserve. It’s another of those corporations, like Capita, Carillion and Serco, with bland names, barely visible to the public, but which have become a kind of shadow state, providing much of Britain’s essential public services.The outsourcing of public services began as a Thatcherite policy in the late 1980s, became turbocharged under New Labour and was pushed further still by the coalition government after 2010. An Institute for Government report last year calculated that a third of government expenditure – £284bn – was disbursed to external suppliers handling everything from parking permits to immigration control to the maintenance of nuclear warheads.

But why should the same company be deemed capable of motorway construction and probation management, of sewer repairs and hospital catering? And why is this not as scandalous as a company with no ferries being awarded a ferry contract?

Interserve is not unique. Take Serco, which began life as the British arm of the US entertainment firm RCA. By the late 1980s it had changed its name and aggressively moved to take advantage of the market in government outsourcing. Within 25 years, it was running everything from out-of-hours GP services to asylum detention centres.

It’s not uncommon for companies to change strategy or seek new markets, but this usually involves having some expertise in the subject. When it comes to public service contracts, however, expertise appears to mean primarily the ability to win contracts. Serco’s “panache in the bidding process”, one report observed, allowed it to “beat out competition from specialist firms”.

Inevitably, this has led to a constant stream of debacles. From charging for the tagging of nonexistent criminals to accusations of neglect and sexual assault at Yarl’s Wood migrant detention centre, from allegations of data falsification in an out-of-hours GP service to disastrous work capability assessments, the one thing that outsourcing companies have never been able to outsource is the stench of scandal.

A decade ago, such companies were boasting about reaping the rewards of the financial crash. Paul Pindar, CEO of Capita, told the Financial Times that he’d be “deeply disappointed” if the company did not double revenues from government contracts within five years. In fact, within a decade, Capita was knee-deep in debt and issuing profit warnings. Serco’s profits had already plummeted. Carillion collapsed. And now Interserve is in administration.

Government cuts may have opened up new markets, but they also squeezed profit margins. Combined with greed and overstretch and never-ending scandals, outsourcing companies have been forced into a “bankrupt” business model of chasing new public sector contracts to make up for the razor-thin margins in the old ones.

Shareholders have seen assets disappear and creditors have lost money. But the real losers are NHS patients, benefits claimants, asylum detainees – and the tens of thousands of workers employed by such companies, often in gig-economy conditions.

It’s time we recognised that the policy of giving construction or facilities management companies power over health provision, welfare assessment or prisoners is as rational as awarding a ferry contract to a company that’s never ferried a bugger in its life.”

https://www.theguardian.com/commentisfree/2019/mar/17/we-scoffed-at-chris-grayling-ferries-but-his-way-is-now-a-public-service-norm

“Local bodies poor at securing value for money, says Public Accounts Committee “

“An increasing number of local public bodies are demonstrating “significant weaknesses” in securing value for money, MPs have warned.

Auditors found more than 20% of local authorities, NHS bodies and police and fire authorities in England did not have proper arrangements in place to achieve value for money in 2017-18, the Public Accounts Committee has said.

Central government’s measures to stop this were “limited”, the watchdog added.

NHS bodies, like Clinical Commissioning Groups and hospital trusts, were found to be the worst public bodies for assuring taxpayers’ money is spent effectively, according to the PAC report out today.

Qualified audit opinions – which signify weaknesses in an organisations accounts – were issued to 38% of NHS bodies in the last financial year, compared to 29% in 2015-16, it said.

In 2015-16 18% of non-NHS local bodies were given a qualified audit opinion, compared to 22% in 2017-18.

There were 495 local authorities, local police and local fire bodies subject to external audit, with responsibility for £54bn of net revenue spending in 2017-18. Another 442 local NHS bodies received funding from the Department of Health and Social Care of approximately £100bn.

Only 5% of local bodies had implemented changes to address weaknesses highlighted by auditors last year, according to information obtained by the National Audit Office.

The PAC noted that some bodies were failing to put enough information in the public domain, including reports from external auditors and suggested that central government should “make clear their expectations” for information that should be made public helping citizens hold bodies to account.

“Local bodies should also be taking auditors’ concerns seriously and addressing them promptly, but there appear to be few consequences for those who do not,” the report said.

The committee said that central departments were not doing enough to make sure that local bodies take “prompt corrective action”.

Meg Hillier, chair of the PAC, said: “Taxpayers must be assured that their money is well-spent but in too many cases local bodies cannot properly safeguard value.

“Particularly concerning are NHS bodies such as CCGs and hospital trusts: last year almost two in five did not have adequate arrangements.

“It is vital that local bodies take auditors’ concerns seriously, address them swiftly and ensure meaningful information on performance is made accessible to the public.”

