Stagecoach rail franchise in pensions row

Owl says: Stagecoach has a near monopoly on bus routes in the Exeter commuter and rural hinterland – hoping the bus franchise is healthier.

But just another privatisation cash grab.

“Stagecoach says it is “extremely concerned” after the Department for Transport (DfT) barred it from three UK rail franchise bids.

The DfT says the bids for the East Midlands, South Eastern and West Coast franchises were “non-compliant” because they did not meet pensions rules.
Martin Griffiths, chief executive of Scotland-based Stagecoach, has called for an “urgent meeting” with the DfT.

Stagecoach had “repeatedly ignored established rules”, the DfT said.
Mr Griffiths said in a statement: “We are extremely concerned at both the DfT’s decision and its timing. The department has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns.”

Bidders for the franchises have been asked to bear full long-term funding risk on relevant sections of the Railways Pension Scheme, Stagecoach said. The Pensions Regulator has estimated the UK rail industry needs an additional £5-6bn to plug the pensions shortfall, and the company said it was being asked to take on risks it “cannot control and manage”. …”

https://www.bbc.co.uk/news/business-47877858

Gigaclear rural broadband project – paused probably for many months

From the blog of DCC Independent Councillor Claire Wright:

“There has been a delay now for sometime in Devon on the implementation of fibre to the home broadband. This means individual connections from the fibre cables in the road to each house.

A huge operation that was started by BT and in the past two years or so, operated by Gigaclear under the management of Connecting Devon and Somerset (Devon and Somerset County Councils).

Unfortunately, the timetable has slipped last autumn, partly due to the collapse of Carillion (Gigaclear were partners with a Carillion subsidiary engineering company) and partly due to the enormity of the Devon operation and road layouts.

One of the problems has been traditional Devon banks which have apparently been a challenge as the company usually digs up grass verges to install cables. Devon banks are also (quite rightly) protected under planning policy.

Connecting Devon and Somerset have had to apply for a funding extension from the government to allow for the extension of this work. This has been agreed in principle but won’t be endorsed nor the money received until the next comprehensive spending review later this year.

So without the firm confirmation contract extension funding and other logistical issues, there is still a delay of an unknown number of months.

This is deeply disappointing indeed and incredibly frustrating for communities such as Aylesbeare which doesn’t even have superfast broadband so residents are putting up with speeds of less than one megabit. I’m also aware that there are people living on the edges of communities who also have poor broadband service.

For residents and communities frustrated at the lack of connectivity there are other options, such as a voucher scheme to offset the cost of roof aerials for individual properties. For a bigger scheme involving whole communities, telecommunications companies can quote for a village service.

There are no easy solutions at the moment unfortunately and this is deeply frustrating for me and for many people in my ward.

Please email me if you have any questions at claire@claire-wright.org

I will update you when I know more.”

http://www.claire-wright.org/index.php/post/fibre_to_home_broadband_delayed_for_an_unknown_number_of_months

“G4S stripped of contract to run HMP Birmingham as government takes violent jail back under public control”

“A privatised prison marred by riots, drugs, suicides, violence and “appalling” conditions has been taken back under permanent government control.

The Ministry of Justice cancelled G4S’s contract to run HMP Birmingham, months after seizing temporary charge of the jail following an “urgent notification”.

Officials denied the unprecedented move was a “public versus private sector issue”, but critics claimed years of warnings over outsourcing prisons had been vindicated. …”

https://www.independent.co.uk/news/uk/home-news/hmp-birmingham-g4s-contract-government-public-control-a8849751.html

“Theresa May’s ‘NHS Long Term Plan’ spells more cuts and privatisation”

“… In January the government unveiled its much-awaited Long Term Plan for the NHS. It caused quite a stir. In the runup to the NHS’ 70th birthday, the Prime Minister committed to a real term annual 3.4% increase in funding for frontline care between 2019/20 to 2023. The “plan” reaffirmed this commitment. However, the problem with this commitment is that it simply doesn’t meet the needs of the NHS.

For a start, all independent experts including the Institute for Fiscal Studies, Health Foundation, Kings Fund and the Nuffield Trust have stated that this amount will only allow the NHS to continue providing the same level of care it is currently providing. In short services, won’t and can’t improve with this level funding.

In fact, it is more likely that performance will deteriorate once we take into account the context of an ageing population with long-term, complex and chronic conditions. All of the aforementioned commentators agree that a 4% increase is the bare minimum required to even begin improving services.

What’s more, none of this funding will be going towards public health initiatives. Historically, local authorities have funded services providing sexual health services, alcohol services, drug services and other public health services through the Public Health Grant.

A grant from central government to local government. But this grant has been butchered by the Conservatives. Between 2014/15 and 2019/20 it has suffered a real term cut of £700m. That amounts to nearly a fall of 25% per person across the entire country. As a result, improvements in life expectancy are now stalling – according to the Health Foundation think tank – for the first time in 100 years.

