Privatisation of Ministry of Defence (MoD) firefighters has for now been suspended after Serco, the outsourcing firm that lost out on the private contract to Capita, launched legal proceedings against the decision to award its rival.
The news comes a month after the disgraced Capita – which has been involved in a series of outsourcing failures – won the MoD Defence and Fire Rescue Services (DFRS) contract despite being rated 10 out of 10 for financial risk by an independent financial analyst advising the MoD itself .
Serco, which scored 8 out of 10 in the same financial risk assessment, said this week (July 23) it would be challenging the decision to award the contract to Capita, and the MoD confirmed that it received notification of legal challenge and so would be suspending the contract award.
Unite has long campaigned against the privatisation of the DFRS, an outsourcing project that has been running for nearly a decade. It was paused in 2015 after the Treasury lost confidence in the bidders vying for the contract then.
In the latest chapter of attempted privatisation, MPs on the influential defence select committee sided with Unite in May as they wrote to the defence minister Gavin Williamson expressing grave doubts over outsourcing DFRS.
The contract bidding went ahead regardless and after the award was announced in June, MPs slammed the government during an urgent question debate for its negligence in handing over the contract to a company that was financially unstable, just months after Carillion’s spectacular collapse.
Labour MP for Leeds North East Fabian Hamilton, who put forward the urgent question, said, “Is it not time to accept that this government’s ideologically driven approach to outsourcing public services at any cost has simply failed?”
During the debate, Labour MP for Stoke-on-Trent North Ruth Smeeth highlighted that the testing and maintenance of fire extinguishers was not included in the scope of the contract, adding, “Capita does nothing for nothing, so this will not save money.”
Unite DFRS national branch chair David Kirby said that excluding fire extinguisher work from the contract is no minor oversight – it represents a major component of DFRS work and could add tens of millions of pounds to a contract that’s said to be worth £550m over 12 years.
“Fire extinguisher maintenance and testing is one of many tasks that DFRS undertake in-house as part of the job,” Kirby said. “There are thousands upon thousands of fire extinguishers across MoD sites in the UK and overseas. The defence minister Tobias Ellwood confirmed only just last week that this work isn’t included in the contract.
“This raises the question, if such fundamental work is excluded – these are basic contract requirements here — what else is missing from the contract?”
“It’s quite apparent the minister is unaware of the work DFRS performs,” Kirby added. “How can the taxpayer trust the information on this project?”
He highlighted that along with fire extinguisher work, hydrant testing, fire alarm testing, and emergency lighting testing are other in-house jobs that DFRS workers undertake ‘for free’ on good will, which, if not within the scope of Capita’s contract would have to be taken on by a separate contract or at extra cost to the original contract.
This could again add tens of millions more to the estimated cost of Capita’s contract – and would in effect allow the outsourcing firm to profit even more, while the taxpayer foots the bill.
Kirby pointed out too the ‘gifts’ Capita is being given as part of the contract that the taxpayer will have to pay for, including a fire simulator from a DFRS training centre, worth £2m, free use and control of RAF military firefighters, free use of fire station buildings equipment, as well as fire vehicles, among other giveaways.
“So much for ‘efficiency savings,’” Kirby said. “The people overseeing the awarding of the contract are supposed to be experts – how have they overlooked such basic but vital details?”
Indeed, Capita already has a chequered history of failing to deliver savings. The company repeatedly missed savings targets on an MoD recruitment contract – it delivered only £2.37m in savings in six years, well below government estimates of £104.3m.
In the process, the only ‘value’ it delivered was IT glitches and application delays, causing thousands of would-be soldiers to drop out of the application process altogether at a time when the army is facing shortages of new recruits.
“We must remember too that Capita was recently stripped of an MoD Estates contract,” Kirby pointed out. “This makes the DFRS decision all the more unbelievable.”
‘Pull the plug’
“It is obvious that ‘savings to the taxpayer’ is being used as a ruse to slash vital jobs and cut pay, terms and conditions, while handsomely rewarding bloated, incompetently run private firms at the taxpayers’ expense,” he added. “It is ideological privatisation run rampant, and it has got to stop.”
Unite national officer for the MoD Jim Kennedy agreed.
“This expensive saga has been dragging on for at least nine years and already cost the hard-pressed taxpayer millions of pounds,” he said. “Privatisation of these services at MoD bases raises serious concerns for national security and the safety of Defence assets & people.
“The government should not merely suspend the privatisation, it should fully pull the plug on this fractured and flawed exercise.”