Carillion’s collapse should have served as a loud and clear warning against the dangers of privatisation, but as Ministry of Defence (MoD) firefighters now face being outsourced, the government has acted as if the firm’s demise never happened.
The companies now bidding for the contract to run the Defence Fire and Rescue Service (DFRS) branch are outsourcing giants Capita and Serco – and both, like Carillion, have issued profit warnings in recent years.
In January, just two weeks after Carillion’s collapse halted major public projects and left 20,000 workers in limbo over their future, Capita shares collapsed by nearly 50 per cent, wiping more than £1bn off the company’s stock market value. Serco’s profits tumbled last year by 31 per cent after a series of profit warnings.
Both firms are now undergoing restructuring but their track record running public sector contracts will ring alarm bells for the between 1,500 and 2,000 defence and firefighter workers who will be affected by the privatisation plans.
In 2013, Serco was under investigation by the Serious Fraud Office (SFO) after it emerged the outsourcing company was overcharging the government for the electronic tracking of criminals, some of whom were dead or behind bars. After the scandal, Serco was barred from bidding for government contracts for a period of time.
Just last September, Capita was stripped of a 10-year contract due to end in 2024 for running the MoD’s military estate after a warning from the National Audit Office (NAO). In January, the MoD announced it would not renew Capita’s contract for its Defence Business Services, instead opting to take them back in-house.
And at the end of last year, the long-delayed MoD online recruitment service run by Capita – which took five years to finally go live – was riddled with bugs when it launched in December.
Unite has argued that the stakes are far too high as MoD firefighter and defence workers stand on the precipice of privatisation –the workforce provides a round the clock service seven days a week, monitoring and protecting all the MoD’s sites, which include nuclear submarine bases, airfields and ammunition and munition facilities. The buildings alone are worth in excess of £100bn.
The contract was due to be awarded in March but has now without explanation the deadline for bidding has been extended until May.
At a public sector pay rally in Parliament last night (March 7) Unite assistant general secretary Gail Cartmail highlighted the DFRS contract which she said cannot be flogged to the private sector especially in the wake of Carillion’s collapse.
“The appalling [Carillion] debacle has left thousands jobless, vital construction projects mothballed and 30,000 organisations in the supply chain high and dry – we say Carillion’s business model is broken and we are not out the woods yet by a long chalk,” she said.
“Carillion’s business model is like Humpty Dumpty; broken into pieces and all the efforts by right-wing ideologues to put that model together again will result in failure.
“So why should hardworking and dedicated firefighters be subjected to such a fractured and flawed privatisation process and all the concerns that this poses for national security at military bases?”
Cartmail pointed out earlier this year that the firefighters “undertake absolutely essential work in protecting MoD buildings, equipment and munitions and the prospect that these workers could swiftly find themselves in the same position as Carillion workers on outsourced public sector contracts, does not bear contemplating.
“This is a contract which should never ever have been considered, let alone tendered,” she added.
“The primary motive of private companies is to make profits. This can only be achieved on this contract by cutting personnel, pay, workers’ conditions or reducing the level of cover for MoD sites. All of these options are entirely unacceptable.
“Rather than outsourcing essential public services the government should be bringing all its outsourced contracts back in house.”