UNISON backs public services provided by public sector workers under democratic
public control and ownership.
This page presents details of just some of the failures of privatisation and is dedicated to public sector workers everywhere and the dynamic, innovative work that they do. We hope it will help to present the case against future privatisations. Please let us know if you have any more examples we can add. You can find out more about the Positively Public campaign on UNISON's Positively Public campaign page. You can also find out more by downloading the UNISON Positively Public Manifesto.
This page has become enormous because of the sheer number of reported problems with 'outsourcing', but we have avoided splitting it into smaller pages in the hope that it will be ranked highly by search engines. To make it easier to find your way, use the 'Find' function (Apple-F on a Mac, Ctrl-F on Windows) to search for a particular contractor or service.
Tube sell-off blamed for blackout
"The government's part-privatisation of the London Underground was blamed last night for exacerbating a massive power failure which blacked out large parts of the capital and brought the transport network to a halt. " [the Guardian, 229 August 2003]
Capita loses Bromley housing benefits for poor performance
Capita has lost the contract for Bromley housing benefits. The
shortly to be taken over by CSL from Capita. Over a million pound extra has had to be put
into this contract for 2002/3 to ensure that the performance of the contractor is up to scratch.
Charges for domiciliary care will also go up to raise an extra £400,000 towards the cost of this
"the Citizens Advice Bureaux [...] resources are stretched to the limit dealing with housing benefit enquiries created by the Tory privatisation at all costs attitude in the early 1990's without thinking of the long term consequences." "Labour leader, Peter Fookes moved a motion calling for an end to the chaos provided by the current contractor for housing benefit; Capita. This was seconded by fellow Penge Councillor; Karen Roberts. Many elderly and vulnerable tenants have been threatened with eviction by their housing association/private landlord as a result of failure on the part of the contractor. Some residents may also face court costs through no fault of their own. The Borough Treasurer; Paul Dale advised the meeting that as part of the review of the service a new specification had been drawn up with tighter performance levels and targets. A new contract has been awarded to CSL, which starts in April. The motion was unopposed by the Tories who had got us into this mess in the first place by privatising the service on the cheap and without adequate safeguards for rectifying poor performance. The new contract will cost an extra £1.5 million a year." [ Bromley Labour Group News November-December 2002]
The Benefit Fraud Inspectorate said "The Bromley site is considered by Capita to be a flagship site and is used as a reference site by the company." [BFI report, September 2001]
"Rod Aldridge, Chairman and Chief Executive of Capita Group plc, is one of the 300 richest people in the country with an estimated fortune of £97m. His Capita salary is about £370,000 a year. Last year he collected £1.9million in shares and bonuses. Although not a big Labour Party donor, Aldridge does attend fundraising dinners and advises the Government on outsourcing. In 1997, Capita's sales were £173m and pre-tax profits £18m. Last year they were £691m and £53m respectively." [Unison Companies Update, October 2002]
Capita also lost its £48m contract to run Lambeth benefits last year [Lambeth cuts short £48m Capita deal, the Guardian,Monday July 2, 2001].
Capita's Criminal Record
The Criminal Records Bureau, run by the notorious Capita, faces further problems as the National Audit Office prepares to launch an investigation. the CRB is "struggling to cope with a backlog of almost 100,000 applications. [...] An action plan was put in place a month ago postponing checks on 300,000 carers, agency nurses and school governors because it was being overwhelmed. A lot of its work of transferring handwritten applications on to computer disks has had to be subcontracted to a firm in Madras. " [Probation officers left off vetting list, the Guardian, December 28th 2002] Public services and the vulnerable clients who depend on them need the background checks to ensure the high standards of public sector workers. Earlier in the year, the bureau caused delays to new teachers starting in schools as their background checks could not be completed in time. "Lord Falconer, Home Office minister has threatened Capita with legal action over the poor performance of the Criminal Records Bureau." [Unison Companies Update, August 2002]
Argyll and Bute Council Keep Services In-House
"UNISON Scotland has welcomed the decision by Argyll & Bute Council to retain services in-house and not to privatise non-core services. UNISON had called on the council to reject proposals by troubled contractor Amey, who had been asked by the council to report on the running of council services. Matt Smith, UNISON's Scottish secretary, said: 'Amey have a track record of trying to take over public services. They are one of the firms who privatised our Trunk Road Maintenance and refused to provide fair pensions for staff. They are part of the consortium involved in the much-criticised Glasgow Schools PFI and have recently been sent packing from Redcar and Cleveland Council after proposing a similar scheme to the one they advanced in Argyll & Bute.'" [http://www.unison.org.uk/news/news_view.asp?did=558]
Individual Learning Accounts
The Individual Learning Accounts scheme was designed to assist adult education but collapsed amid rampant fraud. It was run by none other than the notorious Capita. "The Whitehall investigation into the failure of the Individual Learning Accounts (ILA) system, which was set up and administered by Capita, could take another two years to complete to allow time to assess the full scale of fraud committed against the system. The National Audit Office reported that the £273m scheme had not been planned adequately, while the contract with Capita to administer it was 'deeply flawed' and lacked proper security measures. As a result, Capita would receive 'quite a bit less' than the agreed £55m fee." [http://www.unison.org.uk/bargaining/doc_view.asp?did=618]
Failing Rail Company Gets Huge State Handout
Having denied a decent pay rise to firefighters, the government gives £58m to a private rail company because... they're not efficient enough. From FBU strike bulletin 20, 12/12/2002:
"£58M TO SPARE FOR PRIVATE RAIL The government, which has already poured billions of taxpayers money in the pockets of private shareholders and fat cat bosses of the disastrous privatised railways, has given a further £58 million to failing private rail firm Connex South Eastern. The train operator's service has been deteriorating along with punctuality. The government claims it had to spend this amount to prevent the French owners pulling out of the lossmaking privatised rail franchise. Train drivers union ASLEF, who condemned the decision, points out that the firm has only been losing money recently and has been profiting for years at the expense of the taxpayer. And Blair can't spare any cash, except in return for better performance!"
Capita loses Independent Learning Accounts contract
Capita, who ran the £55m contract for the Independent Learning Accounts scheme, has been prevented from bidding for the new scheme after the original scheme collapsed "swallowing up tens of millions of pounds of taxpayers' money in fraud" [Whitehall chief tells MPs: I am ashamed The Guardian, November 5, 2002]
Capita: Criminal Records Bureau fiasco deepens
The Criminal Records Bureau has admitted that background checks on 300,000 workers in care homes are to be postponed. Checks on people working for nursing agencies have been abandoned altogether. The bureau has a backlog of 86,000 claims that take longer than the promised 3 weeks to process. The project is a £940,000,000 private finance initiative deal between Capita and the Home Office. [Criminal records crisis deepens, the Guardian, November 2, 2002]
Private Hospital Cleaning "Inadequate"
SODEXHO: "An investigation commissioned by the Scottish Executive into the salmonella outbreak that claimed three lives at Glasgow's Victoria Infirmary damned the cleaning contract Sodexho as 'inadequate.'" [Unison Companies Update, Nov. 2002]
Privatised Payroll Messes up Pay and Pensions
"IT blunders at WS Atkins resulted in failure to pay supply teachers and bungled pension payments for 350 teachers in Southwark." [Unison Companies Update, Nov. 2002]
Elderly People in Sheltered Housing Without Hot Water for 3 Months
"Elderly people living at Ashley Homes sheltered accommodation in Wimbledon are being forced to fill baths with kettles because they have been living without hot water for three months." [Unison Companies Update, Nov. 2002]
Private Contractor Leaves Asbestos in Schools
"Bovis Lend Lease was forced to carry out checks at Bradford schools after asbestos traces were left at one of the 44 schools covered in a £186m refurbishment programme. The investigation found asbestos at nine buildings previously given the all-clear, though the firm insisted that a trace was only found in isolated areas such as ceiling voids and no teaching areas were affected." [Unison Companies Update, Nov. 2002]
Private Contractor Works Cleaners 45h per Week
"Cleanaway refuse collectors at Trowbridge rejected a 2% pay rise and voted to strike in support of a 7.7% rise over two years. The 44 workers, who are paid between £5.13 and £5.47 an hour, are seeking the same rise as local authority workers. GMB union organiser Kevin Brandstatter said that although Cleanaway had agreed to cut working hours from 37 to 35 when it took over the contract in November, new starters are having to sign contracts for 45 hours a week at lower rates of pay." [Unison Companies Update, Nov. 2002]
Private Contractor "on Brink of Collapse"
"Wandsworth and Battersea TUC accused MRS Environmental Services of failing to meet new staffing and equipment targets. It said that the contract was "teetering on the brink of collapse" and called for the council to bring the street cleaning service back in-house." [Unison Companies Update, Nov. 2002]
Council Takes Street Cleaning Back In-House
"Teignbridge District Council brought the refuse collection and street cleansing services contract back in-house after the Onyx UK contract expired. As a result, 80 Onyx staff transferred to the authority." [Unison Companies Update, Nov. 2002]
PFI Buildings "Little Better Than Sheds"
'The government acknowledged that some PFI buildings have been badly designed and demanded that public-sector bodies must now appoint "design champions." The call came in the wake of a report by the Commission on Architecture and the Built Environment, which criticised standards and commented that school buildings in Wiltshire were "little better than agricultural sheds with windows." The auditor-general said that poor design was having "adverse consequences for value for money and service delivery."' [Unison Companies Update, Nov. 2002]
NHS Trust Takes Cleaning Service Back In-House
