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| After Carillion, outsourcing looks like a dogma that’s run out of road | After Carillion, outsourcing looks like a dogma that’s run out of road |
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| Outside the gates of the British Museum last week 60 outsourced cleaners, porters, technicians, plumbers and electricians petitioned to be taken back in-house. They were handed over to Carillion five years ago. Now the company’s bankruptcy leaves them in limbo, and they want to return as the museum colleagues they once were. | Outside the gates of the British Museum last week 60 outsourced cleaners, porters, technicians, plumbers and electricians petitioned to be taken back in-house. They were handed over to Carillion five years ago. Now the company’s bankruptcy leaves them in limbo, and they want to return as the museum colleagues they once were. |
| But where are the rest of them? Carillion crowed to Facilities Management World that it was taking over 138 museum staff in a “hugely prestigious contract”. But those 138 have dwindled to just 60, for the same volume of work. That’s how outsourcing operates, cutting more brutally than public employers dare. | But where are the rest of them? Carillion crowed to Facilities Management World that it was taking over 138 museum staff in a “hugely prestigious contract”. But those 138 have dwindled to just 60, for the same volume of work. That’s how outsourcing operates, cutting more brutally than public employers dare. |
| With their future unknown, most fear publishing their names, but a technician with 28 years’ service there tells me job cuts have been harsh: “We can’t do jobs that need doing, things are badly neglected.” One cleaner happy to be named, Rebecca Cartwright, has worked there for 10 years. “Once Carillion took over, vacancies were unfilled, jobs disappeared, so we each covered bigger and bigger areas,” she says. “I used to mop and polish stone floors, clean with Brasso, clean the glass cases. But now there’s only time to pick up rubbish.” | With their future unknown, most fear publishing their names, but a technician with 28 years’ service there tells me job cuts have been harsh: “We can’t do jobs that need doing, things are badly neglected.” One cleaner happy to be named, Rebecca Cartwright, has worked there for 10 years. “Once Carillion took over, vacancies were unfilled, jobs disappeared, so we each covered bigger and bigger areas,” she says. “I used to mop and polish stone floors, clean with Brasso, clean the glass cases. But now there’s only time to pick up rubbish.” |
| Here’s a familiar complaint from outsourced workers: “There’s never enough equipment. I can spend half an hour trying to find a dustpan, or dragging a Hoover miles from another department.” When, researching a book, I worked as a hospital porter outsourced to Carillion, it was the same story: everything was scrimped on, the same scarce mops used for toilets and wards. | Here’s a familiar complaint from outsourced workers: “There’s never enough equipment. I can spend half an hour trying to find a dustpan, or dragging a Hoover miles from another department.” When, researching a book, I worked as a hospital porter outsourced to Carillion, it was the same story: everything was scrimped on, the same scarce mops used for toilets and wards. |
| So far 1,600 Carillion employees have been made redundant, 10,000 hived off elsewhere, with these museum staff among 7,000 still floating. They are at the mercy of PricewaterhouseCoopers, the administrator sifting the wreckage. Or, as the work and pensions committee chair, Frank Field, said last week, first “milking the Carillion cow dry” as pension advisers and now re-emerging “as butcher, packaging up joints of the fallen beast to be flogged off”. | So far 1,600 Carillion employees have been made redundant, 10,000 hived off elsewhere, with these museum staff among 7,000 still floating. They are at the mercy of PricewaterhouseCoopers, the administrator sifting the wreckage. Or, as the work and pensions committee chair, Frank Field, said last week, first “milking the Carillion cow dry” as pension advisers and now re-emerging “as butcher, packaging up joints of the fallen beast to be flogged off”. |
| At last week’s Commons hearing, the business committee chair, Rachel Reeves, expressed shock at PwC seizing £20.4m in fees from Carillion’s carcass in its first eight weeks’ work. She extracted from David Kelly, PwC man in charge, that he paid himself £865 an hour – nearly 116 times the £7.50 minimum wage of some cleaners. Administrators take first pickings, while creditors, 30,000 suppliers and the £900m pension deficit can expect little. | At last week’s Commons hearing, the business committee chair, Rachel Reeves, expressed shock at PwC seizing £20.4m in fees from Carillion’s carcass in its first eight weeks’ work. She extracted from David Kelly, PwC man in charge, that he paid himself £865 an hour – nearly 116 times the £7.50 minimum wage of some cleaners. Administrators take first pickings, while creditors, 30,000 suppliers and the £900m pension deficit can expect little. |
| The museum outsourced its lowest-paid workers when faced with deep government cuts in a way it would never consider for curators, yet these staff too are an integral part of the great national treasure house. One trustee suggests it was driven by political pressure to demonstrate super-efficiency. “We soon saw the downside of outsourcing. We were not happy with Carillion, with things not done as well as they were.” Would they take the staff back in-house? “We have no legal right to break our contract with Carillion, for as long as PwC keeps it going.” That contract could be sold off elsewhere. | The museum outsourced its lowest-paid workers when faced with deep government cuts in a way it would never consider for curators, yet these staff too are an integral part of the great national treasure house. One trustee suggests it was driven by political pressure to demonstrate super-efficiency. “We soon saw the downside of outsourcing. We were not happy with Carillion, with things not done as well as they were.” Would they take the staff back in-house? “We have no legal right to break our contract with Carillion, for as long as PwC keeps it going.” That contract could be sold off elsewhere. |
