Private Sector v. Public Sector

[David Johnson]

As hilarious as watching Nick Buckles, the head of G4S was yesterday, at the parliamentary committee, there is a much bigger issue here.

For Thatcher there was no question that private sector was good, public sector bad. Private sector companies brought the efficiencies and competence that the public sector couldn't. So a huge range of public sector, nationalised industries were flogged off at bargain basement prices.

Blair and Brown used private companies quite a bit in the NHS and made a big use of the PFI partnerships with private companies that have generally turned out to be a financial disaster.

Cameron is just Thatcher in a suit with regard to the public sector. Huge contracts for public sector services are being placed with Virgin Care, G4S and Serco to revolutionise health, policing and social care.

One of the very few good things that has come out of the recent debacles with Barclays Bank (fiddling), HSBC (money laundering), A4E, back to work services (fraud), G4S security (give the impression that they couldnt find their way home of an evening), Serco, health care (failure legally to meet their health contract requirements) is that it has dealt a huge blow to outsourcing as a concept.

Dont get me wrong, I can see nothing wrong in using the private sector to help with peaks and troughs of demand e.g. winter flu epidemic and extra beds are needed, project needs influx of people for a short time etc etc. And the public sector has its cockups and disasters too, like the Staffordshire hospital where patients were left to die.

However it seems crazy to hand over day to day bread and butter public sector services to the private sector.

Why?

1. Private companies' sole responsibility is to maximise profit.
2. There is no transparency for commercial sensitivity reasons so the public never know what the cost base is for these private companies that are ripping us off. At least with the public sector, everything is measurable and potentially transparent, cost wise.
3. Political corruption. For example, John Reid, the former Labour Home Secretary walked into a lucrative consultancy contract with G4S when he left the government. That stinks and there are many other examples across all parties.

I suspect the Tories are a lost cause on this. It is in their DNA to cut public sector workers and privatise nationalised industries. Whether Miliband can roll back the steps made in privatisation under Blair and Brown, is to be seen. It is encouraging that Maria Eagle, the Shadow Cabinet member for Transport is looking at a report highlighting the benefits of rail nationalisation.

WHat is beyond question is that taking on extreme capitalism in the form of Barclays, Serco, G4S, A4E etc etc is the main political game in town. Whether any of the political parties are up for it is another question.

[Porn Baron]

It seemed to me that Mr Buckle would have jumped off a cliff if asked by a member of that commitee.

I can't understand why G4$ and the government are surprised that some people would not turn up? They were not on a retainer and were probably offered better full time jobs elsewhere?

Surely now the government will not use private companies to run police services?

Why do they need so many security staff anyway? I think it's to stop people taking their own sandwiches and drinks into the events. The sponcers want to sell them their crap. Mcdonalds and Coke I expect?

[David Johnson]

"I can't understand why G4$ and the government are surprised that some people would not turn up? They were not on a retainer and were probably offered better full time jobs elsewhere?"

Basically many of them were day labourers, hanging round to see if they were required for a particular day or not. As a result if they were on benefits they probably thought better of it given there was no commitment from G4S. Alternatively if they got a full time summer job they would obviously take that, I guess.

"Surely now the government will not use private companies to run police services?"

Well G4S are already running back office services for at least one police force.

"Why do they need so many security staff anyway? I think it's to stop people taking their own sandwiches and drinks into the events. The sponcers want to sell them their crap. Mcdonalds and Coke I expect?"

Damned if they do. Damned if they dont

[steveb]

Security is often a bit of an illusion. Very few people want to put up with the kind of intrusion and delays that would accompany total security because what that actually means is a police state.

Draft in some ex-Stasi officers from (the former) East Germany? Not bloody likely.

In this case though it's just a old fashioned cock up. Laziness, guesswork, complacency and a lack of oversight leading to a last minute scramble and red faces all round.

But the resignations/firings can happen later, what matters now is some real security to put off the nutters out there who may be looking at these reports and thinking they've got a chance to do some serious damage.

[jimslip]

When you see the laxity and incompetence of G4S recruiting so called, "Security" people it would be very easy for a nutter to infiltrate their crap systems. You'd think so called security experts would realise where the real threats lie. It is not from low flying aircraft, being flown by crazed, Muslims with hooks, screaming, "DEATH TO EVERYBODY!" but from suicide bombers/assassins infiltrating and/ or impersonating security personel.