'West Suffolk NHS Trust has taken its cleaning service back into the NHS after seven years of failure under a privatised service. Patients complained that Medirest, the private company running the cleaning service, left the hospital filthy, with blood on the floor and scattered litter. Under Medirest, staff had limited annual leave and no sickness allowance. Vacancies went unfilled and there was a 10% sickness rate. Staff numbers were further reduced when employees had to cover for contract staff at Addenbrookes Hospital, following similar problems there. Staff morale was low, as the contract had passed through several companies' hands as conditions deteriorated. The 150 staff, mostly Unison members, are 'delighted' to be back in the NHS under decent terms and conditions. Unison regional officer Tony Jones said "This has proven that the private sector cannot operate properly within a public service [...] Their drive is for profit and there is no place for profit in a public service."' [Unison Companies Update, Nov. 2002]
Worst Housing Benefits Services Are All Privately Run
Statistics prove that the worst 5 housing benefits services in 2000-2001 were all run by private contractors. The worst private contractor was 42% worse than the worst in-house service, taking an astonishing 194 days average to clear a benefits claim [DTLR and SocietyGuardian Report]
Ministers answering questions in parliament have admitted that 100 percent of the written complaints they have received about housing benefits have been about private contractors [Hansard, 24 Apr 2001]. Unsurprisingly, leaping away at the head of the list is the notorious Capita, with 350 percent more complaints than the next worst contractor. Meanwhile, Capita boss, Paddy Doyle earns a cool £3,580,554 per year. [FTSE 100 directors paid more than £1m last year, The Guardian, Saturday October 5, 2002]
Vertex Makes a Mess of Ealing Housing Benefits
The company that is trying to take over Westminster Council service has shown a poor track record in Ealing. The service was 6th worst in the country in 2000-2001 [DTLR and SocietyGuardian Report] The Liberal democrat group said "If we don't see dramatic improvement in the service within 6 months of election we will sack Vertex." [Manifesto for Ealing, April 2002]. The Centre for Public Services said " The £2.6m contract was nearly £500,000 higher than the original estimate prepared by management consultants and in-house managers which was deemed unworkable by the trade unions. The Council decided to proceed with tendering without an in-house bid and achieved a mere £120,000 saving." [http://www.centre.public.org.uk/briefings/middlesbrough.html]. Even the Tory group on the council wants Vertex thrown out: "Ealing Conservative councillor Glenn Murphy has called for the 'beleaguered' contractors to be sacked. 'I don't have to look back too far to see how poor Vertex SW1 is,' he said." [Planning Online]
Accountants say Private funding is a bad deal
Accountants state that using public cash would be cheaper than paying private companies to provide public services. Only 1% of accountants surveyed strongly agreed that PFI gives value for money. [BBC news, Friday, 11 October, 2002]
Child Support Agency Bungle by Private Finance Initiative Company
The Child Support Agency faces further delays in getting its new computer system Supplied by American computer giant EDS. The Child Poverty Action Group said: "Every week's delay means that children in the poorest families receiving income support are losing up to £10 a week." [Computer bungle 'will hit the poor' The Guardian, Wednesday August 14, 2002].
WS Atkins betrays workers over pensions
"WS Atkins is pulling out of a commitment to keep transferred employees in the Local Government Pension Scheme. The London Borough of Merton has negotiated a PFI project for the facilities management of six secondary schools with NewSchools, a consortium led by WS Atkins. Up to 20 staff were to be transferred under TUPE on 2nd September. Despite nearly two years of negotiations, WS Atkins has reneged on the terms of the transfer because it could potentially cost it £40,000 per year during the term of the 25 year contract. WS Atkins had agreed to allow the TUPE'd staff to remain in the Local Government Pension Scheme, which was also the preferred option of the council and confirmed by the Cabinet in a report at the end of March 2002, where WS Atkins was granted Admitted Body Status." [UNISON Company Update October 2002]
Private care home faces human rights charge
"Seven whistleblowers have been given the go-ahead to take their case to the European Court of Human Rights. The care workers from Bromley highlighted a catalogue of ill-treatment at the £322-a-week BUPA care home in 1999." [UNISON Company Update October 2002]
Capita forces education workers to reapply for jobs
"In Haringey education services, Capita is reorganising and requiring all staff to re-apply for their own job. Others are waiting for redeployment. The option of an extension to the contract beyond August 2003 has been taken up, with a proposal for a further extension. The UNISON branch reports frustration at the amount of time taken by Capita to reorganise and recruit finance and personnel staff and fears that the time-lag may lead schools to purchase services from elsewhere. However, the Education Management Board, which governs the contract, is being broadened to include elected members in preparation for the return of the service in-house at the end of the contract." [UNISON Company Update October 2002]
Hospital porters and telephonists told to bring their own cleaning gear
"Medirest porters and switchboard operators at Kingston Hospital have been told that they must bring their own cleaning materials to work and clean their own departments. The UNISON branch has stated that the understaffing crisis at the heart of the announcement has been caused by the firm significantly under-pricing its bid for support services at the hospital. UNISON also says that it has been inundated with complaints from staff about errors on pay slips and delays by Medirest in honouring pay awards. One Medirest employee said that morale among staff was at an all time low. The man, who did not want to be named for fear of losing his job, said: 'It is getting beyond a joke. Medirest actually ran hotels, they are not experienced in working in hospitals. They have no idea how the job actually works.'" [UNISON Company Update October 2002]
Private exploitation in hospitals
"The Sunday Mirror has launched a campaign to raise the minimum wage to £5/hr. One of their examples is Rupert Daley, Cleaner - £220 a week, £4.28 an hour on 11-hour shifts, with no sick pay, for ISS Mediclean at Homerton Hospital, Hackney.
"Higher parking charges have been put in place at Walsgrave Hospital. Staff are being encouraged to park at the local cinema and catch shuttle buses to the hospital.
"In Swansea, hundreds of hospital cleaners, porters and telephonists took 24-hour strike action over pay and conditions. Employees of ISS Mediclean took action after management refused to consider the union's demand for the same terms and conditions for ISS staff as for those directly employed by Swansea NHS Trust." [UNISON Company Update October 2002]
Rentokil 'meanest employer'
"Rentokil Initial has been named the meanest employer in Britain by its staff paid at the minimum wage. It would cost the company less than 4% of its profits to raise their pay to £5 an hour. Rentokil showed pre-tax profits of £374.3m last year, while paying about 5,000 of its cleaners and security guards £4.10 an hour. Corell Steptoe, working on school meals for 19.5 hours a week for Initial Catering Services, reported taking home £77. Chairman Clive Thompson's pay package includes a salary of £1,047,000, a bonus of £419,000 and benefits of £77,000 including company car and medical insurance. He has generous share options as well. Sir Clive has been a leading campaigner against the minimum wage." [UNISON Company Update October 2002]
Contractor 'spread asbestos'
"Claims are being made that Serco, as a Hampshire council contractor, broke up sheets of asbestos on a site in Winchester. This is being investigated by the Environment Agency. The county council confirmed it had requested the work and that it was being investigated over a possible breach of section 34 of the 1990 Environmental Protection Act relating to 'duty of care'." [UNISON Company Update October 2002]
High sickness rates at Vertex
"The call centre run by Vertex Customer Management for Birmingham City Council to deal with enquiries on environmental services, neighbourhood advice and council tax is recording absentee levels of 9%, sharply above the council average." [UNISON Company Update October 2002]
Two thirds of privatised utilities broken up or sold abroad
"Two thirds of the more than 30 privatised utility companies no longer exist as quoted companies. Without state aid, British Energy would be the third to be effectively insolvent, after Railtrack and Hyder plc. BT had to raise funds through a £5bn rights issue, Scottish Power is not thriving, the remaining water and sewage companies have the lowest collective rating of any sector on the stock market and British Gas has largely broken up. About half the privatised utility businesses are now owned by French, German or American utility companies, mostly in electricity and water, while no world-scale British utility company has come forward. In the absence of a healthy British Energy, the only remaining big UK electricity generator, some analysts expect the industry to evolve into five vertically integrated groups, all of them foreign-owned." [UNISON Company Update October 2002]
Private care home to evict 50 frail elders
"Relatives attacked plans by Bellway Homes to demolish Headingley Nursing Centre where 50 elderly and frail patients currently live. Bellway wants to turn the centre, which is owned by ANS Contracting and Commissioning, into private residential flats." [UNISON Company Update October 2002]
PPP contract 'disrupts education'
"Pupils at Edinburgh's Royal High School are threatening to sue the local education authority over disruption to their studies caused by construction work for the £10m Edinburgh Schools Partnership PPP." [UNISON Company Update October 2002]
In-house IT services cheaper than private firm
"Newcastle City Council rejected a bid from BT and decided to keep a £250m IT services contract in-house. The in-house bid offered savings of £38m in running IT services for council tax, rent collection, payroll and computers for 11 years." [UNISON Company Update October 2002]
Contractor fails recycling service
"Onyx was accused of contributing to Wandsworth's failure to meet recycling targets by not meeting its duty to deliver fresh sacks daily for the 'Rainbow Sacks' recycling scheme." [UNISON Company Update October 2002]
Privatised companies take £billions of taxpayers' money abroad
"The Labour Government, once pledged to fight the erosion of Britain's tax revenues, has outlawed a number of tax loopholes in Jersey, Guernsey and Gibraltar. But now government agencies and private companies running public services are using off-shore locations to save money. Network Rail, London Underground and the Strategic Rail Authority, as well as Amey, Serco, Capita and WS Atkins, all funnel millions to Guernsey, where insurance costs less. Mapeley, a property company, which took over 700 buildings from the Inland Revenue and Customs & Excise, avoids paying millions of pounds of taxes each year by being registered in the British Virgin Islands. The result is that billions of pounds of investment in public services - hospitals, schools, roads and railways - is being channelled offshore."
