Examples of the failures, defaults and financial penalties incurred in outsourced and privatised services. Evidence from UK, Ireland, other European countries, Canada, Australia and developing countries.
Contract and Privatisation Failures
Published on 26th April 2005. Last updated 11th June 2017.
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Overview of Leisure Trust Performance
Comparison of performance of in-house and leisure trust services between 2000-2006 and summary of Bristol, Chiltern and East Herts trust failures.
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Pathways to Work
In 2008–09, £94m (38%) of Pathways to Work programme expenditure on employment support did not deliver additional jobs. Between 2005-10 the Pathways programme cost £793m but did not provide a net return to the Exchequer. “Although there has been a reduction of 125,000 claimants in receipt of incapacity benefits between February 2005 and August 2009,…
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Railtrack PLC replaced by Network Rail
Railtrack PLC, the privatised rail infrastructure company was placed in administration on 7 October 2001. Railtrack was sold for £1,904m in 1996 preceded by a £869m net debt write-off. The shares were priced at 390p, almost doubled in price within a year and by 1999 were over 1,600p valuing the company at £8bn, four times…
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Restructuring of Royal Armouries PPP/PFI project
The Royal Armouries moved from the Tower of London to a new museum in Leeds in 1996. The £43m PPP/PFI deal with Royal Armouries International (RAI – led by 3i Group plc,) included £20m from the museum and £8.5m from Leeds City Council and Leeds Development Corporation. However, visitor numbers were a fraction of those…
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Sale and lease-back of government buildings offshored
The New Labour government, keen to establish a market in the sale and lease-back of government buildings, announced a A$9 billion (£3.6 billion) private finance initiative deal with Mapeley Group in March 2001. It included 700 buildings of the Inland Revenue, HM Customs and Excise, and the Valuation Office Agency in the Strategic Transfer of…
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Savings greater if IT kept in-house
The majority of companies that have outsourced IT operations would have saved more money had they kept the services in-house, acc-ord-ing to a study of contracts worth more than £3bn. The outsourcing industry is facing a mid-life crisis with some “high-profile outsourcing deals being taken back in-house” and employers starting to question the value of…
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Scope of Strategic Partnership Reduced by Swansea City Council
The City Council signed a £83m contract with CapGemini in 2006 to transform IT services and promising £70m savings over ten years. However, a year later the contract was reduced to a £40m project with the abandonment of phase 2.
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Strategic Partnership Significantly Reduced by Redcar & Cleveland Council
Following a ‘strategic review of services’ HR and Payroll, Finance and Accounting, ICT, Public Access and Business support will be brought back in-house by September 2006 after only 3 years of the 10 year Liberata contract. Only 120 of 650 staff will be retained by company to continue to provide Council Tax, Revenues, Housing Benefits…
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Strategic Partnership terminated by Bedfordshire County Council
The Strategic Service-delivery Partnership (SSP) between Bedfordshire County Council and HBS Business Services was terminated by the County Council in August 2005. Nearly 550 staff were transferred from HBS back to the County Council. The report ‘Strategic Partnership in Crisis’ prepared by the Centre for Bedfordshire UNISON, published in April 2005, is available in the…
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Terminated UK PPP Projects
Details of 15 terminated PPP projects plus 5 other projects with major difficulties (download document).