Similarly, the funding won’t be going towards capital expenditure. This is what allows NHS Trusts to spend on core infrastructure, both physical and digital. As well as medical equipment and medical devices such as scanners for cancer and ambulances. Between 2010/11 and 2014/15 capital spending was subjected to a 17% cut. In more recent years, its budget has been consistently raided in order to prop up social care and the day-to-day running of front-line NHS services. In 2018 Jeremy Hunt raided £1bn from the budget to go towards funding social care.

Not only is such an action perverse in light of the fact that the Conservatives have subjected social care to an overall cut of £7bn since 2010, it was also a brazen example of the short term thinking which has led to the breaking down of ambulances during last years “winter crisis”, the breaking down of CT scanners, blocked drains and sewage leaking into clinical facilities, leaks from ceilings going onto active operating tables and even the collapse of an entire floor of an NHS hospital. …”

https://www.redpepper.org.uk/theresa-mays-nhs-long-term-plan-spells-more-cuts-and-privatisation/

“Labour ‘will ban’ outsourcing of public services to private firms”

“Private companies will be banned by a Labour government from running services that deal with vulnerable people and their rights, under a far-reaching plan to restrict outsourcing.

The party has drawn up the plan in response to what it describes as a series of “outsourcing disasters” involving services handed to private firms – from testing for sickness benefits to the operation of some NHS cancer services.

Under the plan, contracts that deal with people deemed to be “at risk”, and contracts that infringe on human rights or entail the use of “coercive powers” can not be outsourced. People “at risk” are defined as those who rely on state protection, be they prisoners, hospital patients or benefits recipients. The new rules would kick in when current service contracts expire or are terminated.

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Exceptions will be built into the system. The new rules will not apply to contracts of less than a certain value, or where it can be shown that “at risk” people are best served by an existing private contractor. State bodies will be able to argue that they do not yet have the capacity to carry out the service.

The plan comes after a series of high-profile outsourcing rows. The Labour leader, Jeremy Corbyn, has criticised the privatisation of cancer-scanning services in Oxford, with doctors warning that this could damage patients’ health. The private company InHealth has been given a contract to deliver positron emission computerised tomography (PET-CT) scanning in the Thames Valley. The service was taken away from the NHS trust’s Churchill hospital in Oxford.

The plan is likely to be backed by unions, but could cause concern in councils under financial pressure after years of cuts.

Last summer, the Ministry of Justice was forced to take control of Birmingham prison from the contractor G4S, after inspections found that prisoners were regularly using drink, drugs and violence, and corridors were littered with cockroaches, blood and vomit.

The party has repeatedly criticised the outsourcing of assessments for Personal Independent Payments and for Employment and Support Allowance, saying that this has led to a breakdown in trust between disabled people and their health assessors.

Both central and local government would have to follow new statutory guidance under the plan, which would see a major increase in the services run in-house by councils and Whitehall departments.

Andrew Gwynne MP, the shadow communities secretary, said that the public had “paid the price for outsourcing”.

“The Tories’ dogmatic commitment to markets at all costs has delivered sub-standard services at inflated prices,” he said. “And when they fail, as they often do, it’s the taxpayer who picks up the bill. Labour is proposing a radical new settlement that gives people the power to end outsourcing and decide for themselves how best to deliver the services they need.

“For too long this country has been run by, and in the interests of, a few who are all in it together. It’s time to bring democracy and accountability back to government, and put power in the hands of the many.”

The plan is likely to be backed by unions, but could cause concern in councils already under financial pressure after years of cuts. The plan is part of a wider Labour strategy to return services to public hands. It marks an attempt by Labour to show that it is serious about implementing major changes to the economy, while gaining distance from party splits on Brexit.”

https://www.theguardian.com/politics/2019/mar/24/labour-ban-outsourcing-public-services-private-firms

“Shadow state” and privatisation – part 4

“Police have launched a criminal investigation into allegations of fraud at the UK’s largest government-funded apprenticeship provider.

Derbyshire constabulary said its specialist fraud investigation unit has begun a formal fraud investigation into the collapse of 3aaa, which was training 4,216 apprentices at companies including Ocado, Volkswagen and the National Grid.

“A formal criminal investigation has been launched into 3aaa,” a police spokesman said. “This follows a number of allegations of fraud that have been made by the Department for Education against the firm. Officers from Derbyshire constabulary’s specialist fraud investigation team will now begin the process of making formal inquiries into these allegations.”

The firm, which received £31m of government money last year, was placed into compulsory liquidation in October 2018 after the DfE withdrew all funding following allegations of fraud.