The Association for Accountancy & Business Affairs, a pressure group made up of Labour MPs and tax experts, has argued it would be unnecessary to raise taxes from ordinary people if very large corporations were prevented from sending their profits offshore. [UNISON Company Update October 2002]
Blackpool takes all privatised services back into public ownership
"Blackpool Council now has no contracted out services. Following its Best Value Reviews, all services have been brought back in-house. The council is currently negotiating the transfer of Blackpool Zoo for redevelopment." [UNISON Company Update October 2002]
PFI bosses have snouts deep in the trough
"A Labour Research Department survey of 10 PFI contractors found that the average salaries for the highest-paid directors was £583,000 last year." [UNISON Company Update October 2002]
Capita: Criminal Records Bureau doubles time for teacher checks
"The criminal records bureau has been forced to double its target time to deal with applications from three to six weeks, the home secretary, David Blunkett, said yesterday." [Time doubled for checks on teachers, The Guardian, September 19 2002]
The Criminal Records Bureau had backlogs of 9,600 school staff just one day before the start of term. [Schools face closures in vetting chaos, The Guardian, September 2, 2002] As if this weren't enough, it is feared that over 10,000 students on care-related courses may not be able to start their courses until early next year due to delays in criminal record checks. [Capita punishment, The Guardian, September 10, 2002]
ITnet slammed for Islington benefits service
ITnet are being fined £40,000 a month for under performance in Islington's benefits service and there are suggestions the contract could be terminated or even run by Camden Council, according to a searingly critical editorial in a local paper. [Is the writing on the wall for ITNet?, Highbury and Islington Express, 27th September, 2002]
Accenture accused of escessive profit-taking
"Accenture denied receiving excessive profits while running the National Insurance Records System. Accenture had been criticised by the Commons public accounts committee for taking an estimated 54% margin on the project, which suffered several problems in its early years. Committee chairman Edward Leigh MP warned that there was a 'real danger' that no firm will bid against Accenture when the contract is renewed in 2004, as barriers for rivals may be insurmountable." [Unison Companies Update, September 2002]
Contractors fall out
"Amec has charged rival Amey with damaging the reputation of companies involved in PFI projects. Changes in Amey's method for accounting for bidding costs revealed a shortfall of £70m and it subsequently issued a statement that it would consider withdrawing from PFI bids due to their high costs. Amec believes that Amey's statements have frightened investors leading to stagnant or falling share values." [Unison Companies Update, September 2002]
Suspicious share dealing at Amey?
"On July 10, despite a 75% fall in Amey shares since the beginning of the year, seven of the firm's directors bought shares. In the following month, Amey shares rose by 35%, while the general market fell by 7%." [Unison Companies Update, September 2002]
Construction company suspected of betraying privatised staff
"Suspicions rose that Hampshire-based Raynesway Construction Southern (part of Balfour Beatty) is set to renege on an agreement to retain staff, four months after taking over services at North Yorkshire Council. Vehicle maintenance is conducted by Balfour Beatty Fleet Services, which has announced plans to close the Leeming Bar vehicle workshop and centralise operations in a new depot in Finkles Way, Northallerton, creating fears that 20% of the workforce will be cut." [Unison Companies Update, September 2002]
Privatised refuse service rubbished
"Kingshurst residents attacked standards of rubbish collection services provided by Solihull Council contractors Cleanaway, accusing the firm of creating a health hazard by leaving rotting sacks and failing to clear up waste that spills from bins." [Unison Companies Update, September 2002]
Refuse service cheats staff
"London Borough of Havering refuse collectors decided to ballot for strike action after rejecting a 3% pay offer from Cleanaway. T&G regional industrial organiser Paul Fawcett said: 'Our members in Havering are about £200 a week worse off than the refuse collectors employed directly by local councils.'" [Unison Companies Update, September 2002]
Child support agency repeats previous fiascos
"The Child Support Agency revealed that the PFI consortium involving US computer giant EDS is running over a year late and £50m over budget in supplying a £220m IT system. GMB general secretary John Edmonds said: 'I can't believe the government didn't learn from the DSS and passport fiascos and are now putting British families at risk. The government overrun on PFI IT projects has already topped £1bn.'" [Unison Companies Update, September 2002]
EDS accounts 'dodgy'?
"Investment Bank UBS Warburg cast doubt on EDS accounts by alleging that the firm has recorded excessively high profits on a £4.2bn deal with collapsed telecoms company WorldCom." [Unison Companies Update, September 2002]
Shares fall, workers on the scrapheap
"Fujitsu announced a further 2,100 job cuts, after axing 22,000 staff last year. Fujitsu's shares have lost about 37% of their value since January." [Unison Companies Update, September 2002]
Group 4 goof-up frees murder suspect
"A judge released a murder suspect on bail because Group Four was over two hours late in getting him to Bradford Crown Court on time for his trial. It took the security firm four hours to bring the defendant the 70 miles from Hull, where he was being held on remand, because he had been taken on a circuitous route transporting prisoners to other areas. Prosecuting barrister Jennifer Kershaw QC said that Group Four's area manager in Hull had refused to let the defendant be brought directly from Hull to Bradford. Judge McCallum said: 'We could have had him helicoptered here cheaper. It is ludicrous.'" [Unison Companies Update, September 2002]
Contractor fails to pay workers
"Hospital cleaners, porters and receptionists protested outside Swansea's Singleton Hospital when ISS Mediclean failed to pay wages on time. The payroll error affected many of the firm's 12,500 workers across the UK." [Unison Companies Update, September 2002]
Another hospital cleaning scandal
"ISS Mediclean porters, cleaners and telephonists at Swansea hospitals demanded a pay rise for the lowest paid staff from £4.10 to at least £4.62, as well as terms and conditions in line with NHS staff. Mediclean has come under attack for areas left unclean because of staff shortages and threatening to cut pay if staff are caught talking in the corridor. A staff member who suffered splashing of chemicals in her eyes was told the rest of her pay would be stopped for that day after she had to attend casualty. Swansea NHS Trust has been criticised for washing its hands of the dispute." [Unison Companies Update, September 2002]
Jarvis boss resigns and faces police questioning
"Jarvis accepted the resignation of non-executive chairman Colin Skellett, following a police investigation of his role in the sale of Wessex Water." [Unison Companies Update, September 2002]
Rentokil investigated on fair trading
"The Office of Fair Trading announced a review of undertakings imposed on Rentokil Initial Plc in 1988 designed to protect competition after a Monopolies and Mergers Commission found that Rentokil's monopoly position in the pest control market gave it the freedom to largely fix prices and use selective price-cutting" [Unison Companies Update, September 2002]
Workers beat scrooge contractor Sodexho despite scab bribes
"Ancillary workers employed by Sodexho at Glasgow Royal Infirmary won all their demands to bring pay and benefits up to the level of those employed directly by the NHS, following a strike in which management paid scabs double the going rate (up to £10/hour) to try to crush the strikers. Staff will receive a minimum wage of £5 an hour (currently £4.30) backdated to April, sick pay and a 20% shift allowance. Overtime will rise from time and a quarter to time and a half. All staff will be on the equivalent terms and of NHS staff by April 2004." [Unison Companies Update, September 2002]
Vertex SW1: Pensions threatened by privatisation
