Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab

From a4e to the care homes scandal, the outsourced sector is simply out of control with bonuses for poor performance.

From this morning’s Daily Mail, is the story that the head of A4E, which delivers the government’s work programme, was rewarded with a 300 per cent pay rise, despite the company failing its targets.

The  newspaper reports:

“Details of the massive payment were revealed during a hearing of the Commons public accounts committee into the Government’s flagship Work Programme.

“A4e is one of the main contractors and receives payments for helping the long-term unemployed find a job. Half of its work is subcontracted to charities, generating millions in management fees.

“MPs voiced astonishment at the size of the payment to Mrs Harrison, and questioned why the firm had continued to win contracts despite the ‘abysmal’ record.

“The company even received a share of £63million in ‘termination fees’ when the DWP ended a previous back-to-work programme in which the firm was involved and replaced it with a new one.

“MPs were told that A4e had missed its target of getting 30 per cent of people on the previous ‘Pathways to Work’ programme into a job. The committee heard the success rate was 9 per cent.

Across the outsourced sector, we have seen problems in getting value for money for taxpayers and the delivery of poor sources:

  • The failure of the Care Quality Commission to monitor state-funded private home cares adequately, as shown up by the routine abuse uncovered at Castlebecks’ Winterbourne View by Panorama.
  • That in the Conservatives’ flagship borough of Barnet, the so called ‘EasyCouncil’ where a maximum-outsourcing strategy was adopted, a private security firm was hired without a contract.  MetPro, that secretly filmed members of the public in council meetings, hired employees without the necessary authorisation.
  • The ongoing scandal, being investigated by Stella Creasy MP, of companies who bid for PFI contracts as part of a process that assumes they will pay taxes under normal arrangements, enabling them to charge more, but then go to extraordinary lengths to avoid paying that tax.

This is all at a time when the government intends to vastly extends the amount of outsourcing in the NHS. Left Foot Forward has argued before that Cameronism is essentaiily about championing taxpayer-funding big business.

With transparency desperately needed for the outsourced sector, surely the time has come for the Freedom of Information Act to cover these companies?

Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.