More than half of the apprentices being trained by 3aaa – which stands for aspire, achieve and advance – have been left in limbo by the collapse. Almost 2,000 of the 4,216 apprentices have been moved to new providers.

The founders of 3aaa, Peter Marples and Di McEvoy-Robinson, resigned as directors of the company shortly before its collapse last year.

Separate to the fraud allegations, an investigation by the Guardian and the higher education journal FE Week revealed that 3aaa had spent £1.6m of its mostly government-funded income on professional sports sponsorship.

The money was spent on sponsorship between 2015-18, despite the firm making a £2.8m pre-tax losses in the 18 months to January 2018, according to unpublished company accounts.

It spent £480,000 to become the “principal partner” of Derbyshire county cricket club, which includes shirt sponsorship and the right to rename the club’s 147-year-old ground as “the 3aaa County Ground”.

The sponsorship deal gave Marples and McEvoy-Robinson access to the team’s 1870 Business Club – a “relaxed and informal environment where local businesses can meet, create new contacts and watch first-class cricket”. Marples and McEvoy-Robinson are seen in the club’s team photo.

There is no suggestion that the sports sponsorship deals form part of the police fraud investigation.

A DfE spokesperson said: “As a criminal investigation is now under way, it would be inappropriate to comment further at this time.”

It is the second time the DfE has investigated alleged wrongdoing at 3aaa. A previous investigation in 2016 by the auditing firm KPMG found that 3aaa had been overestimating its apprenticeship success rate.”

https://www.theguardian.com/uk-news/2019/mar/18/derbyshire-police-criminal-inquiry-failed-training-firm-3aaa-fraud-allegations-department-education

Shadow state – part 3

And now the Chartered Institute of Public Finance and Accounting agrees privatisation isn’t working. The National Audit Office and the Government’s own Public Accounts Committee have said the same.

Will this cause a change of policy – particularly in the NHS? Not a chance!

“The collapse of outsourcing giant Interserve will be “costly and disruptive” for the public sector, a public services commentator has told PF.

Interserve, one of Britain’s biggest government contractors, was due to file for administration this evening. This was after just under 60% of the company’s shareholders voted against a rescue plan earlier today.

The business holds thousands of public sector contracts, including for local government, cleaning schools and hospitals. It also runs catering and probation services as well as managing construction projects.

John Tizard told PF that public sector clients will need to “spring into action either to bring the services back into public management or to broker the contracts to other contractors”.

The firm’s collapse will likely be “costly and disruptive” for public services, he added. The ‘deleveraging plan’, proposed on Friday, would have seen creditors take control in a ‘debt-for-equity’ swap. It was rejected 59% to 41% by shareholders.

The rescue plan would have meant lenders being given the greater number of shares in the business with the shareholders’ stake being reduced to 5%, the BBC has reported. A US hedge fund Coltrane, which owns 27% of the company, voted to reject the proposals.

Tizard told PF: “It’s another question mark over the appropriateness of outsourcing particularly on this scale – to companies that have business models which are risky and fragile and where ownership changes.

“They are likely to go into administration because Coltrane has said they won’t vote for the deal, but can we really afford to have key public services decided by US hedge funds?” he queried.

Tizard said he had no doubt that contingency plans will have been drawn and added that it was now necessary for public sector clients to implement these.

Interserve employs 45,000 people in the UK. Its website also states that it provides probation services for 40,000 people on behalf of the Ministry of Justice.

A damning report from the National Audit Office recently highlighted the failings of prison reforms, which saw probation services transferred to the private sector.”

https://www.publicfinance.co.uk/news/2019/03/public-sector-likely-suffer-collapse-interserve

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

EDDC HQ builder goes bust – another privatised services company bites the dust

Shareholder lose money one day, debtors get nothing, hedge fund starts it up again next day with no debts. Who profits? Not us.

“The government contractor Interserve has gone into administration after its largest shareholder, the US hedge fund Coltrane, led a rebellion against financial rescue plans drawn up by the company’s lenders.

About 16,000 small shareholders have lost their investment, with the business sold to hedge funds and banks via a “pre-pack” administration which means Interserve, which employs 45,000 people in the UK, can continue trading.

Interserve has thousands of government contracts including hospital cleaning, school meals and maintenance of military bases in the Falklands. It also runs parts of the probation service, which was part-privatised under a heavily criticised process overseen by the former justice minister Chris Grayling.

The company and the Cabinet Office, which oversees state suppliers, said there would be no disruption to the public services that Interserve manages and job losses were not expected in the short term and the pension scheme was protected.

Interserve’s chief executive, Debbie White, said: “Interserve is fundamentally a strong business and with a competitive financial platform in place we see significant opportunities as a best-in-class partner to the public and private sector.”

