2012 news and events from the European Services Strategy Unit.
News and events from 2012.
- PPP Wealth Machine: UK and Global trends in trading project ownership: ESSU Research Report No 6
The average annual return on the sale of equity in UK PPP project companies was 29% between 1998-2012 – twice the 12%-15% rate of return in PPP business cases at financial close of projects. The excess profit could be £2.65bn, all of which benefits private sector companies. This report exposes the real level of profiteering in PFI projects and shows how the government’s new PFI model, Private Finance 2, does nothing to address the profiteering or lack of transparency. Includes a Global database of PPP equity transactions. Also ESSU UK PPP Equity database can be download at http://www.european-services-strategy.org.uk/ppp-database/ppp-equity-database/
- 英国社会服务：私有化的转变 UK Social Services: the mutation of privatisation, Dexter Whitfield
A paper written for Studies in Social Services, Li Bing, Vice Professor, Department of Sociology, Beijing Administrative College, China. Social services are at the forefront of the continued neoliberal transformation of public services and the welfare state in the UK. The paper applies the In Place of Austerity framework to examine the changes in social services. Paper in English and Chinese.
- Why a ‘thin client’ is a bad policy
This Barnet UNISON Briefing examines the London Borough of Barnet’s plan to allocate just 2.5% client costs in the planned outsourcing of planning, environment health, trading standards, highways planning and cemeteries. The amount allocated would hardly be adequate to fund contract management and monitoring, leaving nothing to fund other client functions. It discusses the effects of Barnet Council’s ‘thin client’ plans, commissioning and client responsibilities, resources required for contract management and monitoring and the consequences of under-resourcing the client function.
- Failures, delays and soaring cost of Barnet Council’s Street Lighting PFI contract
The London Borough of Barnet signed a £100m 25-year PFI street lighting contract with Barnet Lighting Services Limited (Bouygues Construction and Mill Group infrastructure fund) in April 2006. This Briefing details the delays and performance failures by the private contractor, the lack of audit despite the high risks and cost increases borne by the Council, and the lack of regular, comprehensive and publicly available monitoring reports.
- Beware the UK’s ‘community rights’: the latest mutation of privatisation, Open Democracy
Cutting through the coalition government’s rhetoric of localism and ‘community rights’, Dexter Whitfield exposes a strategy to further destabilise and fracture public provision, accelerating marketisation and privatisation. Link on right to article.
- New review of In Place of Austerity: Reconstruction of the economy, state and public services, Dexter Whitfield
Cathy Davis, Department of Environment and Life Sciences, University of Salford, UK in Housing Studies, 2012: “…the volume provides a wealth of detail about how neo-liberalist approaches are subverting and replacing state provision, predominantly in the UK as well as other Organisation for Economic Co-operation and Development (OECD) countries. Three introductory chapters outline the ‘deepening crisis’ from 2007–2008; the continuing ‘neo-liberal transformation’ of welfare state services and the growth of corporate welfare.” http://dx.doi.org/10.1080/02673037.2012.655041
- The Mutation of Privatisation published
The Mutation of Privatisation: A critical assessment of new community and individual rights, European Services Strategy Unit – Research Report No. 5, Dexter Whitfield – has been published by Spokesman Books, ISBN 978-0-85124-817-2, price £8.95, order online: http://www.spokesmanbooks.com/acatalog/Dexter_Whitfield.html
The study has been featured on the Australian Government’s Service Delivery in Government web site: http://servicedelivery.govspace.gov.au/2012/07/30/featured-reports-6/
- European Public Services Briefing 4: European Union Public Procurement Law, the public sector and Public Service Provision, Andy Morton
In the mid-1980s, prompted by the passing of Single European Act, the European Union embarked upon an ambitious programme of liberalisation to complete the Single Market. This included the opening up of many national industries to pan-European competition. EU public procurement law has been a crucial pillar to this agenda as EU institutions have sought to encourage cross-border, pan-European purchasing of public contracts. The paper examines the scope of EU procurement law, public markets vs public services, UK experience of outsourcing, PPPs and employment issues.
- The Mutation of Privatisation: A critical assessment of new community and individual rights, European Services Strategy Unit – Research Report No. 5, Dexter Whitfield
New community rights to bid, buy, build, challenge and provide are enshrined in legislation and Coalition policy. The government is also extending existing individual rights to buy and to personal budgets. This paper examines the objectives and scope of the new community rights and proposes a typology of public sector reform rights. It highlights the fundamental conflicts between ‘rights’, ‘choice’ and ‘contract’ cultures and localism. It assesses the conflicts and contradictions between community and commissioning, participation and empowerment, and the impact on democratic accountability, public finance, employment, equalities, the changing role of the state and community, voluntary and non-profit organisations.
