Public opinion around the 'humiliating shambles' of G4S' failure to meet their contractual commitments to provide security staff for the Olympic games moved from ridicule to anger and frustration when Chief Executive, Nick Buckles, also admitted their intention to keep the £57m 'management fee' - despite the obvious absence of any management. Here in Newcastle it was not difficult to observe the difference in the woeful performance of this huge private sector corporation with that of the city council who completed all of the tasks, duties and responsibilities it had been charged with in good time, on budget and with the usual degree of public service excellence.
Of course, it is the public sector that will be picking up the slack left by the failings of G4S. It was the Police Service that were drafted in last week and it is the army that has had to pull in off duty service personnel to make sure the Olympics security arrangements are properly resourced. It would be easy to make assumptions that this is further evidence that public services are much better delivered by the public sector, but this certainly should cause pause for thought in the current environment of 'open public services' and does match a contemporary trend in local government, in particular, reviewing the value of privatisation in terms of risk, quality of service, terms and conditions of employment and the broader economic and social impact utility of public spending.
The rewards to G4S, despite their failure, mirror the £500m pocketed by private equity firm Blackstone following the collapse of Southern Cross Care Homes, again leaving local authorities to respond to those needing care; Serco has recently been warned by the Care Quality Commission that its Out of Hours GP service is falling below required standards; and there is little evidence that rail services are much improved despite Train Operating Companies enjoying multi-million pound profits. These are not examples of the private sector delivering better outcomes for service users; they are examples of the private sector enjoying a feeding frenzy on public cash.
It is no wonder that there is a welcome trend of local government repatriating public services in the public sector. Public Services think tank APSE has shown that rather than the downward pressure on public finances forcing local government and others to automatically outsource provision, many are taking much more strategic, forward thinking decisions and bringing services back 'in-house', based on considerations about how they can maximise the value of public services to service users, rather than effectively lose a slice of public spending to satisfy the profit margins of the private sector.
Furthermore, public spending contracts are increasingly placing local economic, social and environmental criteria in their procurement processes, ensuring that the wider benefits to local communities, such as apprenticeships, decent wage levels and local employment, are factored in to any external contracts. This can only help raise employment standards and boost local economies over the longer term.
Briefing document (600 words) issued 23 Jul 2012
This page http://www.tuc.org.uk/economy/tuc-21260-f0.cfm
printed 22 May 2013 at 02:16 hrs by 220.127.116.11