It has been five years since the collapse of outsourcing giant Carillion. At the height of its operation, this huge company held around 450 separate public sector contracts, varying from schools and hospitals, to prisons and to transport. Just before its liquidation, however, it had racked up £1.5bn in debts.
Carillion’s implosion exposed the ‘efficiency of the market’ to be a complete myth; demonstrating the false promises of outsourcing and privatisation peddled by Tory and Labour governments alike.
As has been shown on countless occasions in recent years, the only thing that the market is efficient at is turning a profit for the billionaires and bosses, at the expense of the working class.
In 2020, the government’s test-and-trace programme, touted by the Tories as “world beating”, was handed over to outsourcing leviathan Serco for the tidy sum of £22 billion. Despite delivering an infamously ineffective system, the company’s shareholders accrued a profit of around £160 million.
Similarly, the pandemic saw hundreds of millions of taxpayers’ money spent on PPE and testing kits. In many cases, these contracts were awarded to private companies with little-to-no experience in the field, including firms belonging to various chums of leading Tories.
Another outsourcing disaster was displayed during the pandemic with the Chartwells food parcels scandal. At the cost of £30 per recipient, children who usually benefit from free school meals were delivered a meagre collection of basic goods worth just £5.
Thanks to these dubious practices, Chartwells, a subsidiary of the Compass Group, rakes in tens of billions in profit each year.
The fact that Chartwells is infamous for poor service, most notably with its involvement in the horse meat scandal, was seemingly smoothed over by the fact that the company’s CEO was a major donor to the Tory Party.
But such corruption and calamity wasn’t exclusive to the pandemic. In 2018, for example, Capita, a consultancy firm handling certain NHS services, was found to have lost 50,000 letters containing cancer test results. Private sector efficiency indeed!
Logic of capitalism
Despite these perennial failures, outsourcing remains common within Britain’s public services.
The class connections between the Tories and the private firms awarded lucrative contracts are a factor in this. For instance, Indian firm Infosys – a company in which Rishi Sunak’s family are major shareholders – has more than $120 million in UK government contracts.
But cronyism does not explain the whole picture. Above all, this scourge of outsourcing is the logical product of capitalism.
On the one hand, privatisation and outsourcing thrive upon the scorched earth of austerity, which the Tories are implementing at the behest of the bankers and bosses.
At the same time, in their insatiable search for profit, these parasites are leeching off the public purse; turning healthcare, social care, and other vital services into cash cows.
This is why both the Tories and Starmer’s Labour are calling on the private sector to play a leading role in reducing NHS waiting lists – no doubt a means of introducing further privatisation through the backdoor.
Last year, outsourced Serco workers in three London hospitals – organised by Unite – won a major victory, winning their demand to have their jobs brought back in-house.
Since then, there has been an explosion across the trade unions, with vast swathes of the working class being drawn into strike action.
These hospital workers have shown the way forward. The labour movement should fight to reverse all outsourcing and privatisation, bringing services and jobs back under public ownership and democratic control.
This means nationalising the monopolies like Serco, without compensation, and running these companies on the basis of need, not profit.
Instead of austerity and privatisation, as demanded by the crisis-ridden capitalist system, we must fight to expropriate the billionaires and transform society along on socialist lines. Only in this way can we provide high-quality public services for all.