"About 250 members of UNISON and GMB are taking industrial action against Westminster Council in protest at the outsourcing of licensing, planning, commercial waste, parking, libraries, building control, highways licensing, trading standards, environmental health and social services to Vertex SW1, a consortium of Vertex, Accord and Cap Gemini Ernst & Young. Nearly 2,500 staff would be transferred. Strikers are concerned about their membership of the Local Government Pension Scheme and continuity of service." [Unison Companies Update, September 2002]
Schools contractor misses targets and is penalised
"Cambridge Education Associates faces a financial penalty for failing to hit two performance targets in Islington schools." [Unison Companies Update, September 2002]
Privatised road service causes 'massive disruption'
"Babtie admitted that there could be problems with the material used for road resurfacing work in Tunbridge Wells, which has caused traffic chaos and massive disruption to town-centre business." [Unison Companies Update, September 2002]
Privatised home repairs fail homeless people
"Birmingham Council found that Accord had fallen short of targets for repairing empty homes to house the homeless in the first year of a repair service contract. Both Serviceteam and Accord are involved in the contract, which was awarded in April 2001 to Accord subsidiary JDM Midlands." [Unison Companies Update, September 2002]
More contractors with snouts in the trough
"Business analysts attacked Anite Group over huge bonuses for directors, despite a profit warning and share price slump of 76% over the last year. Chief executive John Hawkins received a £529,200 bonus last year, taking his total package to £1.05m." [Unison Companies Update, September 2002]
Onyx "leaves rotting waste on the streets"
"Residents in the Allerton area of Liverpool attacked Onyx for taking five days to clear streets of rotting rubbish." [Unison Companies Update, September 2002]
Privatised water chief arrested for £1m bribe
Wessex Water chief executive Colin Skellett was arrested over allegations of a £1m bribe when the firm was acquired by YTL Corporation earlier this year. Skellett is also non-executive chairman of contractor Jarvis, who were implicated in the Potters Bar train crash, for which he earns £101,000 per year on top of the £255,000 per year that he earns at Wessex Water. Wessex Water was previously a subsidiary of scandal-ridden Enron. [The Independent, 23 August 2002]
Privatised water chief triples his pay to £1.4m
"Thames Water boss Bill Alexander tripled his pay to £1.4m over the last financial year. Thames has been involved in the London Underground public-private partnership as part of the Metronet Consortium, with Balfour Beatty, Bombardier, WS Atkins and Seeboard, which will operate a 30-year contract for upgrading and maintaining stations, tracks and tunnels on eight lines. As the third-largest water business in the world, Thames is seeking a change in the law to allow takeovers of other companies owning a substantial water business." [Unison Companies Update, September 2002]
Privatised court security 'dangerous'
"The Scottish Police Federation described plans to replace police with security guards in courts as dangerous, after discovering that the Scottish Executive wants private firms to tender for the contract to escort prisoners from jail to court and maintain order in the courthouse. Eight years ago, private firm Group 4 took over similar duties in England and became a laughing stock after a series of blunders and escapes." [Unison Companies Update, September 2002]
Government considers payments to useless contractors
"The Government is considering reimbursing the expenses of failed PFI bids - a capitulation to contractors following recent complaints about costs. It is thought that reimbursement would apply to shortlisted bidders." [Unison Companies Update, September 2002]
Privatised prisons much more expensive than public prisons
Each prisoner place Group 4's HMP Altcourse, in Fazakerley, is reported to cost "around £43,000 a year, compared with around £25,000 at HMP Liverpool in Walton. The cost of keeping a prisoner in Group 4's Altcourse prison is close to £60,000-a-year, more than double the cost of a public sector prison. Under the terms of their contract, Group 4 have a guaranteed price per place index linked to inflation plus 2%. " [Unison Companies Update, August 2002]
Court computer link abandoned amid spiralling costs
"The £230m IT project to electronically link cases in magistrates' courts has been abandoned. The contract was signed in 1998 with ICL (now Fujitsu Services) to build a computer system linking the 400 magistrates' courts for £183m. When the contract was renegotiated and expanded in 2000 the price rose to £319m. Under the revised contract, Fujitsu will provide 'IT infrastructure and network' - essentially, standard personal computers and Microsoft software. The specialised software for case management, accounting and other court administration will be sought elsewhere. " [Unison Companies Update, August 2002]
Workers resist Capita over rolling shifts
"Staff at the BBC call centre in Glasgow run by Capita have voted overwhelmingly in favour of strike action in a dispute over rolling shift patterns. " [Unison Companies Update, August 2002]
Contractor kicked out of hospital - in-house services restored
"Lanarkshire Acute Hospitals NHS Trust has decided not to renew its contract with Medirest at Monklands Hospital in October. Staff working for the Compass subsidiary, providing support services will transfer back to the NHS when the contract ends. Earlier this year, Stobhill hospital in Glasgow ended its contract with Medirest bringing the contract back in-house." [Unison Companies Update, August 2002]
Private companies' huge pensions shortfall
"Half of Britain's biggest employers are showing a deficit on their final salary pension schemes, according to the results of a Sunday Telegraph survey, in which 77 of the UK's blue chip businesses showed a shortfall on assets needed to fund future pensions totalling £10.13bn. Compass is among the companies that face the biggest shortfalls with assets worth £282m and a deficit of £98m." [Unison Companies Update, August 2002]
Trouble at EDS
"EDS, the world's second-largest IT outsourcing company, plans to cut 2,000 jobs, or about 1.4% of its workforce. The company denied that the job cuts were related to its outsourcing contract with WorldCom. However, EDS' share price fell sharply due to concerns that WorldCom might not be able to pay EDS for its part in an 11-year $6.4bn IT outsourcing contract, signed only three years ago. There have also been concerns about EDS accounting practices, which have been refuted by EDS management." [Unison Companies Update, August 2002]
Problems in PFI schools
"Six schools in Sheffield, rebuilt and maintained under a PFI contract with Interserve, have had problems which included new buildings, poor cleaning and catering." [Unison Companies Update, August 2002]
Concern over joint ventures
"Concerns about the benefits of large scale joint ventures between local authorities and the private sector have been raised after a prominent Edinburgh project suffered a huge drop in dividends. Edinburgh city council has been using dividends earned from its eight fully or partly owned companies to subsidise council tax. The arrangement was threatened when profits in New Edinburgh, a joint venture with Miller Group, fell due to a decline in demand for office space. If the Scottish parliament eases public spending controls, such joint ventures are likely to become more common in 2003." [Unison Companies Update, August 2002]
Sodexho lose hospital cleaning contract
"Spokespersons from Sodexho and South Glasgow University Hospital NHS Trust are denying that the termination of a hotel contract is anything to do with three patients at the Victoria Infirmary having died from salmonella in January. According to the Trust, it merely wanted to bring the service back in-house. From 1st November, 250 cooks, cleaners, porters and switchboard operators will be employed directly by the NHS." [Unison Companies Update, August 2002]
Vertex cheats council workers
"A Vertex consortium has been awarded the contract for the provision of
customer management and business process outsourcing services at
Westminster Council. The 10 year contract worth up to £422m,
means Vertex SW1 will oversee a range of council services in conjunction
with Cap Gemini Ernst & Young and Accord plc who will provide IT and
facilities management services respectively.
