Councils are ‘re-nationalising’ services after Carillion’s collapse

Left Foot Forward

From libraries to park staff, councils are taking back control after the collapse of outsourcing giant Carillion.

When Carillion went into liquidation last month, calls for outsourced services to be taken in-house were overwhelming. It seems councils and public bodies were listening.

More than 200 public bodies had signed some form of contract with Carillion in the last five years – with huge sums spent by government on the firm: nearly £1bn in 2016.

The reach of the company was varied and surprising: it is (well, was) was de facto the largest provider of libraries in the country – running four councils’ services as part of a deal with company John Laing. Some of these joint ventures had been branded ‘fake not-for-profits’ by campaigners.

But there’s change afoot. This week we heard news that Ealing and Harrow councils have brought their library services back in-house after Carillion collapse. Indeed, all of the libraries previously run by Carillion may now be back in public hands.

As The Bookseller reports:

“Carillion had run several public library services since 2013, including Hounslow, Ealing, Croydon and Harrow.

“Hounslow terminated its contract with Carillion last August and last week, Croydon Council stepped in to “secure the long-term future” of all its libraries and “guarantee the jobs of library staff” by taking the running of its library service back in house.”

Now Ealing and Harrow have joined them.

And while Harrow has not ruled out outsourcing again in the future, a spokesperson for the authority said: “The decision has been taken to bring the service under the direct control of the council.”

Campaigners We Own It have welcomed the move:

But there are plenty of other examples, too:

  • Nottingham’s hospital trust is bringing its car parking staff in-house
  • “Most of Oxfordshire’s contracts with Carillion are being transferred back to the county council early following an agreement made last July.” The remaining – facilities management services, involving the delivery of school dinners and cleaning services – will now be brought in-house early.
  • Hounslow is rushing to save park maintenance jobs
  • Carillion’s legal advice department are looking for a buyer. It’s unlikely that councils will step in directly

Local Government Chronicle has revealed that at least 25 top-tier councils have been forced to pick up the tab in major contracts held with Carillion: 

“Of the 25 councils with Carillion contracts, 11 were related to major civil engineering works, eight were for school meals and cleaning services, four were for library management, and the remaining two contracts relate to ICT and road gritting.

“Oxfordshire CC held the largest number of contracts, reportedly spending £136m on Carillion contracts over six financial years between 2011-12 and 2016-17.”

In fact, every contract (there are up to 450 of them, according to Open Opps) is going to have to be either brought in-house, or tendered out again.

Public bodies will be highly cautious about the latter now – particularly with Capita issuing a profit warning this week. Even Cabinet Office Minister David Liddington has said there will be no ‘rapid fire sale’ of re-municipalised services.

The question now is whether this marks a decisive turn against outsourcing and PFI – and whether these services stay in the public sector for the long run. 

Of course, we’ll have little way of knowing what works better as the government abolished the Audit Commission which monitored all this stuff…

Do you know of other examples of Carillion-run services being brought in-house? Get in touch – josiah.mortimer@leftfootforward.org

Josiah Mortimer is Editor of Left Foot Forward. Follow him on Twitter. 

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One Response to “Councils are ‘re-nationalising’ services after Carillion’s collapse”

  1. Das

    Abolishion of the audit commission should’ve told us that the private profitmaking Commercials were indeed more expensive AND less efficient than in house.
    There’s also less chance of in house going bankrupt and stealing the pension fund and paying dividends and bonuses for unescesary Investors.
    It’s like waking up from a long nightmare and the collapse of the Berlin wall all in one. Time to celebrate?

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