Serco, the giant outsourcing company, which runs everything in the UK from ferries to prisons, railways to civil-service payrolls, is in turmoil. After 25 years of extraordinary growth, the company that has become ubiquitous in British public life, delivering services for the Government in hospitals, Army bases and job centres, is threatening to come unstuck. Serco (slogan: “Bringing Service To Life”) is the subject of seven separate investigations into the way it has carried out Government contracts. The most serious, a criminal inquiry run by the Serious Fraud Office, is looking into allegations that Serco and G4S, another outsourcing giant, overcharged the Government by up to £50m for its handling of electronically tagged prisoners, some of whom were later revealed to be deceased, living abroad or non-existent. Half of Serco’s revenues – £2.4bn – come from outsourcing for the Government. It employs 47,000 people. The rash of inquiries makes it unable to bid for further work. The potential loss of trust goes to the heart of Serco’s business model, threatening its lucrative work overseas as well.
The problem is that the British government, hell bent on “saving” money and reducing taxes on the rich, has gotten itself into a situation where it is dependent on this and a few other contractors. The National Audit Office warned last month that the Big Four were now so entwined with some departments – the MOD plans to outsource 40% of its entire budget by 2015; last year it awarded £611m to Serco – that the country couldn’t survive without them. In short, if Serco were to fail – like the banks – it would have to be bailed out.” The Week)
The irresponsibility of giving some much business of mind-boggling diversity, to a handful of companies like Serco defies belief. These companies are good at getting contracts and lousy at fulfilling them. Their use is purely party/ideological – and truly dumb. The people doing the work are the former government workers, made redundant and now paid less, now doing the work of two or three people at less pay and giving a worse service than before.
Epicurus had nothing to say about government out-sourcing, but he did have something to say about asking people to take account of the happiness and welfare of others, because if you are purely selfish, rule on behalf of a small clique of wealthy individuals and care little about your subjects – or constituents – then in due course the body politic ceases to work, and the state as constituted disintegrates.
The NHS in Cornwall chose Serco to run its out-of-hours GP service in 2006 when it undercut a local doctors’ group by £1.4m a year – an 18% saving. But “Serco Health” in Cornwall soon became controversial. This summer, the House of Commons Public Accounts Committee found it had doctored its data 252 times to show that it was providing a better service than it was. At times, there were up to 90 patients on hold, waiting to speak to a nurse, and a whistle-blowing GP said that he believed he was the only doctor on duty for the entire county. In 2010, a six-year-old Cornish boy died of a burst appendix when the Serco out-of-hours service advised putting him to bed rather than sending a GP to examine him. “Cost-cutting had left the service with insufficient transport and staff,” The Guardian reported. The contract was renewed for another five years in 2012.