DHSC and the Ministry of Housing, Communities and Local Government have been contacted for comment.”

https://www.publicfinance.co.uk/news/2019/03/local-bodies-poor-securing-value-money-says-pac

Retiring National Audit Office Chief: ministers with no qualifications and “inappropriate bravado when it comes to spending taxpayers’ money”

“The relationship between ministers, accounting officers and civil servants is currently not working, the outgoing auditor general of UK’s spending watchdog has said in his last speech in the role.

Some ministers “see themselves more or less as chief executive officers but without the qualifications”, National Audit Office head Amyas Morse told an event on accountability at the Institute for Government think-tank’s offices this morning.

The comptroller said this meant ministers sometimes made decisions prioritising a project “close to their hearts” – when they should be held accountable but are not – which “has led to the abandonment of good practice”, he said.

The problem rests with the “interaction between ministers, accounting officers and civil servants,” Morse said. “That really needs to be addressed. I don’t think the relationship is where it ought to be at the moment.”

He said he did not see ministers having a say in the appointment of accounting officers as producing a “healthy result”.

Accounting officers can only ensure value for money for the public purse “if they are in a position where they are sufficiently influential to assert the importance of public value”, he added, suggesting they currently do not have this influence.

Morse said the civil service had become much more professional over the past few years, partly through initiatives like the Infrastructure and Projects Authority. The authority is a centre of expertise for delivering infrastructure and major projects.

But he added civil servants, who he noted often feel they need to defend ministerial decisions, required “greater clarity” on how they were was supposed to work alongside those decisions.

Morse talked of the importance of transparency in public life and the “outbreak of secrecy” in government over Brexit.

This secrecy had “slowed down the ability of the civil service to react and may have helped create an element of distrust more widely in parliament,” Morse said.

He suggested there was currently “inappropriate bravado when it comes to spending taxpayers’ money”. He highlighted Crossrail and the probation service’s contracting as examples of where government had recently overspent. “I didn’t have to go far into my in-tray to find those,” he said.

Morse will hand over the reins as auditor general and comptroller to CIPFA fellow Gareth Davies on 1 June.”

https://www.publicfinance.co.uk/news/2019/03/outgoing-nao-chief-questions-ministerial-accountability-over-public-spending1

EDDC pouring £3m into new airport road

“The £3m scheme will provide sufficient access in order to develop the Airpark and will be forward funded by East Devon District Council.

The road that runs past Exeter Airport and down to Hampton by Hilton hotel is set to be widened – and will enable a new 17 acre business park to be built.

The Airpark – to be built next to the Flybe Hangar – is one of the four planned ‘Enterprise Zones’ – but the substandard nature of Long Lane and the limitations to current highway network are a direct barrier to it coming forward.

An enhancement scheme, which will see the widening of Long Lane from the Airport Terminal entrance, past the hangers and the FlyBe Academy/Hampton by Hilton hotel through to Harrier Court in the east.

While Long Lane is being widened, a new road to connect Silverdown Office Park to the FlyBe Academy access road, known as the “Silverdown Link”, will be built, and when the Long Lane works are finished, the Silverdown Link will become a permanent bus only link.

The cabinet on Wednesday night unanimously recommend to full council to borrow up to £3m against ring fenced business rate income to implement the scheme and enter in to a funding agreement with Devon County Council to deliver it. …”

https://www.devonlive.com/news/huge-plans-exeter-airport-road-2620576

“Sticking plaster won’t save our services now”

“Britain’s fabric is fraying. It’s not just the occasional crisis: schools that can’t afford a five-day week, prisons getting emergency funding because officer cuts have left jails unsafe, a privatised probation service that isn’t supervising ex-criminals. The services we take for granted have been pared so deeply that many are unravelling. The danger signals are flashing everywhere.

Local authorities have lost three quarters of their central government funding since 2010. They are cutting and selling off wherever possible: parks, libraries, youth services. The mainly Tory-run councils in the County Councils Network warned last year that their members were facing a “black hole” and were heading for “truly unpalatable” cuts to key services, including children’s centres, road repairs, elderly care, and rubbish collection.

The chief executive of the Local Government Information Unit, a think tank, says councils are already on life support. Yet they face their biggest fall in funding next year. Volunteers are already running some libraries and parks. Councils will have to cut further; Theresa May’s new stronger towns fund is far too small to make a difference.

The criminal justice system has been stretched beyond reliability. The number of recorded crimes being prosecuted is falling and runs at just 8.2 per cent, as funding cuts bite, evidence isn’t scrutinised, courts close and neither defence nor prosecution teams have adequate resources or time. The chairman of the Law Society’s criminal law committee says “we are facing a crisis within our justice system, we are starting to see it crumble around us”.

