Shine A Light

Privatised justice and erosion of democracy in the UK

Public service outsourcers G4S and Serco were caught overcharging taxpayers by tens of millions of pounds for tagging and monitoring offenders. What happened next?

Michael Turner
27 August 2013

Justice minister Chris Grayling, having learnt precisely nothing from having the tax payers’ hands bitten by G4S and Serco over the tagging contracts, has handed the new contracts to: Capita, Telefonica, Astrium and Buddi.

I can not tell you much about three of those companies but Capita we know of old. They took over the court translating and transcribing contract and have cost the taxpayer fortunes by often not providing translators at all or if they do, ones not able to speak the language of the defendant or the court. Not surprising really, since 81 per cent of professional translators have refused to sign up to their service, due to the appalling pay and conditions offered to them. Capita’s slice of the tagging cake is £400 million over six years.

A source asked me to look at their translation and interpreting arm accounts for 2012 and interesting reading they make too. How, you might like too ask, does a company with a turnover of £21,138,244 make an operating loss of £15,004,222 ?

Well, it appears quite simple really. Your administrative expenses more than triple from the previous year to £9,337,657. You find an onerous contract expense of £6,270,810 for software development. Then you find you have creditor amounts of £16,607,703, £12,102,384 of which is owed to a wholly owned subsidiary registered in the USA and you need to make a £6,508,409 provision for future liabilities. Oh dear, Mr Grayling, no tax revenue coming your way again.

How much of the £400 million handed to Capita for six years work do you think will be coming back?

Grayling said last week that G4S and Serco needed to go through “a process of corporate renewal” before the Government might use them again.  This in itself is a questionable statement, given that he has got into bed with G4S providing prison labour to service insurance company call centres. A practice redolent of the corrupt prisoner governor in The Shawshank Redemption.

When on earth is he going to learn how the corporate beast operates? Has he not learnt from the disaster of the army recruitment contract also gifted to Capita last year? This time they received a ten year contract worth £44 million a year. They do like that figure of £440 million! Come 2013 it has emerged that Capita has so far managed to recruit 367 of the 30,000 targeted for recruitment to the army reserve.

Of course now they will have to call on the army to do what they have always done. No matter, Capita have trousered £440 million. The public will not get value for money either in the provision of public services or tax revenue until the blinkers come off.

Might I suggest some holiday reading for Mr Grayling and others in his party. Not a book by some left wing 'nut job' as Mr Grayling likes to think of me. But a book by the man credited with inventing the 'Big Society' — Ferdinand Mount’s.  “The New Few or a Very British Oligarchy”. Here is a true Tory insider terming our present trajectory as “the corrosion of capitalism and the erosion of democracy”.


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