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The UK outsourcing experiment: playing with vulnerable lives

A review of Alan White’s Who Really Runs Britain? — the private companies taking control of benefits, prisons, asylum, deportation, security, social care and the NHS.

A child looks out from the G4S hostel, June 2017 (John Grayson)

By any measure, the allegations of abuse by women imprisoned in Yarl’s Wood detention centre should be a public scandal, but despite a stream of reports prompting the Chief Inspector of Prisons to brand the centre “a place of national concern”, sustained campaigns and protests, there has not yet been a collective public outcry.

Research into the plight of women at the centre is hampered by a lack of access to official information. In June 2016, the Independent reported that a Freedom of Information request to the Home Office asking for further information about sexual violence against detainees was denied on the grounds that “disclosure would, or would be likely to, prejudice the commercial interests” of the company running it, Serco.

The lack of transparency by both the government and Serco, and the obstacle this presents to those seeking accountability for crimes against the women held there, are twin themes at the heart of Alan White’s book on Britain’s outsourcing industry, Who Really Runs Britain?.

Yarl’s Wood is just one of many case studies detailed in the book which illustrate both the vast scale of the outsourcing project and the devastating human cost when things go wrong and the lines of accountability are muddied. White examines key areas of the state where services are outsourced, including the NHS, Ministry of Justice, asylum services, social care, disabilities and unemployment — all arms of the state with which some of the most vulnerable people in society interact.

Still image, Channel 4 News investigation of Yarl's Wood, March 2015

The book opens with a memorable case study and one of the few outsourcing stories to permeate the national consciousness, the mismanagement of the security project for the 2012 London Olympics by G4S, which resulted in the army standing in at the last minute. It’s one of the few stories that made a national impact, as the country and the world were focused on London in 2012. However, White notes that “while the implications of the scandal seemed severe for G4S at the time, they actually made little impression on it or the industry”.

White goes on to reveal an industry enjoys lack of competition and oversight, meaning that companies like G4S will have multiple contracts and be constantly bidding for more, despite sometimes high-profile failures.

Counter intuitively, some contracts are not particularly profitable for the companies involved. However, they are low-risk, as the state provides a safety net in the event of failure, and there are guaranteed inflows of cash.

White returns repeatedly to the human cost of failure. As a society, we have to ask ourselves, what is an acceptable level of risk when lives are on the line?

The major incentive for the state is supposed to be savings, but interestingly, sometimes outsourcing costs more.

White underscores repeatedly that finding data on the details, merits and outcomes of the outsourcing projects is difficult, partly due to the confidential nature of some of the contracts but also because there is no one place that all the information is systematically retained. This is exacerbated by the fact that corresponding figures for comparison don’t really exist for the period when the state ran the services. In essence the British outsourcing project is an experiment with no systematic method of evaluation.

In essence the British outsourcing project is an experiment with no systematic method of evaluation.

The sheer scale of the outsourcing project is facilitated by settled political ideology on its merits.

Labour firmly adopted the Tory idea of Private Finance Initiatives (PFIs) while in power. White notes that in the political context of New Labour’s compromise between social democracy and neoliberalism, “outsourcing was considered a natural development in a corporate-led world”. The pace has increased markedly since the coalition government in 2010. Although outsourcing itself is not an ideology, White notes that it is borne of one, and this consensus hampers cross-party criticism and oversight.

Despite the challenges in scoping the industry, White is at pains to point out that rather than a sinister plot, very often the problem is miscommunication or lack of communication between government departments. This book is not a polemic but a forensic and even-handed inquiry.

It becomes clear that four companies dominate the sector: G4S, Atos, Serco and Capita. The biggest spenders are the Department of Work and Pensions and the Ministry of Justice, funnelling hundreds of millions of pounds to these firms, which are too big to fail. They cover everything from security, transport or waste collection to “human services” such as welfare, prisons and probation services to transport, waste collection.

White’s book was first published last year with the title Shadow State, Inside the Secret Companies that Run Britain.

This new edition carries an afterword given over to voices from these companies, who, perhaps understandably, are often reluctant to engage with a critical media. Nevertheless, there is an acknowledgment from some in the industry of the “accountability vacuum” that White so eloquently unpacks in this book — and which is apparent in the case of asylum seekers housed in a “fire trap” G4S-run hostel in Halifax, recently exposed on Shine A Light. Multiple actors including a private landlord, G4S, the Home Office and Calderdale Council all have some responsibilities towards the tenants in the hostel. Activist John Grayson found that “one dangerous consequence of the privatisation of asylum housing, apparent in this case, is the fog around who is responsible for what”.

Companies like G4S are quick to point out that when things go wrong, they are often gagged from talking publicly about their contracts by the government on grounds of “commercial confidentiality”, while also being blamed for failures — adding to the confusion around accountability. They are also not allowed to trumpet their successes.

There are quite a few points of agreement between White and the outsourcers who have spoken to him both on and off the record: “they want many of the same things campaigners do: more transparency, more innovation, a more competitive market.”

But when it comes to figuring out why that hasn’t happened yet, we find ourselves in yet another fog of confusion with contractors and the government pointing fingers at each other.

Another point of agreement is that White does not believe outsourcing is inherently wrong, but he does suggest that it can be done better, perhaps by social enterprises, which have different aims and focus to large for-profit companies. Currently, small providers are squeezed out of the broken market. White points to places where outsourcing has worked, using local knowledge, smaller scale and an emphasis on putting the humanity back into human services. 

A physicist friend of mine once asked incredulously, how the company running the physics laboratory where he worked could be expert at this and also in everything from leisure services to traffic lights and still maintain standards?

White points to larger questions: is the for-profit incentive for private companies compatible with improving lives — a qualitative measure which does not sit in the neat margins of a profit/loss worksheet? Following lengthy interviews with advocates of outsourcing, he concludes: “Outsourcers will tell you how they can save money. But few can promise to make things better.”

Although the chief executive of Serco makes an impassioned argument that for-profit companies can still work for the public good,  a multitude of cases in the book illustrate that standards can fall in pursuit of profit, prompting White to explore whether the profit incentive encourages the contractor to do a good job or encourages them to game the system. For example, how does the need for repeat business square with targets of reducing reoffending rates in the prison system?

And surely, this should be the point. How should we, as a society, be caring for those among us who are most in need of it and maintain their human dignity?

There are clearly problems in the way that some projects are administered in that they do not take account of the complex needs of disabled or vulnerable people. White points out time and again that the human toll of failure is visited on groups that the public is least likely to care about, like asylum seekers, who are often out of sight and out of mind.

But, given that profits are not currently ploughed back into the services (or necessarily staying in the UK), this concerns all of us a matter of social value and the potential effect on society’s social fabric.

The outsourcing of public services without effective means of evaluation and rigorous oversight and accountability mechanisms is an experiment with very high stakes indeed. 

 

Who Really Runs Britain? The private companies taking control of benefits, prisons, asylum, deportation, security, social care and the NHS, by Alan White, is published by Oneworld on 6 July.


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