The British army taking over is probably the best outcome and even better that G4S is having to foot the bill. It also give the lads and lasses a break from some bleak barracks in Germany and places them instead in the biggest and liveliest city in the World for a couple of months!

Bet they had no problem recruiting volunteers!!party!

[Porn Baron]

Do you mean Doctor John Reid?

ONE particular minister seems to be involved in all the cock ups - G4S, Immigration etc. !disaster!

[Essex Lad]

This is, I think relevant, to your point so i hope you won't accuse me of hijacking your thread.

I believe that Mrs Thatcher's selling off of public utilities was a scandal and would like to see them returned to public ownership especially the railways.

So here is my question: when something is paid for out of the public purse how do you incentivise the workforce to do the job properly? Take, for example, the railways. We/the government own the railways so we know the bills will be paid so what is to stop some trade union leader, bolshy or otherwise, from stopping the trains running on some feeble excuse - five minutes longer lunch break or everybody out? Whereas the private ones can say okay unless you do this we will close this station and put you all out of work.

Take Wembley - built, I believe, by the same firm that constructed the Emirates. Difference is - Wembley used public money and went vastly over budget and over time while the Emirates was built under budget and on time. Wembley had to be built whereas Arsenal could have gone elsewhere and paid a different firm.

How do you incentivise public workers to get the job done properly when they know that whatever delays they incur (some deliberate and some no doubt accidental), the job has to be done and the bills will be paid?

[Arginald Valleywater]

Obviously DJ you have sweet fa knowledge about project management. EVERY major project has slippage and problems as human beings are involved. As far as I can see most things are on time, working well etc. I am sure every other Olympics has run with a few bits of sticking tape and prayers.

[David Johnson]

You are wrong.

First, I have worked as a project manager for a number of years. I know about slippage and how to deal with it from a contractual and resourcing point of view. I was also involved in writing contracts for people-intensive work.

Secondly re. your comment "every project has slippage and problems as human beings are involved", if you are referring to the G4S debacle, Buckles admitted that it had been "a humiliating shambles" for G4S.

Despite having had a contract for years, Buckles found out about the problems on July 3rd. The result of this "humiliating shambles" was that 3,500 troops have had to be drafted in two weeks before the start of the Olympics.

These problems have continued to impact on the police. Several hundred police have had to have been taken away at the last minute to do security jobs on sites throughout the country where G4S staff have not turned up.

ANd despite this "humiliating shambles", Buckles stated that G4S intend to keep the ?57 million pound "management" fee.


This is totally unacceptable....obviously!

[David Johnson]

"Take, for example, the railways. We/the government own the railways so we know the bills will be paid so what is to stop some trade union leader, bolshy or otherwise, from stopping the trains running on some feeble excuse - five minutes longer lunch break or everybody out? Whereas the private ones can say okay unless you do this we will close this station and put you all out of work."

Easier said than done, I think you can incentivise public sector workers in the same way as private sector workers e.g. a bonus for performance on target. So in the example of the railways you can set targets for:

1. attendance.
2. train punctuality
3. train breakdowns etc etc

and provide financial incentives based on meeting or being close to these targets. Then there is a clear financial incentive in difficult economic times for so many, to deliver a good job which will get the members to override some of the rather meaningless argy bargy that happens.

"Take Wembley - built, I believe, by the same firm that constructed the Emirates. Difference is - Wembley used public money and went vastly over budget and over time while the Emirates was built under budget and on time. Wembley had to be built whereas Arsenal could have gone elsewhere and paid a different firm."

I suspect these discrepancies are often down to the crap job done by public sector contracts and due diligence people. For example, construction firms will be past masters at putting in all sorts of clauses such as if A happens we will have to charge you B above the standard contract price etc etc. And as a result the private construction company gets a license to print money and drag out the contract for ever and a day. Personally what I think should be done, if it isn't already done is to get some contractual hotshots from various industry sector private companies and get them working in the public sector to try and tighten this stuff up.

On a separate issue of cost to the public purse which is your underlying point here, it is worth keeping in mind.

1. Quite often private sector contractors get contracts based on price. Clearly price does not necessarily equate to quality nor good worker conditions.
2. If a contract is won because the workers are being paid at or just above the minimum wage, you can bet that many on the workforce will receive tax credits, housing benefits etc etc to help with the low wage. So is this a real saving to the state overall?