But the failure of another outsourcing firm, little more than a year after Carillion’s collapse, sparked fresh calls by trade unions and Labour’s business select committee chair Rachel Reeves for public services to be taken back in-house. …”

https://www.theguardian.com/business/2019/mar/15/interserve-to-go-into-administration-after-shareholders-reject-deal

Better hope new EEDC HQ is in good nick …

… as its builder is on the ropes and 45,000+ people could lose jobs. Unless we, the taxpayers, pick up the bill – again.

https://www.bbc.co.uk/news/business-47513850

“At last we are turning away from our mania for hiving off public services”

Owl says: Do not be mislead into thinking, when reading this article, that the NHS has stopped privatisation. In fact, it simply makes it cheaper and easier for private companies to compete with the NHS.

“… In the wave after wave of attacks on the NHS launched by the right, the issue of values is brushed aside. The monopoly of the NHS must be broken. Forget the principles of the co-operative: in practice, runs the argument, it becomes an inefficient monopoly of production and delivery that must be challenged by private sector competition. The NHS can still be free at the point of use, but the structures that provide health must be the closest simulacrum to a market as possible. The NHS can be reduced to a brand that houses a hyperefficient network of private sector deliverers competing for contracts.

Hence the Andrew Lansley health “reforms” in 2012 that compelled the NHS to outsource delivery. But the same thinking informed the Tories’ engagement across the public sector. Thus justice secretary Chris Grayling’s probation service “reforms” in 2013 and the normally sane Philip Hammond, as defence secretary, agreeing that army recruitment could be contracted out to Capita in 2012. Tory antipathy to the public sector was given free rein, the lush public outsourcing industry was turbo-boosted – and the public sector fragmented.

Last week saw the death knell of all three “reforms” and with it a pillar of thinking that sustains the current Tory party. Thursday’s call by NHS England to repeal section 75 of Lansley’s Health and Social Care Act, which requires every significant contract worth cumulatively more than £600K to be outsourced in any circumstance, replacing them with a best value test, is a watershed. It will empower commissioners to weigh up whether the loss of an integrated, co-operative service by outsourcing offsets any short-term financial gain. A health system is a structure of interconnected moving parts that requires co-ordination, backed by the overriding principle that the alpha and omega of decision making is care, not maximum profit. …”

https://www.theguardian.com/commentisfree/2019/mar/03/at-last-we-are-turning-away-from-our-mania-for-hiving-off-public-services

When privatisation goes (so terribly) wrong, who suffers?

But no worries – a very few people have got very, very rich on the back of these failed projects!

“The Ministry of Justice’s “botched contracting” of probation services will cost the taxpayer £467m.

Reforms to probation services, which began in 2013, have failed to meet expectations, the National Audit Office has said in a report out today.

Although, contracts with probation providers were ended early, the ministry’s “rushed roll-out” will still be costly, the NAO concluded. …”

https://www.publicfinance.co.uk/news/2019/03/mojs-probation-services-contracting-botched-and-costly

AND

Fresh shots have been fired at the Ministry of Defence (MoD) from both government and private sector for failures in procuring public contracts.

The department must share the blame with outsourcing giant Capita for “failing dismally” at meeting the Army’s recruitment targets, a service which the FTSE 250 firm was tasked with delivering in 2012, MPs said on Friday.

The influential Public Accounts Committee (PAC) group of MPs accused the Army of “naively” launching into the decade-long contract, and said Capita did not fully understand the complexity of it.

PAC chair Meg Hillier said the contract was “intended to meet the Army’s annual recruitment targets and save money in the process”.

“It has failed dismally at the former and has a mountain to climb in order to hit its target for the latter.”

A December report by the National Audit Office found as of July 2018, the Army was seven per cent below its required strength in terms of regular soldier numbers due to the lack of successful recruitment. …”

http://www.cityam.com/273964/your-country-needs-you-capita-and-mod-must-share-blame

Another Grayling privatised company bites the dust – leaving us less safe

“A private company which manages thousands of offenders in England and Wales after they are released from prison has collapsed into administration.

Working Links, a company that owns three community rehabilitation businesses which deliver probation services in Wales, Avon and Somerset and Cornwall, went bust on Thursday night.

A spokesperson for the Ministry of Justice (MoJ) said they had been aware of the company’s financial situation since October, and said it had put in place contingency plans to ensure “offenders will be supervised and the public will be protected”.

The union representing probation officers in the UK has reacted with anger to the news.

Ian Lawrence, general secretary of Napo, said: “This is exactly what we warned the government about from day one of this disastrous privatisation programme that has seen an award-winning service fall into total chaos in just four years.”

Chris Grayling was responsible for privatising the care of low-to-medium risk offenders four years ago as part of his reforms when he was minister for justice.

The MoJ said Working Links services would be handed over to Seetec, who manage community rehabilitation centres in Kent, Surrey and Sussex for the time being.

