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?

46 Responses to “Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab”

  1. Anonymous

    So is insourcing.

    Conclusion. Government is the problem, not the solution.

    With vast sums of taxation going on debts, pensions included, those paying won’t get any services

  2. whosebrightidea?

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab – //t.co/3Qq9i3b0

  3. HullRePublic

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab – //t.co/3Qq9i3b0

  4. Jill Hayward

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab – //t.co/3Qq9i3b0

  5. BevR

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab – //t.co/3Qq9i3b0

  6. Kevin Richards

    Wots happened to we're all init together Public sector outsourcing is a mess – and it's the taxpayer picking up the tab //t.co/jkECckPo

  7. Wendy Hibbs

    RT @leftfootfwd: Public sector outsourcing is a mess – and it's the taxpayer picking up the tab //t.co/xjZV0fzw

  8. Mr. Sensible

    What happened to ‘payment by results’ with the Work Program?

  9. vkellywallace

    Public sector outsourcing is a mess – and it's the taxpayer picking up the tab: //t.co/85XwLr9H : writes @danielelton

  10. CroydonNeighbourhood

    Is outsourcing really the best way? //t.co/sw5CUQzP

  11. PRO Solutions

    Public sector outsourcing is a mess – and it's the taxpayer picking up … //t.co/ho8CxIL6

  12. Tom More

    Public sector outsourcing is a mess – and it's the taxpayer picking up the tab: //t.co/85XwLr9H : writes @danielelton

  13. Blarg1987

    Dare I ask what would you recommend as a solution?

  14. Anonymous

    Two things spring to mind.

    1. When you are in a hole, stop digging.

    2. Doctor Doctor, it hurts when I press here. What shall I do? Stop pressing there.

    So the first two thing to do are

    1. Cut the deficit to zero by getting rid of the waste. There is vast amounts If civil servants can’t or won’t then they need to be sacked. Someone else will.

    That doesn’t take any money out of the economy, since those currently paying for it all get to keep some of their money to spend.

    2. Stop accruing any more off the book debts. The deficit removes the borrowing problem, but not the debt problem. For that future (not past) accruals to the state pensions have to stop. People then get forced to invest that money. Part of that needs a cap on charges. That provides huge sums of money for investment in things that generate cash [unlike HS2] It also aligns civil servants interests with the good of the country. If they don’t do this, their pensions go down the toilet.

    That provides lots of jobs for those that currently don’t have them, so long as you don’t pull in lots of low skilled migrants.

    Now for what happens to the people who haven’t saved enough. Well here we don’t help at all until what they have saved runs out. Welfare kicks in at the last minute. If the money doesn’t run out before they die, the money goes to their heirs. For married people then 50% of any contributions goes to the spouse, and the fund is ignored on divorce. [They already have half]

    This scheme helps poor people. They tend to die early, so their heirs benefit. They get the full benefit of their work.

    If you back test this for a median wage earn, even after the poor growth of the FTSE, they would have 19K verus 5K from the state. Which risk do you want to take? A certain 5K or 19K plus? The reason for the difference is lack of compound interest in a Ponzi. Also if there is a fund, they can’t increase the retirement age when they run out of money. However, I would insist on a referenda lock. No special taxation without a yes vote in a referenda.

    So it also deals with income inequality. You don’t get rich spending all your excess money on taxation.

  15. Blarg1987

    Interesting ideas, although, I think the waste in the public sector would require legislation due to the accountability problem e.g. pen pushers are needed to write everything down so if anyone needs to be held to account a paper trail is provided etc.

    Some goverment pension schemes are fully funded and invested in both goverment bonds and stock market, just as european pension funds are invested in the UK.

    There is however one problem witht he pension liability in that no one knows how the figures are broken down, as in does it inlude worst case assumption that BAE, BT etc who have pension guarentees will o bust etc?