- Public Pain: The insidious destruction of public services, Dexter Whitfield
“This is not so much a ‘hollowing out’ of the state, but a fundamental redirection to finance and manage markets and collusion in the deepening of corporate welfare.” Chartist, July/August 2012.
- Outsourcing of London Fire Control Centre reversed
The London Fire and Emergency Planning Authority (LFEPA) has reversed its decision to award a ten-year 999 Fire Control managed services contract to Capita plc. Instead the LFEPA will enter into a contract for a replacement mobilising system only. This means that the 120 control staff will remain employed by the Authority. ESSU produced a detailed analysis making the case against outsourcing for the FBU, UNISON and GMB late last year. The LFEPA report to the Authority’s meeting on 21 June 2012 can be accessed here.
- Commissioning Council plan exposed
UNISON has called on the London Borough of Barnet to immediately abandon its plan to become a Commissioning Council. The report by the European Services Strategy Unit (ESSU) documents the fundamental weaknesses in each stage of the procurement process for two large strategic partnerships of up to £1billion value and nearly 1,000 staff. The report documents the Council’s commissioning of two large strategic partnership contracts, assesses the Council’s reorganisation to become a Commissioning Council and examines the impact of this model for service users, elected members, staff and community and voluntary organisations. The Costs and Consequences of a One Barnet Commissioning Council study also revealed a systemic failure in contract management in Adult Services and proposes an alternative strategy.
- PPP/PFI Profits
Excessive profits obtained by PPP companies and banks is again in the news. The first evidence on the scale of excessive PFI profits and the growth the secondary market was detailed in *Global Auction of Public Assets* by Dexter Whitfield and followed by a more detailed research in *The £10bn Sale of Shares in PPP Companies*: New source of profits for builders and banks, ESSU Research Paper No. 4, by Dexter Whitfield in January 2011. This details the news coverage and links to reports.
- The payments-by-result road to marketisation, Dexter Whitfield
“‘Payment by results’ has become the new performance management mantra. It is intended to incentivise
contractors, with payment conditional on the completion of agreed outputs or outcomes. There are currently two such payment and reward models: the social impact bond mechanism and phased incentive payments.” This article examines the implications of this approach, the growth of ‘social markets’, incentive payment contracts and explains why it is a high risk strategy; pages 22-23, in Critical Reflections: social and criminal justice in the first year of Coalition government, Centre for Crime and Justice Studies, March 2012.
See also Research note: The “social enterprise-payment by results-social impact bond” privatization trilogy?, Margot Young, Canadian Union of Public Employees, April 2012.
- Recent events
In February Dexter Whitfield gave lectures at the University of Sheffield (Department of Sociological Studies), Queens University, Belfast (School of Management), given evidence to the Public Accounts Committee, Western Australia State Government, and a presentation to the Canadian Union of Public Employees bi-annual research meeting.
- Barnet’s high-risk strategy for customer and support services
An assessment of a business case update for the customer and support services outsourcing highlights the London Borough of Barnet’s approach – ignore real risks, miscalculate client costs, exaggerate savings, claim non-financial benefits that cannot be substantiated, inadequate equalities assessments and ignore the high failure rate PPP strategic partnership track record. The Council’s refusal to require services to be located in Barnet could lead to mass redundancies immediately after transfer.
- Plan B and Beyond
A critical assessment of Compass’s Plan B that reveals its shortcomings and need for a more radical and comprehensive socialist alternative, by Dexter Whitfield, Red Pepper Issue 182, Feb/Mar 2012.
- Transfer of Housing Service to Barnet Homes
A detailed analysis of the proposed transfer of the London Borough of Barnet’s Housing Service to Barnet Homes, the ALMO established in 2004. The Council truncated the options appraisal and business case into one process, limiting the options and pre-selecting the preferred option, and has led to a further deterioration in the quality of options appraisals and business cases in Barnet.
- Local Authority Trading Company (LATC) for Adult and Housing Services
The London Borough of Barnet plans to establish a LATC that requires Adult Services to generate up to 90% of the £0.7m annual profit. Yet the financial viability of Barnet Group Ltd (Yours Choice Barnet and Barnet Homes) is highly questionable. This report details the flawed appraisal process, the reasons for financial instability, governance and the potential impact on service users and staff.