They also said they would bring forward plans to bring probation services in Wales back under government control.

Seetec confirmed they would transfer all of Working Links staff to their books.

The company’s executive director, Suki Binning, said: “It has been a challenging and uncertain period for probation teams in these regions, during which they have worked tirelessly to support the people they manage and protect the public.”

Lawrence slammed the government’s handling of the situation, adding: “Napo has continually pleaded with ministers to terminate the contracts between the MoJ and Working Links following highly critical reports from HM Inspectorate of Probation and a litany of high profile Serious Further Offences including a number of murders.”…”

https://www.huffingtonpost.co.uk/entry/working-links-government-probation-contractor-goes-into-administration_uk_5c66d60fe4b033a799420268

“Bus Companies Earned Billions Amid Savage Cuts To Routes, Analysis Shows”

“Bus companies in England pocketed a total of £3.3bn in profits while they presided over swingeing cuts to vital routes, figures show.

Private firms together made hundreds of millions operating busses outside London each year since the coalition government came to power in 2010, official data has revealed.

Yet a report by the Transport Commissioner found almost 17,000 bus routes have disappeared over the past five years.

HuffPost UK reported last week how tightened council budgets have made bus services that were under-used, but previously considered essential, vulnerable to cuts.

Labour – which analysed the figures – said the stats highlighted how the bus industry “puts profit before millions of passengers”. …”

https://www.huffingtonpost.co.uk/entry/bus-companies-earned-billions-amid-savage-cuts-to-routes_uk_5c51b9f5e4b0d9f

Information Commissioner wants Freedom of Information Act extended to outsourced companies

“The Information Commissioner has called for the Freedom of Information Act 2000 (FOIA) and the Environmental Information Regulations 2004 (EIR) to be updated to include organisations providing a public function.

In a report to Parliament, ‘Outsourcing Oversight? The case for reforming access to information law’, Elizabeth Denham said: “In the modern age, public services are delivered in many ways by many organisations. Yet not all of these organisations are subject to access to information laws.

“Maintaining accountable and transparent services is a challenge because the current regime does not always extend beyond public authorities and, when it does, it is complicated. The laws are no longer fit for purpose.”

She added: “Urgent action is required because progress has been too slow. It is now time to act. This report sets out solutions that can extend the law to make it fit for the modern age.”

Denham said the main aim her report was to make an evidence-based case to extend the reach of FOIA and the EIR “to enable greater transparency and accountability in modern public services, which in turn improves services”.
The Commissioner said in the report that she would welcome a Parliamentary Inquiry via a select committee into the issues raised. The ICO has submitted the report to the Public Accounts Committee (PAC) and PACAC for their consideration. …”

http://www.localgovernmentlawyer.co.uk/index.php

“What It’s Like To Lose Your Local Post Office”

Another in the Huffington Post series of the effects of local authority cuts:

“Mole Meade is dedicated to the Post Office. The trade union rep has spent half of his life working as a clerk, while also representing its thousands of employees.

But after 30 years, his expresses his loyalty to the firm in a different way. He now frequently fights alongside councillors and community leaders to halt the disappearance of post offices from British high streets, as branches are closed across the country.

“I’ve seen it go through rack and ruin,” says Meade, who is now an executive at the Communication Workers Union.

Last year, Lewisham in London lost the last two Post Offices branches directly controlled by the company, known as “crown” sites, as Sydenham and New Cross pulled down their shutters for good in a move local councillor Alan Hall described as a “national scandal”.

But the Post Office has been under immense pressure to shut down those branches. Crown post offices now make up just 2% of the national postal network, having fallen from 373 branches in 2009, to 262 in March last year. Mostly, they have been subsumed into local news agents, or WHSmiths.

The closures are particularly poignant in light of rising concerns about the death of the high street, and discussions about how to draw more customers in as numbers continue to fall nationwide. Forecasters predict some 175,000 jobs could be lost as footfall declines again this year.

“You’ve got a government currently banging on about ‘oh, we’ve got to do something about the high street’, and they’re the ones killing it off,” Meade said.

The Sydenham closure was “probably one of the most offensive” closures, he said. It wasn’t just a place to post a letter or a package – as a full service site it was also where people could apply for work permits, or sort out issues with their immigration status.

“What happened in Sydenham, this happens in every office that’s got UK border agency facilities. People who come to Britain for economic, political, asylum reasons have to get UK border agency facilities at some point and with the closure of Sydenham, those facilities evaporated,” he told HuffPost UK.

But like so many decisions driven by austerity over the past few years, the closure made sense on paper. Services were not withdrawn completely, and people could go to WHSmith stores for some of the things the post office provided them with. But as with similar cuts across the UK, there was a quiet but profound impact on the people who relied on it.