In health, waiting times at A&E have hit their worst level in 15 years; in some surgeries the wait for a GP appointment can be weeks; and this week public satisfaction with the NHS fell to its lowest for more than a decade, at 53 per cent, down from 70 per cent in 2010. Britain’s spending watchdog, Sir Amyas Morse, departed from his usual role as a tenacious critic of government waste to warn us, bluntly, that May’s recent boost for the NHS is nothing like enough. An ageing population will need higher spending. The falling budgets for social care are “unsustainable”.

The news in education this week was that 15 Birmingham primary schools will close at lunchtime on Fridays because they can’t afford to stay open. It’s the most vivid recent example of the slashing of budgets per pupil by almost 10 per cent, in real terms, since 2010. Sixth forms have lost a quarter of their funding. Schools have reduced teaching hours, cut A-level courses in maths, science, languages, sacked librarians, school nurses, mental health and support staff, and cut back on music, art, drama and sport.

When this process began in 2010 I backed it. Like many people, I had come across enough unhelpful, incompetent jobsworths to know the state was wasting money. As a Labour supporter I’d written at the end of the Brown years warning that Labour was destroying its case for high public spending by squandering much of it.

Privately, many in the system agreed. One chief executive of a Labour council told me he’d been relieved to get rid of half his staff in the first couple of years; it had cleared out the pointless and lazy, and forced everyone to focus on what mattered and what worked. Other chief executives agreed cheerfully that they too had been “p***ing money up against the wall”.

But we are years past that point. We have moved beyond cutting fat, or transformation through efficiencies. Instead we are shrivelling the web of hopes, expectations and responsibilities that connect us all, making lives meaner and more limited, leaving streets dirtier, public spaces outside the prosperous southeast visibly neglected.

So many cuts are to the fabric that knitted people together or gave them purpose. The disappearance of day centres for the disabled, lunch clubs for the elderly or sport and social clubs for the young is easy to shrug off for the unaffected. But the consequences are often brutal for those who lose them, isolating people and leaving them with the cold message that unless you can pay, nobody cares. The hope that volunteers and charities could fill all the state’s gaps has evaporated. They haven’t and they don’t. Is this how we want Britain to be, and if not, where does this end?

Austerity was never meant to be lengthy, just a few tough years to drive reform. It was intended to be over by 2017, when a thriving economy would float us off the rocks, but events did not go to George Osborne’s plan. The economy is not about to rescue us now, either. All forms of Brexit are going to slow our growth.

Which leaves us with three choices. We could accept the decay of services, and decide to live in a crueller, more divided, more fearful country. If we didn’t want that, we could back a party that planned higher taxes to fund them — Britain’s tax burden is currently 34 per cent, three quarters of the French, Belgian and Danish rates.

Alternatively, Philip Hammond could seize the chance to start reversing this policy in his spring statement next week. In America many Republicans and Democrats, for different reasons, have begun to treat deficits with insouciance, after years of obsessing over them. What matters is whether governments can afford the interest on the debt. Rates are low. Britain desperately needs investment in its people and their futures. The cautious Hammond should open the financial taps.”

Source: The Times (pay wall)

“Our Council Funding Crisis Will Not Be Solved By A Small Pot To Fix Short-Term Problems”

When people voted to leave the European Union in 2016 it expressed a clear demand for change. Many felt that the places where they lived had been locked out and left behind by prosperity while they could not see opportunities for them and their families to achieve a better life.

On Monday, the government announced a new £1.6billion Stronger Towns Fund to be spread over seven years – but the lukewarm response has reflected the urgency for much more serious and sustained investment in all the communities that need it. There needs to be investment that people can see and feel, and prosperity that they feel they are a part of.

The announcement reflects the needs of many of our towns, but we need to see far greater ambition in terms of boosting job prospects and living standards throughout the UK. We need a series of significant investments as part of a long-term plan to transform prospects and help the four million people in working poverty in the UK.

The Government’s commitment to deliver on its Shared Prosperity Fund – a manifesto pledge to replace the EU structural funds for economically disadvantaged places – has far more potential. Fully implemented, it could make a much more significant difference to people in places that have been locked out of prosperity. EU Structural Funds are currently worth £2.4billion a year in EU and national match funding.

But we’ve been waiting over a year for the consultation to be published on what the Shared Prosperity Fund should look like, let alone seen any progress on delivering for the places that need it. It’s not just towns that are struggling, rural areas are too and some of the lowest employment and pay is found in cities such as Nottingham, Leicester, Manchester, Liverpool and Birmingham.