"UNISON and GMB are staging a rolling strike campaign against the transfer of 750 employees to Vertex SW1. The company has refused to guarantee existing terms and conditions." [Unison Companies Update, August 2002]
Amey abandons PFI
"Amey has decided to quit bidding for PFI projects. This raises questions about the future of PFI to replace public sector infrastructure. Companies have always complained about what they consider to be the high cost of bidding for contracts. Now they say that changes to accounting standards related to the treatment of these costs no longer makes the work profitable. The industry is calling for the Government to make bidding for PFI/PPP schemes cheaper through standardised contracts and by having fewer bidders." [Unison Companies Update, August 2002]
Contractor 'squandered money' for special needs kids
"A Special Educational Needs Advisor in Waltham Forest has accused EduAction (a Nord Anglia and Amey joint venture) of squandering money, which could have been used to help special educational needs children in the borough. EduAction who have spent £400,000 renovating a school building which is used by only six pupils, admitted there was insufficient provision for children with special needs in Waltham Forest. " [Unison Companies Update, August 2002]
'Corrupt culture' in rail contract
"Evidence to an employment tribunal suggests that shoddy working practices and a culture of staff taking 'backhanders' are common on the London to Glasgow West Coast Mainline modernisation programme, which is 'billions of pounds' over budget. A former senior buyer for Balfour Beatty Rail Projects, is claiming he was unfairly dismissed because he refused to take part in or cover up the company's allegedly corrupt practices." [Unison Companies Update, August 2002]
NHS beds allocated for private work
"The Scarborough & North East Yorkshire NHS Trust has allocated six beds and clinic and operating theatre time for private work following the closure of a local private hospital run by Bupa. The Trust believes it was forced to do this to avoid even worse recruitment and retention problems among consultants caused by the loss of private hospital work locally. The private Belvedere hospital closed at the end of May after its proposed sale fell through." [Unison Companies Update, August 2002]
Sodexho provoke hospital strike over pay
"Around 300 support staff at Glasgow's Royal Infirmary blocked the hospital entrance during a 48-hour walk-out against Sodexho over pay. The firm has offered a new deal giving lowest paid staff a 3.37% increase, jumping to 16.28% next year with the introduction of a £5 minimum wage. But pay grades would merge with experienced and skilled staff losing out. Neither group would be given NHS rates which the union is demanding along with the immediate £5 minimum wage. Other demands were for a 35-hour week, and a pension scheme and sick pay." [Unison Companies Update, August 2002]
PFI deal questioned
"PwC, one of the big four accountancy firms, is alleged to have recommended the Department for Work and Pensions give a PFI contract worth £1bn for properties, to Trillium, a company which PwC audits. PwC apparently recommended that the contract be awarded to Trillium without going through the competitive tender process, which is in breach of the European Services Directive." [Unison Companies Update, August 2002]
Computer contract £100m goof up
"Ministers have been embarrassed by the failure of a £100m caseworking system for the immigration and nationality directorate, built by the German company, Siemens Business Services. There were also problems with a new £230m system for issuing passports and in November 1999 the Home Office admitted that 13 of its 17 IT projects were behind schedule or over budget." [Lambeth cuts short £48m Capita deal, The Guardian, Monday July 2, 2001]
Taxpayers cash 'wasted' on PFI
"Not enough effort is being made to ensure that private-sector deals to provide public services are continuing to offer value for money, MPs have warned." [The Guardian, 11 July, 2002]
Apcoa opposed in Bolton over complaints
"The Conservatives, supported by the Lib Dems, on Bolton Council are trying to get Apcoa ousted from their parking enforcement contract. A high number of complaints have been made concerning the inflexible approach of the wardens in issuing tickets." [Unison Companies Update, July 2002]
Apcoa: Westminster parking 'encourages unfairness'
"Motoring organisations have criticised a scheme launched by Apcoa in Westminster that would, they say, result in more unfair tickets being issued. Parking attendants operating on behalf of Westminster can win the bonus in 13 payments over a year if they meet even higher ticketing targets." [Unison Companies Update, July 2002]
Blackpool rejects Sita and Serviceteam
"Street cleansing in Blackpool will remain in-house. The team won the contract against Sita and Serviceteam under a Best Value review." [Unison Companies Update, July 2002]
Jarvis fail to repair school: council workers to the rescue
"East Renfrewshire Council DLO has had to step in to repair a school roof that was torn off by gale force winds after Jarvis Construction could not provide employees to carry out the repairs. The school, which was constructed under a PPP had been open only 5 months when the storm damage occurred. Six classrooms at the Mearns Primary School remained closed for two months until the DLO stepped in, made the repairs and sent the bill to Jarvis." [Unison Companies Update, July 2002]
Contractor fails to pay staff
"School meals staff at schools in East Riding of Yorkshire Council had to threaten strikes after a dispute with contractors. Martins Food Services has said wages could not be paid to the staff for seven days after pay day. UNISON regional organiser Chris Jenkinson said: 'Unison has contacted our legal advisers because we suspect Martins cannot pay its wages bill at all.'" [Unison Companies Update, July 2002]
Falkirk rejects PPP
"Falkirk Council will be looking to a not-for-profit trust to be its partner in the next of round of school rebuilding. As Falkirk was the first Scottish council to adopt this type of funding for schools its rejection of PPP is significant. The Council believes a voluntary sector partner would bring advantages such as greater community and stakeholder involvement, the retention of profit within the state system and possibly more flexible working arrangements during the project because of the closer links between the council and company. Falkirk has been joined in this move by Argyll & Bute and West Dunbartonshire councils. The three councils might be aware that Glas Cymru, the not-for-profit company which runs Welsh Water, reported pre-tax profits of £24.1m for the financial year to the end of March 2001. Customers will get a bill rebate of, on average, £10 per household." [Unison Companies Update, July 2002]
NHS privateers 'making 30-35% profit'
"It has been reported that the Government recognises the huge profits made by private companies through the NHS, estimated to be 30%-35%. Its response is to open up the NHS to more 'competition' but to be able to claw back some of the profits." [Unison Companies Update, July 2002]
NHS buys failed private hospital
"The Scottish Executive is to buy the private HCI Hospital in Clydebank for £37.5m. The deal covers the entire hospital complex, including 52 beds already in use plus room for expansion, six operating theatres, MRI and CT scanners, and a 100-bed hotel used by patients and relatives. Ten consultants and more than 100 nurses would be asked to stay in their jobs. The hospital opened in 1994 at a cost of £180m, including an estimated £30m of public money. The current owners, the Abu Dhabi Investment Company, said they do not want to continue the business." [Unison Companies Update, July 2002]
ISS 'refusing hospital lab repairs'
"ISS, the lead company in the consortium which won the Hairmyres Hospital PFI project is reported to be refusing to finance essential security repairs to the microbiology laboratory. After nine months of arguments between the consortium and the hospital, ISS still refuses to pay for the repairs, leaving the lab, which could be used to store toxic substances and private records of patient, vulnerable. It is now feared that precious NHS money for patient care is being used to fund the repairs." [Unison Companies Update, July 2002]
Bupa face human rights charge
"Seven whistleblowers from a BUPA care home are taking their case to the European Court of Human Rights in Strasbourg. Although an industrial tribunal at Ashford, Kent, found in their favour last year, the former employees of Isard House, Bromley, boycotted the verdict because they felt that vital evidence about the treatment of residents in the home had been overlooked. A Bromley Council inspection team confirmed their allegations which detailed a number of incidents in unit three of the care home." [Unison Companies Update, July 2002]
Carillion Rail cuts pay despite recruitment problems
"Despite problems in recruiting and retaining rail engineers, Carillion Rail is imposing new terms and conditions that could cost existing engineers £10,000 a year. About 100 senior technical staff who oversee vital repairs and maintenance are being offered new contracts. The offer includes a 10% pay rise on their current salaries of £15,440-£22,200 but pay for overtime and weekend working would be cut. TSSA is balloting for a strike." [Unison Companies Update, July 2002]
Questions over PFI auditing conflict of interest
"PricewaterhouseCoopers are involved in a row over conflict of interest in Scotland, following the disclosure that PwC, which assessed the Scottish Executive's report into private prisons, is also auditor to Group 4, parent company of Premier Prisons, which privately runs Kilmarnock prison." [Unison Companies Update, July 2002]
Rail contractors using casual labour for safety checks
"Maintenance checks on railways are being carried out by under trained casual staff such as students, often hired in pubs and clubs by sub-contractors. Whistleblowers have in recent years reported a marked increase in the use of unqualified labourers, and Railtrack's own spot checks reveal that up to one in 20 workers lacks a safety certificate. The problem of lack of formal training was highlighted in a case at Liverpool Crown Court in 2000 when two workers were acquitted of manslaughter after the death of a colleague. The judge highlighted the 'apparent slackness' of Jarvis Rail, their employer, in allowing unqualified staff to supervise engineering works on the line." [Unison Companies Update, June 2002]
Interserve: faulty hospital security
"Facilities management services at the Dudley Group of Hospitals NHS Trust, where a two day old baby was recently kidnapped are being run by Interserve. Only three security staff are on duty at any one time at the Trust which has hospitals on five sites. CCTV cameras had been faulty and that vital procedures had not been followed to check and repair them." [Unison Companies Update, June 2002]
Amey boss gets huge wad despite losses
"Although Amey recorded a loss of £18m last year, it didn't stop the company paying their chief executive, Brian Staples, benefits of £133,809 in compensation for 'travel and associated costs' after the relocation of the head office to London. In addition, Staples received a £110,000 bonus in the same year." [Unison Companies Update, June 2002]
Tube firm's billion pound profits questioned
"The National Audit Office is planning to investigate the billion-pound profits that will fall to the private companies set to take over the running of the London Underground. The NAO is expected to examine whether the contracts, which will net some companies up to £6 billion on an initial outlay of £70 million, represent value for money. Companies involved are: Bombardier Transportation, Balfour Beatty, Thames Water, Seeboard and WS Atkins, Amey, Jarvis and Bechtel." [Unison Companies Update, June 2002]
DVLA rejects EDS
"The DVLA has rejected a bid from its present outsourcer EDS in favour of PwC Consulting and Fujitsu Services for a £200m contract. EDS has been DVLA's technology provider since 1993, but its contract expires in September this year." [Unison Companies Update, June 2002]
PFI school fails noise test
"Malmesbury School, one of three built in Wiltshire by Bilfinger and Berger at a cost of £60m has failed the noise test. Last month A-level practice papers had to be halted and a pupil moved because the rain was so loud. A lack of soundproofing between classrooms is also a problem. Group 4, which manages the building under PFI, said the firm was 'not aware' of noise problems. Bilfinger and Berger was unavailable for comment." [Unison Companies Update, June 2002]
Apcoa: Outrage at Queen Mum memorial service parking fines
"Outrage in Bolton after civic dignitaries and other churchgoers were booked for illegal parking as they took part in a tribute to the Queen Mother. The service over-ran by five minutes and the council's car parking policy, run by Apcoa, was severely criticised. Earlier, more than 200 Bolton motorists had attended a public meeting to demand that Bolton Council halts the activities of 'over zealous' Apcoa parking attendants. Their comments will be used to review the service." [Unison Companies Update, May 2002]
"Poor maintenance" is "likeliest cause of rail crash"
With the discovery of loose bolts, poor maintenance is emerging as the likeliest cause
of the Potters Bar rail crash.
4 News, May 14, 2002]
Track maintenance was privatised and was the responsibility
of the contracting company Jarvis. Jarvis is also in line to be one of the companies running the
London tube service when privatised. Stephen Norris, erstwhile Tory London mayoral candidate,
is a member of the Jarvis board. Profits for the first half of 2001 had doubled to £18m.