The slow decline of the post offices is just one of the cuts that we have been examining in our new series, What It’s Like To Lose. After nearly eight years of shrinking local budgets, HuffPost UK has been focusing on the disappearing bus routes, leisure centres, clinics and job centres that together paint a picture of what life is like for millions of people who rely on public services in the age of austerity.

Now, the shuttered branch in south London’s New Cross stands vacant. “This was a post office that was very well used – always queues out the door. So there was very much a need in the neighbourhood, and we didn’t want either of them to go,” says Laura Wirtz, a local resident.

Wirtz was an instrumental figure in the campaign against the New Cross closure, heading up the petition of 3,000 signatures which was eventually presented to Downing Street last February.

She told HuffPost UK: “When I started the campaign and started taking the petitions around the pubs, I would hear comments like ‘Oh, we’re going to lose that as well?’.”

“We’d already lost the bank, and the library was only kept open for two days a week but then volunteers are running it. We’re just losing all of our essential services and the only things that still exist are private, promotional spaces.

“There’s nothing owned by us, nothing that’s for the community and so there’s just a general feeling that the amenities we depend on, they’re not going to be open for us, and there’s nothing we can do about it.”

But this is not simply a story of one post office being closed, says Lewisham councillor Joe Dromey, who opposed the closure of the New Cross crown site. This was a whole constellation of pressures. “It’s part of a wave of closures of Crown post offices we’ve seen in recent years which has been an effort by the post office to save money and cut costs,” he told HuffPost UK.

“The reason why it delivers big savings for the Post Office is because it replaces decent, well-paid union organised jobs on secure terms, with low-paid, insecure work. The savings are on the back of undermining decent, quality work,” he said.

Grievances were aired at local council meetings last year, with local residents fearing the economic impact of the closure, as well as longer queues and poorer service. Consultations were even held between residents and Post Office bosses, which councillor Liam Curran labelled a “cosmetic exercise”.

A campaign was launched online, adopting the #SaveOurPostOffice hashtag. Their action culminated in a number of petitions being presented to Downing Street. But it didn’t stop the closures.

Curran told HuffPost UK: “They all closed down one by one. Last year, there was about just under 300 that were crown branches. But before that, there was thousands and thousands of them. Now they’re closing, despite all the lobbying a petitions from people up and down the country, they’re being ignored.”

Founded in 1986, Post Office Ltd now has a network of 11,500 branches across the UK, directly employing 8,000 employees in its Crown branches, and 50,000 in its sub-post offices. It broke off from the privatised Royal Mail in 2012 to become an independent, state-owned firm as part of the Postal Services Act 2011.

But it has weathered challenging conditions, and faced questions over its viability as it began to report losses reaching £108m in 2007.

In a bid to overhaul the brand’s fortunes, the government provided a £1.7bn cash injection in 2007, in hopes that it could become profitable again by 2011. Part of this deal saw 85 Crown sites close, most of them sold to retailer WHSmith.

The 2007 government subsidy was followed up in 2010 with £1.3 billion in funding to help the firm further. As part of efforts to modernise, it introduced two new types of shop – open plan ‘main sites’ with longer hours and more services, and ‘local style’ post offices which are housed within corner shops and are open during retail hours.

Simultaneously, the number of Crown sites fell, with figures showing that by the end of March, there were 262, making up 2% of the entire network, compared with 373 in 2009. A 10-year deal was drawn up between Post Office Ltd and WHSmith, in which 61 sites are to be sold to the high street giant until 2026.

Curran said he fears that the government is set on privatising the Post Office completely. “It’s the equivalent to a national service like the railways, water, power, that actually should be under the ownership of the public through the government, and that provides a service that benefits people.”

He said it is part of “the story of wider privatisation, and government priorities.”

The Post Office told HuffPost UK it does not take branch changes lightly.

“The Post Office is not immune to the pressures facing all retailers, and we must respond to the unprecedented change taking place on high streets and adapt to changing customer needs.

“We want our services to remain at the heart of communities, including in Lewisham, in a way that’s financially sustainable, not just for today’s customers but tomorrow’s too. 98% of the Post Office network is run in this way, on an agency or franchise basis. It’s a model that works through delivering the benefits of shared overheads and footfall.”

The company reassured customers that they would still be able to rely on the facilities they expect, adding that there are “very rarely changes” to services over the counter.

“We do not make changes to our branches lightly – but we need to make them if we are to ensure that our services remain at the heart of towns and cities, not just in the short term, but for the long term too.”

It is clear that, amid the changing face of New Cross high street, the loss of the Crown post office signifies the fall of yet another constant, a reliable community nerve centre.

Meade said: “It affects the very fabric of our high streets and our society, because what you can’t put a price on is a person, whether young or old, can go to the post office weekly, and that’s probably the only people they speak to.

