Private sector ripping off the public sector – “can you believe it?”
Yesterday and today the media are reporting another story about contractors ripping off the public purse.
“private security company G4S for overcharging tens of millions of pounds on electronic tagging contracts for offenders.”
This branch has been clear from the start that if you use the private sector you need to have the skills and expertise and resources to manage them. In response to our concerns our council has responded by creating the commissioning council in order to manage the private sector using “relationship management” Who comes up with such jargon? In the real world with stories like G4S and Serco the relationship with all private sector contractors taking public money should be very clear:
“If you are taking public money and you don’t deliver you are not getting paid and if you over charge us then the contract is ripped up and you have to pay, end of story.”
However in order to enforce this you need lots of resources to ensure robust contract monitoring team…..but the catch here is that to do this can mean the business case for outsourcing does not stack up!
So with a history of private sector failures in the public sector what has been the clever thinking? Answer—The Thin Client!
UNISON has written at length about the ‘thin client’ . To put it simply it seeks to reduce the size of the client team down (less people monitoring the contractor) and relies unbelievably upon the contractor reporting itself..?
“You could not make this up but it is true.”
So when you read about G4S (again..Olympics anyone! ) and see they only found out when they started to re-tender, then it shows the ‘light touch’ approach to contract monitoring is simply unacceptable.
“Grayling told MPs that G4S and a second major supplier, Serco, had been overcharging on the existing £700m contract, with the Ministry of Justice being billed for non-existent services that dated back to at least 2005 and possibly as long ago as 1999.”
What does the above say about the culture of the contractors who must have know what they were doing?
(Footnote “the market’s instinctive reaction – 8% off Serco’s share price and 5.5% of G4S’s more lowly rated stock.”)
Did the Coalition government promise better control?
I remember back in 2010 government minister Francis Maude saying this in regards the private sector contracts with the government:
“We will expect you to be transparent in all your dealings with us and for the terms of the contracts we sign with you to go up online.”
Oh dear, not turned out as he hoped and he is now saying
“The public rightly expects government suppliers to meet the highest standards, and for taxpayers’ money to be spent properly and transparently. As a result of what the Justice Secretary outlined earlier today, I am launching an immediate review into government-held G4S and Serco contracts.”
You can read more here and here