So Carillion has gone into liquidation, plunging the lives of the 20,000 people working for them in the UK and those reliant on the public services they are paid by the coffers supplied by taxpayers to provide, into uncertainty.
Carillion is one of largest providers of NHS facilities management, covering:
–200 operating theatres;
-300 critical-care beds and
-11,500 in-patient beds.
It also has contracts to maintain:
-50,000 armed forces’ houses;
– £680m contract to provide 130 new buildings in Aldershot and Salisbury plain for troops returning from Germany;
– It provides cleaning and school meals for 875 schools and
– Maintains 50% of prisons.
When governments began outsourcing the work for public services we were told it was a means of transferring the risks arising from major projects to the private sector.
Of course this has proven to be categorically untrue.
Outsourcing and privatisation doesn’t transfer risk to a company. Instead, it transfers any profits or savings made (coming from general taxation) to shareholders and leaves taxpayers exposed and vulnerable towards all the risks and failures; because if they fail the government bails them out.
Privatisation simply means no accountability for public money
For over a year now, Carillion has been in meltdown. Its shares have dropped 90% and it issued profit warnings, and went through three chief executive within six months Yet they continued to be awarded government contracts including the £1.4 billion HS2 contact.
Could the reason Carillion have continued to be given government contracts have anything to do with their Chairman, Phillip Green being a Tory Party donor?
Of course, while Carillion workers are likely to face a difficult time with regards to their future, no such worries exist for those who headed up the company.
Carillion’s pay policy wording was changed to make it harder for investors to claw back bonuses in the event of ‘corporate failure.’
Chief operating officer Richard Howson has made £1.9m in cash and share bonuses during his tenure while ex-finance chief Richard Adam has received £2.6m.
Shadow Business Secretary Rebecca Long-Bailey has already said contracts run by Carillion should be bought back ‘in-house.’
Rehana Azam, the National Secretary of the GMB Union, said: “The fact such a massive government contractor like Carillion has been allowed to go into administration shows the complete failure of a system that has put our public services in the grip of shady profit-making contractors.’
So what will happen next? Is this the beginning of the end of the privatisation of public services?
We are told that MPs will be holding an enquiry into outsourcing Public Sector jobs in the wake of the Carillion collapse.
Jeremy Corbyn echoes once again what most of us are thinking and hoping for. He has said that this ” Is a watershed moment for PFI contracts”.
One can hope.
What they will ‘find’ and act upon remains to be seen and many will feel that this is just the current government making another empty promise in a long and sorry saga of public services outsourced for private profit.