“You can’t put a price on that.”

https://www.huffingtonpost.co.uk/entry/what-its-like-to-lose-your-post-office_uk_5c46f58ae4b0bfa693c6e267?guccounter=1

Outsourcers should be allowed to fail – says outsourcing boss

“Politicians and regulators responding to Carillion’s collapse should resist the temptation to turn outsourcing companies into “safe spaces” that cannot fail, the boss of a rival has urged.

Carillion, which built roads and hospitals and provided cleaning and catering to the public sector, went under one year ago this week, leading to calls for tighter rules for outsourced services and greater scrutiny of those providing them.

But Rupert Soames, who led Serco through its own financial crunch four years ago, told The Sunday Telegraph: “You will get companies that are ­well-run and ones that are badly run – and the bad ones should go bust. …”

https://www.telegraph.co.uk/business/2019/01/20/outsourcers-must-allowed-fail-says-soames-anniversary-carillion/

Chilling report on NHS sustainability – it isn’t sustainable

Owl says: anyone who cares about the NHS should read EVERY PAGE of this 58-page report, which is written in clear and accessible language.

Every page signals a death-knell for the NHS sooner rather than later.

It is hard to pick out anything – every page tells a story of (deliberate?) mismanagement, underfunding and chaotic accounting.

For example:

“Key findings

The funding settlement for the NHS long-term plan

8 The long-term funding settlement does not cover key areas of health spending. The 3.4% average uplift in funding applies to the budget for NHS England and not to the Department’s entire budget. The Department’s budget covers other important areas of health spending such as most capital investment for buildings and equipment, prevention initiatives run by Public Health England and local authorities, and funding for doctors’ and nurses’ training. Spending in these areas could affect the NHS’s ability to deliver the priorities of the long-term plan, especially if funding for these areas reduces. The government will consider proposals in these areas as part of its 2019 Spending Review. In addition, without a long-term funding settlement for social care, local NHS bodies are concerned that it will be very difficult to make the NHS sustainable (paragraphs 2.27 and 2.28).

9 There is a risk that the NHS will be unable to use the extra funding optimally because of staff shortages. Difficulties in recruiting NHS staff presents a real risk that some of the extra £20.5 billion funding will either not be used optimally (more expensive agency staff will need to be used to deliver additional services) or will go unspent as even if commissioners have the resources to commission additional activity, health care providers may not have the staff to deliver it (paragraphs 1.19 and 2.29).

10 From what we have seen so far, the NHS long-term plan sets out a prudent approach to achieving the priorities and tests set by the government, but a number of risks remain. The long-term plan describes how the NHS aims to achieve the range of priorities and five financial tests, set by the government in return for the long-term funding settlement, which NHS England believes are stretching but feasible. As with all long-term plans, it provides a helpful indicator of the direction of travel, but significant internal and external risks remain to making the plan happen. These risks include: growing pressures on services; staffing shortages; funding for social care and public health; and the strength of the economy. Our reports have highlighted how previous funding boosts appear to have mostly been spent on dealing with current pressures rather than making the changes that are needed to put the NHS on a sustainable footing (paragraphs 2.24 to 2.26).

Financial and operational performance of NHS bodies

11 In 2017-18, NHS commissioners and trusts reported a combined deficit of £21 million. This was made up of:

The combined deficit of £21 million does not include adjustments needed to report against the Department’s budget for day-to-day resources and administration costs.

12 It is not clear that funding is reaching the right parts of the system.
The overspends by trusts and CCGs were broadly offset by the underspend by NHS England. In 2017-18, NHS England’s underspend included: £962 million from non-recurrent central programme costs, including efficiencies from vacancies;

a £280 million contribution to the risk reserve and £223 million from centrally commissioned services, mostly specialised services (paragraphs 1.4 and 1.8).

13 Most of the combined trust deficit is accounted for by a small number of trusts, while the number of CCGs in deficit increased in 2017-18. The net trust deficit hides wide variation in performance between trusts, with 100 out of 232 trusts in deficit. In 2017-18, 69% of the total trust deficit was accounted for by 10 trusts. NHS Improvement has committed to returning the trust sector to balance in 2020-21, but it is difficult to see how this will be achieved for the worst-performing trusts under current arrangements. Although support provided to trusts in NHS Improvement’s financial special measures programme has been successful in improving the position of some trusts (by £49 million in 2017-18), the financial performance of the 10 worst-performing trusts deteriorated significantly in 2017-18. Between 2016-17 and 2017-18, the number of CCGs reporting overspends against their planned position increased from 57 to 75. The NHS long-term plan sets out the national bodies’ aim that no NHS organisation is reporting a deficit by 2023-24 (paragraphs 1.6 and 1.11).