Seven people died in the crash and 76 people were injured.
Jarvis later awarded its chief executive a whopping 66% pay rise, while the head of the rail engineering division received a £100,000 bonus, pushing his pay up 71% to £352,000. "The RMT said that since 1996, public subsidies to the railways amounted to £10bn. Over the same period, private companies made £7.5bn profit from the network." [The Guardian, July 8, 2002] The original sale of our railways raised only £5.3bn. Most observers agree that government subsidies to rail have roughly doubled since privatisation. [Multinational Monitor, Jan/Feb 2002]
"The inquiry found that private contractors had failed to fully tighten one-fifth of the nuts holding sets of points together along the stretch of track in Hertfordshire where the accident occurred. [The privatised rail contracting system has] around 2,000 registered rail infrastructure companies with 84,000 registered temporary workers while permanent workers, track staff who knew their own local lines, have been halved to about 15,000. As RMT general secretary Bob Crow said: 'No-one knows who's working where on the railway network.'" [The Socialist, 12 July 2002] The story is a shocking tale of greed, cost-cutting and incompetence by privatised services with huge amounts of taxpayers' money being diverted into shareholders' pockets.
Elsewhere, a report into the Glenbrook rail disaster in Australia (December 2, 1999) in which seven people died and 51 others were injured, criticised government privatisation of the State Rail Authority which was split up into 4 commercial entities. [http://www.wsws.org/articles/2001/jun2001/glen-j01.shtml]
PFI school fails noise test
"Malmesbury School, one of three built in Wiltshire by Bilfinger and Berger at a cost of 60m has failed the noise test. A-level practice papers had to be halted and a pupil moved because the rain was so loud. A lack of soundproofing between classrooms is also a problem. Group 4 manages the building under PFI." [Unison Companies Update, May 2002]
Bupa threatens care home closures despite profit rise
"Bupa, Britain's largest private healthcare provider, said that the increase in National Insurance paid by employers, as announced in the budget, would cost the business £4m, and could lead to the closure of independent care homes across the country. Announcing full-year figures for 2001, Bupa said that trading performance was up 23.6%, while the group's surplus before tax was £91.9m, up from £65m." [Unison Companies Update, May 2002]
Bupa faces disability rights accusation
"The Disability Rights Commission believes Bupa property managers could be discriminating against a resident in a North Wales care home. The Commission has taken up the case of an 83-year-old war veteran who lives at a home in Penryhn Bay run by Goldsborough Estates, for Bupa. The home managers have allegedly denied him permission to use an electric wheelchair or motorised scooter. He said he has not left the flat in 18 months. The company is considering the matter." [Unison Companies Update, May 2002]
Cheshire: SGI contract terminated
"The contract was terminated due to complaints about the quality of work and lateness. SGI is closing its Chester office and refusing to pay redundancy because it claims that under Tupe the council is obliged to take on the staff, many of whom transferred from its payroll. [...] Last year Cheshire County council terminated its contract for architectural and maintenance services with SGI, formerly Unicorn. The decision to terminate the contract was made because of the council's obligation to achieve best value. Cheshire is now considering seeking damages in excess of £1m." [Unison Companies Update, May 2002]
Compass: school meals contract complaints
"Pupils, school meals staff and parents are unhappy with the school meals at two of Bristol's schools since Compass Group took over the contract. At St Mary Redcliffe and Temple Secondary School pupils have threatened a boycott of their canteen after being taken over by Compass subsidiaries Scolarest and Chartwells last September. Lunches are smaller and more expensive. Dinner ladies have also said that they have been told to cut portions and use lower quality ingredients." [Unison Companies Update, May 2002]
Taxpayers 'face bill for PFI centre fire'
"Bedfordshire council tax payers could have to pay more than £50 a month to cover insurance claims for damage caused by the fire at Yarl's Wood in February. Group 4 Amey Immigration, which runs Yarl's Wood, and its insurers are taking a claim out against the Police Authority. Lloyd's also announced that it was withdrawing its existing contract on the property because of the security risk, and insurance cover on two other detention centres run by Group 4 has also been cut because of similar risks. Firefighters have said much of the damage caused by the fire could have been avoided if the building had been fitted with water sprinklers. The bill for the fire and riots has gone up to £97m. The Detention Centre, run by Group 4 Amey Immigration, has been closed while insurance cover is sought." [Unison Companies Update, May 2002]
Sodexho: Hospital portering shambles
"Staff at Glasgow Royal Infirmary walked out after 10 porters were laid off at the end of temporary contracts at the casualty unit. The walkout ended when Sodexho agreed to keep the staff on for two weeks while trying to find jobs elsewhere for them. Union representatives said the staff must be given full-time jobs. The Royal was criticised by the Clinical Standards Board for Scotland in October for failing to reach a vital treatment target. Delays in finding porters had resulted in heart attack patients not getting life-saving drugs in time." [Unison Companies Update, May 2002]
Consignia: 65,000 redundancy threat 'blamed on ICL'
"The threat of 65,000 redundancies in Consignia has been blamed on the rollout of an ATM network built by ICL. The network, said to be out-of-date and isolated, is one of the largest and most expensive in the UK. It was designed to provide an infrastructure for benefit payments, but the project was dropped after the change in government in 1997, when it was clear the specifications were unworkable. The Post Office was left with a £571m write-off and annual results dropped from £605m profit in 1998-99 to a £171m loss the following year. Consignia continued to roll out the network and the work was again outsourced to ICL. The network now consumes £100m annually in maintenance costs, one of the reasons for Consignia's current financially difficulties." [Unison Companies Update, May 2002]
PFI academy 'faces delays'
"There are doubts that the much heralded Unity City Academy 'superschool' in Middlesbrough may not open in September as originally planned. Despite assurances that the Academy will open on time, the DfES and Amey have still not agreed the financial terms of the deal." [Unison Companies Update, May 2002]
Hospital sues contractor over software failure
"The Queen Elizabeth Hospital NHS Trust is suing Hyder Business Services for more than £1.4m. The Trust claims it was forced into the termination because Hyder failed to implement SAP software in time. The system was due to go live on 5 January 2001, then delayed to 4 June, but the Trust alleges that by 22 May parts of the timetable had still not been achieved." [Unison Companies Update, May 2002]
Onyx: refuse strike call in Lewisham
"Onyx refuse collectors in Lewisham are balloting members over a 12.9% pay increase over three years, or around £30 a week extra for a loader. If rejected a strike could be called. A loader in Bromley gets £244 a week compared to £341.25 in neighbouring Lewisham." [Unison Companies Update, May 2002]
Onyx: Wandsworth street cleaning compaints up 94%
"Complaints about street cleaning have more than doubled in much of Wandsworth since MRS Environmental took over the service in January . Between January and April 2001, complaints about contractor MRS rose by 94% to 881 even though MRS are being paid £1.2m more a year than Onyx." [Unison Companies Update, May 2002]
Privateers cut workers' pensions and boost bosses' pay
"Some of Britain's biggest employers, including Rentokil, Sainsbury's and Tesco, are cutting pensions for staff while promising 'fat cat' retirement pay for bosses of more than £300,000 a year." The 'charitable' sector seems little better: "In February Age Concern launched a 'Fair Pensions For All' campaign to highlight the threat of poverty facing younger people in the future. Not long after, the organisation closed its final salary scheme and cut its contributions from 16.5% to 8.6% for new employees." [Unison Companies Update, April 2002]
Miller group slashes pensions despite 86% profit rise
"Miller Group, the UK's largest privately-owned property development, house-building and construction services company, has closed its final salary pension scheme to new employees. A third of a third of Scotland's largest companies admit they are likely to do the same. Miller Group, announced an 86% increase in profit last year, from £20.5m to £38.2m. Its overall turnover increased by 43% to £575m." [Unison Companies Update, April 2002]
Group 4 'stopped firefighters tackling Yarl's Wood fire'
"Firefighters and police say they were blocked from entering the burning Yarl's Wood detention centre building by staff from Group 4. Fire Brigade representatives claim there was a delay of at least an hour when officers were barred from the site - not by detainees, as reports claimed, but by Group 4 employees." Terrifyingly, Group 4 also plans to buy Wackenhut, who have 29 nuclear power plant security contracts. [Unison Companies Update, April 2002]
Nursing agencies' 40% commission cost taxpayer £8m in 2001/2
"Nursing agencies took nearly £8m of taxpayers' money in commission last year. About 40% (£7.64m) of the £19.4m spent hiring freelance nurses last year went straight to the agencies providing nurses, from auxiliaries through to specialist theatre staff. The remaining £11.46m was paid to the agency workers. Nestor, the health care group, which includes Healthcall and BNA, reports large increases for 2001. Turnover is up 37% to £401m; operating profit 39% to £25.5m; and pre-tax profit up 27% to £23." [Unison Companies Update, April 2002]
Transco: Privatised gas co. faces manslaughter charge
"A prosecution for culpable homicide is to be brought against Transco over a gas explosion that killed a family of four and destroyed a number of homes. The privatised monopoly, which owns Britain's gas pipes, will become the first company in Scottish legal history to face this charge. Directors of Transco could face a possible jail sentence if convicted. " [Unison Companies Update, April 2002]
PFI hospital's £100m funding gap
"A 'secret' report has revealed that Scotland's largest privately-financed NHS hospital has a £100m funding gap. The report also shows that an extra £24m will be needed every year over the next four years for the Edinburgh Royal Infirmary, run by Consort Healthcare, to break even." [Unison Companies Update, April 2002]
Head teachers unhappy with Sodexho meals service
"Colerne Primary School in Wiltshire is considering opting out of the contract for school meals held by Sodexho. Sodexho won the contract last year to provide the county council's 119 schools with meals. The decision to reconsider its part in the contract has arisen partly because the head teacher has been unhappy with the service from Sodexho and also has plans to convert part of the kitchen into a computer and IT suite. Redlands School opted out of the service sometime last year." [Unison Companies Update, April 2002]
Apcoa hospital parking fees criticised