“I’ve done labouring and warehouse work, manual labour most of my life … work with bricklayers, joiners, different trades. Warehouses, packing … I’d prefer to … have a decent wage. I’ve never had secure employment. The longest I’ve worked is about three months max. There have been big stretches of unemployment, like years – two years.”

At JRF we root our work in the experiences of people in poverty, and as this man describes too often work provides an income but fails to deliver the security that enables people to build a better life. In parts of the UK this is sometimes all that is effectively on offer. While the country overall has a great story to tell on employment some people are locked out of this success because of where they live, with some places reporting employment rates over ten percentage points behind the average.

The Government has emphasised that both the Stronger Towns Fund and SPF will focus on closing productivity gaps – but this must be done in a way that delivers inclusive growth. That means growing the economy and creating jobs for those locked out of the labour market, making sure people have skills to get on at work, and improving firm performance in low pay sectors like hospitality and retail.

HuffPost’s joint investigation with The Bureau of Investigative Journalism into local authority selloffs, especially those being used to fund redundancies and cuts, demonstrates how these economic challenges can be compounded, leaving places with a sense of decline. Where towns, cities and rural areas lose jobs, services and their sense of purpose, people can be swept into poverty of every kind.

Living without secure employment means living without the ability to save or plan – one of the burning injustices which the Prime Minister pledged to tackle on taking office. It is absolutely right that we look at how to help communities around the country – whether it is Wigan, Bassetlaw or Doncaster. But the way forward must solve deeper problems than the parliamentary conundrum which currently faces the Prime Minister.

It is essential that the pledged funding via the Shared Prosperity Fund is based on need, as the communities secretary James Brokenshire pledged the new Stronger Towns Fund would be. Funding needs to recognise the real experience of economic challenges facing towns and cities across the UK, as highlighted in the HuffPost investigation.

People around the UK need to know how this wrong is going to be righted through the Brexit process and beyond. Implementing the Shared Prosperity Fund needs to be the priority for beginning to shape a new deal.

If the Government is serious about transforming towns, and anywhere else people are not enjoying the opportunities or living standards prosperity brings, it needs to bring serious money to the table. A small pot to fix short-term problems is not ambitious enough and may fail to solve the conundrums of either local prosperity or parliamentary arithmetic.

Campbell Robb is the chief executive of the Joseph Rowntree Foundation

https://www.huffingtonpost.co.uk/entry/local-government-cuts_uk_5c7ea408e4b0e62f69e6da2d

” ‘Totally unfair’ and ‘no way to run public services’: Two councils slam government as £40m total cuts approved”

Owl says: but Conservative policy is to shrink or eliminate the “state” (i.e. public services) and use private companies to make profits out of services, so actually it IS their way of doing things and IS extremely successful!

“Two councils have approved over £20m worth of cuts as both authorities slam an “ever-increasing tough financial climate” due to austerity and a “totally unfair” year of drastic government cuts.

Doncaster Council and Nottingham City Council yesterday both approved budget proposals to make £21m and £23m of savings respectively, with substantial council tax hikes and job losses amongst the plans.

Nottingham council said its central government funding had fallen from £127m in 2013 to just £25m for next year, leading to difficult decisions such as the initial reduction of 27 jobs “with more likely.”

Other cuts at the authority include reducing Link Bus services, a range of changes to adult social care, reducing contributions to its youth centre, and a 2.99% council tax rise.

The council said independent analysis shows that places like Nottingham with higher deprivation have been hit harder by government funding cuts compared to areas such as Surrey, leaving the authority “with no other option” to enforce cuts and raise council tax.

Nottingham City Council leader Jon Collins went further, stating that the tenth budget in a row with funding cuts was made worse by the “totally unfair blatant favouring by government of Conservative-led councils in affluent southern areas.”

“It means setting this budget has been extremely difficult and we don’t take any pleasure in making decisions which detrimentally affect local service users.”

Doncaster Council has had to use some of its one-off reserves to meet its budget gap for 2019-20 and still forecasts a further deficit of £13m for the following year.

It has proposed a 5% council tax increase using the social care ‘precept’ to generate over £5m towards plugging the budget gap, but stresses that £323m will be given to capital funding for projects to stimulate growth over the next four years.

Mayor Ros Jones also slammed the government over a lack of certainty around local government funding.

He stated: “The government continues to cut our funding with no plans for the future.

“Doncaster has been hard hit and it is beyond belief that there is no firm plan for the sustainability of local government finances post 2020.

“It’s all well and good having individual funding streams and one-off pots of money that we can bid for but it’s no way to run public services.”

http://www.publicsectorexecutive.com/Public-Sector-News/totally-unfair-and-no-way-to-run-public-services-two-councils-slam-government-as-40m-total-cuts-approved-