  16. Government bonus crackdown ignores the outsourced sector - again | Left Foot Forward

    […] Elton, on Friday, reported on how the head of outsourcing firm A4e, which earns huge revenue from the public purse, received a […]

  17. Paul Gleeson

    RT @leftfootfwd: Public sector outsourcing is a mess – and it's the taxpayer picking up the tab //t.co/yDVnEXFL

  18. MrHippy

    My wife is currently employed delivering the work Program. It is quite frankly an utter disaster. In her case the contract was outsourced to G4S (who couldn’t organize a bun fight in a bakery) who then subcontracted it to the Local Authority. I’m no business whizz but surely the traditional cutting out the middle man to get a bargain still applies. Outsourcing just seems to be a way of adding extra middle men and ensuring that less and less funding actually reaches the coal face. This sort of complex bureaucracy and inefficiency is what the civil service was classically criticized for and now it seems that the free market is even better at it than government!

  19. H. O.

    RT @leftfootfwd: Public sector outsourcing is a mess – and it's the taxpayer picking up the tab //t.co/0cFEYjCq

  20. jbw

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab: //t.co/wqsLqqqg #PMQs

  21. Oxford Kevin

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab: //t.co/wqsLqqqg #PMQs

  22. Martin Steel

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab: //t.co/wqsLqqqg #PMQs

  23. Lynn Sheridan

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab: //t.co/wqsLqqqg #PMQs

  24. Lesley Farrington

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab: //t.co/wqsLqqqg #PMQs

  25. TheCreativeCrip

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab: //t.co/wqsLqqqg #PMQs

  26. SJ

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab: //t.co/wqsLqqqg #PMQs

  27. Rachel Benischke

    Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab: //t.co/wqsLqqqg #PMQs

  28. ed

    Public sector outsourcing is a mess, with the taxpayer paying 4 shoddy services too often #A4E #PMQs: //t.co/wqsLqqqg

  29. Martin Steel

    Public sector outsourcing is a mess, with the taxpayer paying 4 shoddy services too often #A4E #PMQs: //t.co/wqsLqqqg

  30. hans engelberts

    Public sector outsourcing is a mess – and it's the taxpayer picking up the tab | //t.co/SpsFjKtQ via @addthis

  31. Alice in Blunderland

    RT @leftfootfwd: How outsourcing in the public sector continues to be a mess //t.co/d6iYwE4o #pmqs

  32. Olivia Canham

    RT @leftfootfwd: Public sector outsourcing is a mess – and it's the taxpayer picking up the tab //t.co/c9SZ3qM5

  33. House Of Twits

    RT @leftfootfwd How outsourcing in the public sector continues to be a mess //t.co/apTGvwTN #pmqs

  34. Mark Martin

    How outsourcing in the public sector continues to be a mess //t.co/wqsLqqqg #pmqs

  35. Martin Steel

    How outsourcing in the public sector continues to be a mess //t.co/wqsLqqqg #pmqs

  36. David Marsden

    How outsourcing in the public sector continues to be a mess //t.co/wqsLqqqg #pmqs

  37. Kelvin Mason

    How outsourcing in the public sector continues to be a mess //t.co/wqsLqqqg #pmqs

  38. Janet Graham

    How outsourcing in the public sector continues to be a mess //t.co/wqsLqqqg #pmqs

  39. Colin Lawson

    Slowly it becomes clear: "Cameronism is essentially about championing taxpayer-funding of big business." //t.co/LXESo9Gj #SaveOurNHS

  40. NORBET

    How outsourcing in the public sector continues to be a mess //t.co/wqsLqqqg #pmqs

  41. Kyron Hodgetts

    It's nt just public sector but the outsourced sector where the taxpayer supports high pay&tax avoidance : //t.co/wqsLqqqg #PMQS #PFI

  42. Miles Douglas

    It's nt just public sector but the outsourced sector where the taxpayer supports high pay&tax avoidance : //t.co/wqsLqqqg #PMQS #PFI

  43. Sue Hoyle

    It's nt just public sector but the outsourced sector where the taxpayer supports high pay&tax avoidance : //t.co/wqsLqqqg #PMQS #PFI

  44. Right-wing think tanks much less transparent than left-wing organisations | Left Foot Forward

    […] Public sector outsourcing is a mess – and it’s the taxpayer picking up the tab 10 Feb […]

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