"Staff and visitors at the University of Wales Hospital in Cardiff, are complaining about parking fees charged by Apcoa. Some hospitals in Wales charge nothing. Visitors pay a minimum of £1.90, for up to four hours. The economy of this form of charging is lost on most visitors who do not stay that long. The Trust CHC condemned the charges saying, 'In our view, the position would be slightly mitigated if some of the money from parking charges found its way back into health services. Instead it is going directly into private enterprise.' The site's two multi-storey car parks, run by Apcoa are part of a 1997 £7.2m PFI contract." [Unison Companies Update, April 2002]
Report proves public services are best
"A report from the Public Services Network (University of Cardiff) shows in-house staff offer better and more efficient services than outside contractors. The survey, covering 210 direct service organisations, said: 'In-house services are flexible and can be redirected, while contracted-out services lose flexibility.' The report went on to say: 'If the management is right, in-house services can use their advantages to provide better and more efficient services.'" [Unison Companies Update, April 2002]
Air traffic control privatisation 'financially flawed'
BAE Systems says it would not have taken over the service even if it was free. [BBC News, Wednesday, 5 December, 2001]
CSL sacked from Newham housing benefits
"Newham Council is terminating its contract with CSL to deliver housing benefit and council tax services." [UNISON Company Update November 2001]
"In December 1999-January 2000 Newham was providing only an emergency service for housing benefit claims because CSL was dealing with a large backlog. Tenants complaints over delays in benefits payments have been mounting." [Contract Capital of the North?, Centre for Public Services, June 2000] CSL later "changed its name to Liberata Local Government. The firm's two other divisions are known as Liberata Central Government and Liberata Corporate Services." [UNISON Company Update July 2002]
Hospital Domestic Service Brought Back In-House
"Compass Group subsidiary HHS (now operating as Medirest) is losing its domestic and portering contract at Luton & Dunstable Hospital due to the poor level of service. The service will come back in-house with effect from 1 October 2001." [UNISON Company Update August 2001]
Contractors Leave Hospital 'Filthy'
"Lanarkshire Acute Services NHS Trust is negotiating with Kier Group and ISS Mediclean over reports of sub-standard services in the new PFI Hairmyres Hospital. ISS were awarded a 30-year ancillary and maintenance contract for the hospital, providing porters, cleaners and domestic staff. Staff shortages have led to filthy wards and toilets; water leaks from the roof and seeps up from the sewers; and there are fears that 40% of patient records have been lost. The trust pays £1.2m 'rent' and running costs each month. Staff have become demotivated, not least because of the two-tier pay system currently in place." [UNISON Company Update August 2001]
Privatised Hospital Meals 'Food Poisoning Risk'
"There are problems with the catering at the PFI Hairmyres & Stonehouse Hospital. ISS were awarded the 30-year support services contract but have sub-contracted the catering to Anglia Crown. This means the meals are cooked in Manchester, chilled and driven to the hospital in Scotland. The state of the meals has been so poor that nurses fear they could cause an outbreak of food poisoning." [UNISON Company Update July 2001]
ICL go 74% over Budget for Slower Service
"A Home Office PFI project, awarded to ICL, has been postponed because it has run more than £130m overbudget. The Lord Chancellor's Department blamed the 74% increase in costs on extending the contract with ICL from 8 to 12 years. The project was for an integrated computer information system to be used to improve the flow of information between the police and the courts. However, when the first stage was introduced staff complained that the system slowed things down." [UNISON Company Update July 2001]
ICL Cause 'Huge Delays' in Waltham Forest Benefits
"Waltham Forest Council has terminated its contract with ICL for revenue and benefits. After huge delays and numerous complaints about the service the decision to end the contract was taken after two years of the seven year contract. The council is in negotiation with ICL to agree the costs the early termination will incur." [UNISON Company Update July 2001]
Contractors Leave Brighton in a Mess
"Having assured Brighton City councillors earlier in the week that they had good staff relations, Sita suspended refuse collectors for failing to complete their rounds. Workers responded with a blockade at one depot. It appears the real issue is the unrealistically low price at which Sita took on the contract. It could not break even without setting collection routines that the employees found unworkable. Sita is said to be losing £4m each year on the Brighton and Hove contract. This may force the company to withdraw from the contract as Ecovert did in 1999." [UNISON Company Update July 2001]
Capita Thrown Out of Lambeth Housing Benefits
As expected, Lambeth Council has terminated its contract with Capita to supply the councils housing benefit system and the 175 staff are now council employees again. "Lambeth claims its benefits service has deteriorated since Capita's seven-year contract began in 1997. It says the problems peaked in April last year when it faced 55,000 outstanding queries and the quality of the service remains 'unacceptable'." The Benefits Fraud Inspectorate had concluded that 'radical improvement' was needed in most areas. [Lambeth cuts short £48m Capita deal , the Guardian, Monday July 2, 2001] It had been reported that "early in 2000 the Council issued a highly critical report of Capita's performance citing 'poor' performance between July and December 1999 with missing files, and high levels of complaints. The report also stated that 'Capita's promises could not be relied on'. It reported that a considerable number of county court cases for possession are being adjourned as defendants cite outstanding benefit claims. Earlier in 1999, Capita were processing only 29% of claims with ten working days compared a London average of 79%." [Contract Capital of the North?, Centre for Public Services, June 2000]
Westminster City Council: Capita still in trouble
"In 1999 Capita failed to meet the target of processing 90% of housing benefit claims within 14 days in seven of the first nine months of its ten year £40m contract." [Contract Capital of the North?, Centre for Public Services, June 2000] The service became the third worst in the country in 2000-2001, with a shocking 145 days average to process each new claim. [DTLR and SocietyGuardian Report]
A Westminster social services worker told us: "elderly people, who had never been in debt in their lives were going without food trying to clear the debt left by housing benefit arrears. We had clients whose benefit was coming up for its annual renewal when the previous year's payments had still not been made."
The local MP, Karen Buck said:
"Capita put the system into free fall. At one point in the spring there were 23,000 items of post backed up. [...] at the last count a wholly unacceptable 10,545 items of correspondence remained to be dealt with, and according to reliable information the number of payments to meet rent rebate claims was decreasing at the last count.
"During the midsummer peak of the crisis, claimants — many of them elderly — were sometimes required to queue for three hours at Westbourne house. Some claimants have told me of having to queue for five hours. Those who have attempted to sort out their problems at housing benefit offices have been told early in the morning that there is no point in waiting. They have gone away again and again, increasingly frustrated and anxious about the implications for them if they do not receive housing benefit.
"The service offered to people who try to deal with their problems in person is appalling. One lady who spoke to me had waited at the housing benefit office for two hours, with her documentation, and had then asked to use the toilet. She was told that there was not one available for public use, although she had a medical condition. I understand that a toilet is now available, but that it is kept locked and claimants must ask to use it. "
[Hansard, 14 Dec 2000: Column 866]
ITnet thrown out of Hackney housing benefits
Hackney's housing benefits contract with ITnet has been terminated, while the government is threatening to take control of the council's finances to deal with the mess. The £70m contract began in 1997. The Audit Commission "reported that the borough's housing benefit system was 'in a poor state' with some 17,000 claims awaiting assessment. The council claims the company was taking 'months' to turn claims around." Hackney is claiming a "backlog of 120,000 items of unprocessed correspondence" and faces "a substantial bill for benefit errors and overpayments." The benefits service has been brought back under council ownership and control. [Benefits dispute led to Byers' threat, The Guardian, Friday June 29, 2001] The contract was terminated "following complaints from Hackney residents and councillors about payment and claim processing backlogs" [Council finally terminates ITNet contract, Network News, January 15, 2001]
"In March 2000, thirty housing associations in Hackney, led by the New Islington and Hackney Housing Association, [had] demanded immediate and dramatic action by ITNET and Hackney Council in order to reduce the £3m delayed housing benefit payments. ITNET has a history of being reluctant to recognise trade unions. There are weekly reports in local newspapers of the impact on tenants. The contract is apparently under-resourced, some staff are on short-term contracts, staff morale is evidently very low, not assisted by report management's anti-union attitude, suspensions and reports of bullying. It is also claimed that the contractor has limited concept of the issues of poverty." [Contract Capital of the North?, Centre for Public Services, June 2000]
It was later reported that the council's own staff "from 120,000 cases to 38,000 and expect to clear it by Christmas", showing once again that public services work best under public ownership. [UNISON Company Update June 2001]
Capita 'to be thrown out' of Lambeth housing benefits
"Lambeth Council is expected to terminate its contract with Capita to supply the councils housing benefit system. A report by management consultants Barony Group has recommended that the staff and service be brought back in-house. The Council is also pursuing a legal claim of £18 million because of problems encountered with the service." [UNISON Company Update November 2001]
ITNet Fail in Hackney Benefits and Revenues
"Hackney Council wants ITNet to pay £30m after its benefits and revenue contract was terminated. There is an alleged backlog of more than 40,000 claims and 100,000 images of unprocessed paperwork on the benefits system, which the Council says are all due to ITNet's service failings." [ UNISON Company Update May 2001]
City of Westminster housing benefits: Capita 'worse than appalling'
A local residents' association said: "The problems that bring us people in the greatest distress [...] are those that have been created by Westminster's privatised Housing Benefit 'Service'. Last year we described it as 'appalling'. This year we cannot find an adjective in the dictionary to describe it. It has become even worse. Earlier this year the contractors, Capita, installed a new computer system - but while they were tinkering with the new software, they neglected the piles of benefit applications building up to ever greater heights.
