Tuesday, 2 June 2015

Outsourcing to Crapita doesn't make savings

Aditya Chakraborrty in the Grauniad has rather missed the point about outsourcing. Primarily because the poor fellow labours under the delusion that privatised services are free and only Council binmen cost money, thus he is outraged when Barnet's outsourced revenue services don't produce revenue savings. No dear, they won't. Crapita, G4S and their stable mates are experts at wringing profits out of public service contracts, whether from money-tree PPI or cost-squeezing simple outsourcing. They're contract experts and make their margins on all the additional charges having won the work on low bids for fixed-price core work. But if Barnet is doing things right, Crapita is only an intermediate stage.

One of the biggest costs to downsizing in local government are pension and redundancy costs associated with shedding staff with generous and protective T&Cs of employment. So Stage One is to transfer this risk out of the council. Risk in a contract should always be placed with the party best able to deal with it - and that generally means the Crapitas of this world. The second stage is to reduce contracts and contract scope until residual services are too small to be commercially viable when, unless they are statutory, they can be undertaken by the third sector and local volunteers to much public advantage.

The great exception of course are what are termed Childrens' Services - the armies of social workers who spend 75% of their time covering eachothers' backs in the event a child is abused on their patch. Until we find a solution to this, they will eat every pound of savings made elsewhere in councils.

NB - 
News of Charles Kennedy's death came in whilst I was writing. Shocking at age 55, it is perhaps not quite as shocking if his appearance on QT prior to the election was a clue. If losing his seat and watching his party nosedive drove him even deeper into the bottle in the last four weeks then death was just a matter of time. I love alcohol, but then I've always been the master and never its servant.


DeeDee99 said...

I never agreed with Charles Kennedy's political opinions; but the last few weeks of his life must have been pretty dreadful. RIP.

Kemi said...

I am deeply saddened to hear about Charles Kennedy's death. It is incredibly tragic. He provided the credible opposition in 2003, when the Conservatives were completley incapable of challenging Blair and Campbell and spoke for millions in the country.

He was in his 20s, the baby of the house when he won his seat in 1983. I don't believe he had known any other life outside politics. A lonely man, divorced from his wife and only occasionally seeing his 10 year old boy, being an MP must have been the only thing keeping him going.

He was clearly unwell during his QT appearance in March. To lose his father and his seat within a matter of weeks was probably just too much.

RIP Charlie.

Raedwald said...

Kemi, yes - As one of those who marched against Blair's war in February of that year I was deeply indebted to Kennedy for his leadership at a time when the Conservative party was largely compliant.

Scrobs... said...

His very human side was evident when he was on an LBC panel some years ago, with Austin Mitchell, and Julian Critchley. In fact you could forgive them for any of their politics, but probably he was the most articulate.

Anonymous said...

Outsourcing to Crapita doesn't make savings? Maybe it does, maybe it doesn't. My guess is that Crapita can make a profit by giving the same lousy service as a bunch of local government employees do for around the same price, maybe marginally less.

Mr Ecks said...

Replacing state socialism with corporate socialism is a marginal activity. The business goes to cheapjacks who put in the lowest bid and it is then in their interest to do as little as possible. Get rid of them both. The market operates where people pay direct to those providing the services. When some political or bureaucratic hack signs cheques to a private company you still have no say in any of it. Cut out the useless middleman that is the state.

TrT said...

Crapita can't fill out form 47b in triplicate any quicker, so it doesn't make savings
A real outsource solution would recognise form 47b is 8 pages long and is a request for a pen...