14 There are indications that the underlying financial health in some trusts
is getting worse. In 2017-18, trusts reported that their combined underlying deficit was £4.3 billion, or £1.85 billion if the Provider Sustainability Fund (which replaced the Sustainability and Transformation Fund in 2018-19) is allocated to trusts in future years. There is no historical data on the underlying deficit that takes account of one-off savings, emergency extra cash and other short-term fixes that boost the financial position of the NHS, so it is not clear whether this position is getting better or worse. However, indicators such as cash support and one-off efficiency savings suggest the position has not improved. For example, in 2017-18, the Department gave £3.2 billion in loans to support trusts in difficulty, up from £2.8 billion in 2016-17. In 2017-18, 26% of trusts’ savings were one-off. Trusts will need to make additional savings in 2018-19 to replace these one-off savings (paragraphs 1.13, 1.14, 2.13, 2.17 and 2.18).”

Click to access NHS-financial-sustainability_.pdf

“Surge in outsourcing after Carillion collapse ‘staggering’, unions say”

“Trade unions have accused the government of failing to learn lessons from the collapse of Carillion, instead pumping even more money into outsourcing companies, a year on from the firm’s high-profile demise.

The lifetime value of outsourcing contracts awarded in 2017-18 “rocketed” by 53% from £62bn to £95bn in the past year, according to the GMB union, which pointed to nearly £2bn in contracts awarded to Capita and Interserve despite both issuing profit warnings.

The GMB said this showed a government “hell-bent” on privatisation, despite the warning signs given by the collapse of Carillion, which managed public sector contracts to provide services such as prison maintenance and school dinners.

The GMB national secretary, Rehana Azam, said: “What other explanation can there be for this huge increase on outsourced contracts in the year Carillion went bust and when other outsourcing giants look like they’re on life support?”

The GMB’s criticism comes on the first anniversary of Carillion’s failure, which has cost the taxpayer an estimated £150m and has caused major delays to two multi-million pound hospital construction projects in Liverpool and Birmingham.

Unite, Britain’s largest trade union, bemoaned a lack of action taken against former Carillion directors, who were accused by a committee of MPs of “recklessness, hubris and greed”, reiterating calls for a criminal investigation. …”

https://www.theguardian.com/business/2019/jan/15/surge-in-outsourcing-after-carillion-collapse-staggering-unions-say

NHS: the REAL cost of privatisation

“The biggest emergencies-only hospital in Europe will take three years longer than expected to build and cost nearly twice its original budget.

The Midland Metropolitan Hospital was intended to treat 170,000 A&E patients a year from this summer but will not open until 2022. It will also cost at least £605 million, despite originally being priced at £350 million.

The problems were highlighted after Theresa May unveiled a ten-year strategy for the health service that included a £20 billion spending boost by 2023. The delay and increased costs were caused by the collapse a year ago of the construction company Carillion, halting building under the private finance initiative. The failure forced the NHS to implement contingency plans in 14 hospitals to maintain essential services delivered by Carillion.

The new 670-bed hospital in Smethwick, West Midlands, is meant to replace large parts of Sandwell Hospital and City Hospital, Birmingham. Carillion was paid £205 million towards the project before the firm’s collapse.

Toby Lewis, chief executive of the Sandwell and West Birmingham Hospitals NHS Trust, told its board last month that more than £400 million would be spent completing the hospital and keeping emergency services running at the Birmingham hospital.

The trust is paying Balfour Beatty, the construction company, £10 million to “winter-proof” the new hospital, which was left open to the elements. It is poised to seek bids from companies to complete the building, although some have already made clear that they are not interested.

John Spellar, Labour MP for Warley, said that outlay on maintaining existing hospital facilities had been cut in anticipation of the new building and that the delay was affecting recruitment and training. He said that civil servants were to blame for transferring too much risk to the private sector when they had “no concept what it actually means”.

A parliamentary inquiry into the failure of the multinational contractor with liabilities of almost £7 billion found that its “business model was an unsustainable dash for cash. The mystery is not that it collapsed but how it kept going for so long”.

Carillion was also building the Royal Liverpool Hospital, which features in a BBC Two documentary to be broadcast tomorrow. Aidan Kehoe, chief executive of the Royal Liverpool, tells the Hospitalprogramme: “I am very angry at the way Carillion have behaved. To leave us in this position is, I think, just unacceptable. These people are taking huge bonuses that they are not paying back and they are leaving the people waiting years more for a hospital. Serious questions have to be asked about the way Carillion have behaved.”

The £500 million Liverpool hospital building was due to be finished two years ago but is not expected to be completed until next year.

Jayne Halloran, an associate director at the Royal Liverpool and Broadgreen University Hospital Trust, said that it was expensive to maintain the partially built hospital, where 14 staff work full time turning taps on and off to stop legionella bacteria from growing. “It takes six days to complete that for the whole building,” Ms Halloran said.”

Source: Times, pay wall