"The result has been a stream of people coming to us in states of anger, confusion, despair and fear. Claimants who have hand-delivered the sheaves of original documents required to prove their identity, income, capital, household details, tenancy conditions and rent are told months later, when Capita finally gets round to looking at their claim, that they have to submit yet more documents to bring their application up-to-date. An 85-year-old widow receives notice from her bank that she is overdrawn and must pay bank charges, because payment of Housing Benefit into her account from which she paid her rent on standing order was stopped without her being notified.
"Tenants bring rent account statements showing varying amounts of housing benefit being paid in or taken out with no explanation to them or their landlord. Council and Housing Association tenants effectively lose their security of tenure as suspended possession orders are granted by the court for rent arrears arising from non-payment of Housing Benefit - and the arrears are increased by the addition of court costs..."
The report goes on to talk of the 'impossibility' of getting information, unanswered letters and 'useless' phone calls and mentions that in the neighbouring borough "Camden Council's in-house Benefit Service, aside from the odd glitch, does cope well."[Fitzrovia Neighbourhood Association Annual Report, November 2000]
"Sheffield housing benefits: CSL in crisis"
"CSL [...] has made a number of blunders including issuing 2,000 court summonses to council taxpayers instead of reminders. The housing benefit contract has a large backlog and soaring rent arrears. Complaints were still pouring in in March 2000. The council is reported to have imposed a £400,00 financial penalty for poor performance"
"A Council report in February 2000 summarised the crisis in housing benefits:
* CSL were not contract compliant in processing new claims and reapplications.
* There was a significant backlog of claims to be processed.
* The call centre was not administering the volume of calls required by the plan.
* There were concerns about the scanning process with some documents being incorrectly indexed and therefore not allocated to the correct claimant reference in the document management system." [Contract Capital of the North?, Centre for Public Services, June 2000]
EDS fined for Brent benefits failure
In the London Borough of Brent's benefits system, "Major problems occurred four years into the revenues and benefits contract when EDS upgraded its IT system. A five month backlog in housing benefit claims in 1999 resulted in the company having to pay a six figure financial penalty, issue a public apology and send letters of apology to 30,000 residents. The backlog has been eradicated and EDS have taken on additional staff and strengthened its management team." [Contract Capital of the North?, Centre for Public Services, June 2000]
CSL trouble in Taunton Deane Borough Council benefits
"A seven-ten week backlog in housing benefit claims led the council to threaten financial penalties in December 1999. CSL had commenced the contract a year earlier and had been forced to take on an extra 20 staff because it had under-resourced the bid. The council were also reported a £500,000 shortfall in council tax collection. However, in March 2000, the council announced that the £3.5m revenues and benefits contract has been terminated and the work brought in-house. The chair of the policy committee stated 'The contract has been a most unhappy experience for all it has touched....I'm afraid all of us have had to acknowledge that the situation is unacceptable to all parties' (LGC, 31 March 2000)." [Contract Capital of the North?, Centre for Public Services, June 2000]
Southwark benefits: CSL in crisis
CSL's five year £40m contract to run Southwark's revenue and benefits service. has led to huge backlogs and complaints. CSL "had to engage 30 additional staff because it had under-resourced the bid. Major problems arose with service delivery with a backlog of 40,000 items in spite of additional finance given by the council to clear the backlog. [...] Publicity in the local press highlighted the massive backlog of benefit claims. CSL management told staff they had the biggest backlog in the country in late 1999. Complaints from tenants are to be investigated by the local government ombudsman. [...] The council has brought forward its Best Value review of housing benefit and council tax collection. [...] The council is clearly concerned to deal with the failures of the contract, but without facing up to the real issues of under-resourcing." [Contract Capital of the North?, Centre for Public Services, June 2000]
EDS lose Kingston upon Thames benefits service
"In late 1999 the Council terminated its tax and benefits contract with EDS which had been operating for three years. The £1.5m a year contract has been plagued with performance problems, the council claimed that EDS employed too few staff. For example, EDS issued 1,400 letters to housing benefit claimants in July 1999 virtually accusing them of fraudulently cashing cheques. Some 40 staff will transfer to the council." [Contract Capital of the North?, Centre for Public Services, June 2000]
CSL penalised for benefits in Torridge District Council
"The Council imposed substantial penalties in 1999 after CSL failed to improve performance on the tax collection contract." [Contract Capital of the North?, Centre for Public Services, June 2000]
ITnet fined for Islington housing benefits failures
The London Borough of Islington has cancelled "a £25,000 consultancy with [ITnet] and penalised them £8,000 for poor telephone performance in 1999. The council expressed 'grave concern at their performance to date'. The company also failed to reduce the backlog of claims by a June deadline." [Contract Capital of the North?, Centre for Public Services, June 2000]
CSL fined for North Somerset benefits failure
"[North Somerset District Council] imposed financial penalties for poor performance in November 1999. The percentage of documents taking over 10 working days to process increased from 0.07% at the end of August to 51.8% by the end of October. CSL has been operating a £2m council tax collection contract since 1995 and were awarded the housing benefit contract in 1999." [Contract Capital of the North?, Centre for Public Services, June 2000]
Cumberland Infirmary: PFI disaster
A catalogue of disasters at Cumberland Infirmary, the country's
first PFI hospital:
"Two ceilings have collapsed because of cheap plastic joints in piping and other plumbing faults - one joint narrowly missed patients in the maternity unit.
The sewerage system could not cope with the number of users and filth flooded an operating theatre.
Clerical and laundry staff cannot work in their offices because they are too small.
Expensive bespoke trolleys had to be commissioned because those supplied don't fit the spaces between beds.
The transparent roof means that on sunny days the temperature inside Cumberland Infirmary reaches over 33C - the hospital has no air conditioning.
Two windows have blown out of their frames, one showering a consultant and a nurse with glass. " [Beds crisis - in August?, The Guardian, Sunday August 27, 2000]
Wandsworth: EDS lose contract amid service failure
"The London Borough of Wandsworth sacked EDS from a two -year revenue and benefits contract worth £3.2 million because of its 'below-par performance'. One hundred EDS staff have since been transferred back to council employment." [Labour Research, May 1999]
"Defaults of £200,000 built up in a year as waiting lists went up and the service declined. In addition there were various ombudsmen complaints. One particular problem was that the capital investment in computer equipment had not worked as well as the company promised. In addition, claimants were endlessly passed around to different staff because no one person or team was responsible. [...]
"The deputy leader stated that he was fed up apologising for a poor service. The council said EDS had failed to meet service targets in several areas, including time taken to answer enquiries and process claims. 'The current backlogs and quality problems are such that it would take several months following suspension to achieve a fully satisfactory service' (Wandsworth Borough Council, Housing Committee Report, 17th September, 1998).
"Examples of the poor service and inability to meet performance standards include:
"* Benefits service: Check and validate application form within 3 working days. Default threshold 95%; EDS performance 31/8/98 54%.
* Rent officer referral within 3 working days. Default threshold 95%; EDS performance 14%.
* Implementation of changes prescribed by government and notified to claimant. Ist payment following changes. Default threshold 100%; EDS performance 38%." [Contract Capital of the North?, Centre for Public Services, June 2000]
CSL: staffing issues and union ban in Croydon benefits
"In Croydon management was reorganised and additional staff had to take on work from other contracts (customer service staffing was increased by 50% to cope with the workload plus overtime working). Pay increases were determined by the company rather than by the local government pay award. In 1996 15 staff left due to voluntary redundancy. CSL introduced new contracts - new staff have inferior terms and conditions. The company did not allow staff to hold trade union meetings on premises, even in their own time." [Contract Capital of the North?, Centre for Public Services, June 2000]
The reports above are based largely on media reports and do not necessarily represent the views of Kensington and Chelsea UNISON
This site is designed on computers powered only by clean, green electricity from Good Energy (www.good-energy.co.uk).