| No one knows how many of the state’s myriad functions are let out to Capita, Interserve, G4S, and the rest | No one knows how many of the state’s myriad functions are let out to Capita, Interserve, G4S, and the rest |
| Since Margaret Thatcher forced compulsory competitive tendering on councils, there has been, astonishingly, no evidence and no research to prove whether outsourcing is value for money. There are no controlled trials, no measuring long-term effects or knock-on costs to the state of lowering pay, finds the Smith Institute. The colossal outsourcing industry grew out of faith-based policymaking. Pressing the accelerator with his Open Public Services policy, David Cameron promised an “end to state monopolies” to “release public services from the grip of state control”. | Since Margaret Thatcher forced compulsory competitive tendering on councils, there has been, astonishingly, no evidence and no research to prove whether outsourcing is value for money. There are no controlled trials, no measuring long-term effects or knock-on costs to the state of lowering pay, finds the Smith Institute. The colossal outsourcing industry grew out of faith-based policymaking. Pressing the accelerator with his Open Public Services policy, David Cameron promised an “end to state monopolies” to “release public services from the grip of state control”. |
| Carillion’s lesson is that long-term risk is never outsourced. Yet no one knows how many of the state’s myriad functions are let out to Capita, Interserve, G4S, and the rest, all shakier in Carillion’s wake. Look what has happened just in the cultural sector: the Imperial War Museum privatised its gallery services back in 2014, but the private contractor, Shield, went bust in 2016. The contract was bought by another company, and staff now fear for their pensions. | Carillion’s lesson is that long-term risk is never outsourced. Yet no one knows how many of the state’s myriad functions are let out to Capita, Interserve, G4S, and the rest, all shakier in Carillion’s wake. Look what has happened just in the cultural sector: the Imperial War Museum privatised its gallery services back in 2014, but the private contractor, Shield, went bust in 2016. The contract was bought by another company, and staff now fear for their pensions. |
| The National Gallery passed 400 workers in 2015 to Securitas, despite a long-running protest strike; it has since de-recognised the PCS union. Some of the Tate’s visitor services were outsourced to a firm using zero-hours contracts, paying far less. Last year the contract was passed on to Securitas, which also de-recognised the union. There are plenty more cases where long-serving public employees find themselves cast out, dismissed and alienated as not integral to their institutions. | The National Gallery passed 400 workers in 2015 to Securitas, despite a long-running protest strike; it has since de-recognised the PCS union. Some of the Tate’s visitor services were outsourced to a firm using zero-hours contracts, paying far less. Last year the contract was passed on to Securitas, which also de-recognised the union. There are plenty more cases where long-serving public employees find themselves cast out, dismissed and alienated as not integral to their institutions. |
| But is the outsourcing dogma running out of road? There is a groundswell of local councils and public institutions returning services in-house, chiming with the National Audit Office’s report in January revealing the £200bn wastefulness of PFI schemes, whose only use is a deceit to keep debt off the Treasury’s books. In the cultural sector, the Southbank Centre, English Heritage and Historic Royal Palaces are bringing their services back in, some declaring that employing their own staff as part of a team creates a friendlier public face. Councils say the same, as the collapse of Carillion sees Croydon, Ealing, Harrow and Hounslow take back services. The irony of austerity is that as every penny is super-scrutinised, rigid outsourced contracts often look the worst value for money when public managers can run more agile services themselves. | But is the outsourcing dogma running out of road? There is a groundswell of local councils and public institutions returning services in-house, chiming with the National Audit Office’s report in January revealing the £200bn wastefulness of PFI schemes, whose only use is a deceit to keep debt off the Treasury’s books. In the cultural sector, the Southbank Centre, English Heritage and Historic Royal Palaces are bringing their services back in, some declaring that employing their own staff as part of a team creates a friendlier public face. Councils say the same, as the collapse of Carillion sees Croydon, Ealing, Harrow and Hounslow take back services. The irony of austerity is that as every penny is super-scrutinised, rigid outsourced contracts often look the worst value for money when public managers can run more agile services themselves. |
| British Museum staff campaigning outside the gates stand as poignant representatives of armies of public servants, in their hundreds of thousands, who should be taken back into the fold. | British Museum staff campaigning outside the gates stand as poignant representatives of armies of public servants, in their hundreds of thousands, who should be taken back into the fold. |
| • Polly Toynbee is a Guardian columnist | • Polly Toynbee is a Guardian columnist |
| • This article was amended on 29 March 2018 to replace a reference to debtors where creditors was meant. | • This article was amended on 29 March 2018 to replace a reference to debtors where creditors was meant. |
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