Padraig Colman

Rambling ruminations of an Irishman in Sri Lanka

Tag: outsourcing

Fighting Them on the Beaches

This article appeared in Ceylon Today on April 5 2018

http://www.ceylontoday.lk/news-search/padraig%20colman/print-more/2103

It is reasonable to argue that, in order to grow and prosper and to be secure, a nation needs to have control over its infrastructure. Who could argue against the view that British railways, roads, water, electricity, telecoms, airports, ports, broadcasting, financial institutions should be British-owned or UK Government owned.

In pursuit of the voodoo economics of privatization the great and the good who steer the good ship Britannica, Labour as well as Conservative, have contrived a situation in which British citizens depend on Russia to heat their homes while that nation’s leader is poisoning people in Salisbury and Russian oligarchs are making it impossible for ordinary Londoners to afford homes.

Energy

Many years after UK State energy market was privatized, much of the industry remains in State ownership. The thing is that it is owned by foreign States not Britain. EDF Energy one of the largest distribution network operators in the UK after taking control of the UK nuclear generator, British Energy. It is owned by the French State. Power is owned by Innogy SE, a subsidiary of the German company RWE. Scottish Power is a subsidiary of Spanish utility company Iberdrola. E.on (formerly Powergen) has its HQ in Dusseldorf.

About 60 per cent of the UK energy supply comes from foreign countries including Russia, Norway, Qatar, Sweden and the Netherlands. Around 60 per cent of the UK’s natural gas imports come from Norway, and 30 per cent of it comes from Qatar. Around half of the UK’s crude oil imports come from Norway, and just over 30 per cent comes from OPEC.

Water

Few other EU States opened their vital services to foreign competition the way Britain did. Most of the water that Britons use to make their tea or flush away their excretions is controlled by foreign companies. After the UK water industry was privatized in 1989, several new companies were formed and many were sold off. There are now 12 water companies, out of the 23 in the UK, which have foreign owners. Thames Water was bought by a consortium which included the Australian investment group Macquarie and a Chinese wealth fund. Yorkshire Water was acquired by a consortium including Citigroup, HSBC, and the Singaporean sovereign wealth fund GIC. Northumbria Water was bought by the Hong Kong-based company Cheung Kong Infrastructure Holdings.

Transport

It would be impossible to take a rail journey anywhere in the UK without putting money into the pockets of foreign shareholders. Chiltern, Cross Country, Wales & Borders, London Overground and Grand Central services are run by Arriva, which is owned by the German company Deutsche Bahn. MTR shares the South West Trains franchise with a British company First Group plc. MTR will also run Crossrail. Hong Kong State owns MTR.Trenitalia, an Italian company, runs Essex Thameside. The French State firm SNCF owns Keolis, which runs numerous franchises in joint ventures. SNCF, as part of Govia, operates Thameslink, Great Northern, Southern, Southeastern and London Midland and with Amey it runs the Docklands Light Railway. Scot Rail and Greater Anglia, and Merseyrail are run by Abellio, which is owned by the Dutch State.

Ports

Transport Minister Chris Grayling visited Felixstowe and proudly boasted of Britain’s history as a “great global trading nation”. An empty boast because, as Private Eye pointed out, Britain’s ports are owned by “a medley of foreign governments, billionaires and tax-avoiding conglomerates”.

Felixstowe is owned and run by a Chinese conglomerate listed on the Hong Kong stock exchange and incorporated in the Cayman Islands. Southampton and London Gateway are run by a UAE Government conglomerate called Dubai World controlled by Dubai’s ruler. In 2013, a Judge ruled that the company had used “an elaborate trick” to avoid paying £14 million in UK income tax.

Liverpool, Glasgow and Great Yarmouth are run by Peel Ports which is jointly owned by Deutsche Bank. In 2013 the Parliamentary Public Accounts Committee accused the company of tax-dodging. Associated British Ports is established in Jersey to avoid taxes and is owned by Singapore’s foreign reserve fund and Kuwait’s sovereign wealth fund.
The rhetoric of many Brexiteers was that the UK had to get out of the EU to restore national pride. A similar mindset persuaded Americans to vote for Trump to make America great again. Unfortunately, this is an untenable viewpoint in a globalized world. It is particularly ludicrous in the UK where the very people who called for the UK to be freed of the shackles of Brussels were selling off the nation’s assets for a mess of pottage – well, a mess of something and an expensive one at that.

How ‘Capita’ Became ‘Crapita’

This article appeared in Ceylon Today on March 15 2018

http://www.ceylontoday.lk/news-search/padraig%20colman/print-more/580

Rod Aldridge, or Sir Rodney Malcolm Aldridge OBE, FRSA, to give him his full title, worked in local government for ten years, employed by the Chartered Institute of Public Finance Accountants. For CIPFA, Aldridge ran a company specialising in helping local councils run their computers.

Aldridge bought the company and called it Capita. Since it was founded, as a two-man consultancy firm in 1984, Capita has grown to become the UK Government’s favoured company for outsourcing of public services. In 1987, it became an independent company with 33 staff and now has 36,000 workers based at more than 300 sites, predominantly in the UK and Ireland, and has also extended its operations to India. If the Sri Lankan Government has any plans to use Capita, read this article carefully and heed Mahinda Rajapaksa’s advice about privatisation and public private finance initiatives.

In March 2006, Aldridge resigned as Executive Chairman following allegations that contracts awarded to Capita were influenced by his loan of £1 million to the Labour Party. Aldridge is now reputedly worth £110m. He was replaced by his long-time associate Paul Pindar, who has complained about being called a ‘fat cat’. Pindar received a paltry £770,000 per annum salary and was reduced driving around in an Aston Martin DB9. The average Capita employee salary at the time was £28,000 per year.

Jack of All Trades

Capita’s influence spread malevolently throughout what used to be the public sector – health, education, prisons, health assessments for benefits, administration of benefit and pension payments. The House of Commons Work and Pensions Select Committee received nearly 4,000 submissions – the most ever by a select committee inquiry – after calling for evidence on the assessments for personal independence payment (PIP) and Employment and Support Allowance (ESA).

People with Down’s syndrome were asked by Capita representatives when they ‘caught’ it. A woman reporting frequent suicidal thoughts was asked why she had not yet killed herself. Relevant information was often omitted from, and fundamental errors included in, the medical assessment reports. One report said the subject was fit enough to walk her dog every day even though she did not have a dog. Civil servants had to be drafted in to help Capita out because waiting times were so long that in some cases people with terminal conditions died before receiving a penny. Atos and Capita were paid over £500m from tax payers’ money for assessing fitness to work but 61 per cent who appealed against failed claims won their appeals.

Insensitivity

Capita has demonstrated similar incompetence and insensitivity in other areas in which it operates. Capita’s education arm sent a truancy notice to a pupil who had died two months before. While administering housing benefit for Lambeth Council, Capita wrote to a man telling him he no longer qualified for benefits because he was dead. Tens of thousands of unprocessed claims left many Lambeth families in danger of eviction.

In August 2016, a survey of General Practitioners found 85 per cent were missing records of recently registered patients, 65 per cent had experienced shortages of clinical supplies or delays in deliveries, and 32 per cent had suffered from missed or delayed payments.

In June 2014, it was reported that at least five of eight Liverpool National Health Service Trusts which had contracted their payroll and recruitment to Capita in 2012 were withdrawing because of concerns about the quality of the service provided.

The Great Training Robbery

Capita was guilty of maladministration in the Government’s £290m flagship training support scheme, the Individual Learning Accounts (ILA) which was implemented in 2000 and abruptly ended in 2001.Computer disks containing account holder names and PINs circulated on the black market. People were still being prosecuted for fraud as late as seven years after the ILA debacle.

On 31 January 2018, Capita announced a profit warning and dividend suspension as net debts were predicted to hit £1.15bn and a pension deficit to  reach £381m. The announcement knocked 47 per cent off Capita’s shares, reducing its market value by over £1.1bn.  In handing public service provision over to the robber barons, the Government sacked hundreds of thousands of civil servants. Brexit will close the door on foreign labour. Who will provide public services in the UK in the future?

 

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