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Serco and the West Australian hospital with no patients Serco and the West Australian hospital with no patients
(7 months later)
The series The series of crises affecting Serco around the globe are starting to hit its bottom line and financial markets are getting very nervous. Nonetheless, shareholders will take comfort from the $4.3bn, 20-year-deal Serco has struck with the West Australian government to provide most non-clinical services at the new tertiary Fiona Stanley Hospital. The $2bn facility was due to open this April, but the government has announced it will have staged openings from October, with it not becoming fully operational until April 2015.
of crises affecting Serco In 2014 Serco will be paid $118m to run this hospital with no patients. Of those wasted taxpayers funds, $53m is simply being paid to Serco because the hospital is not open. This is a compensation payment the Western Australian Liberal government must pay because the hospital delays mean the anticipated rivers of operational revenue to Serco are yet to flow.
around the globe are starting to hit its bottom line and financial markets are The WA Health Minister has confessed that he is paying Serco for over 200 people to work at the site. According to statements from Serco, the 150 “operational staff” and an 80-person “pre-operational project team’' are by doing things like cleaning, conducting safety checks, maintaining the gardens, moving furniture and identifying hospital defects. Others perform a “welcoming service” that includes providing directions and managing site events. All for a hospital that is blissfully free of the inconvenience of a single patient.
getting very nervous. Nonetheless, shareholders will take comfort from the $4.3bn, 20-year-deal Serco has struck with the West Australian government The arguments made in support of privatisation is that it provides better value for money, because the competitive environment of the private sector rewards the ability to provide equal or better services at a lower cost. It has been suggested that accountability is greater in the private sector. Serco has a diverse range of contracts in WA, including with the department of corrections. It has been in the spotlight lately for various bungles, including allowing several prisoners to escape under its watch.
to provide most non-clinical services at the new tertiary Fiona Stanley Hospital. The $2bn facility was due to open this April, but the government has announced The WA government could learn a thing or two by having a closer look at the UK experience. British Serco is trying to restore its reputation following a crisis in confidence that culminated in its CEO, Christopher Hyman, resigning late in 2013 “to help the company restore its reputation”. Margaret Hodge, the UK MP who chairs the powerful public accounts committee has said “Serco has proved it is good at bidding but not at delivery”. Subsequently, a UK community faces the loss of their hospital as Serco walks away from the contract because it is not profitable enough.
it will have staged openings from October, with it not becoming fully operational until April Hodge speaks of “the inability of government to contract-out in a way that protects the taxpayer’s interest”. Regarding a medical contract being “... an absurd situation where you had a company seemingly lying about what it was doing, but there was nothing in the contract that could allow you to terminate it - indeed, they still appeared to be eligible for their bonus payments.”
2015. Politicians should be forced to explain how privatising essential services benefits the general public and not just corporations with the most effective lobbyists. Conversely, given the privileged position of companies that win contracts to run privatised government assets, their duty of disclosure and transparency should be greater, not less.
In 2014 Serco will be paid $118m to run this hospital with no
patients. Of those wasted taxpayers funds, $53m is simply being paid to
Serco because the hospital is not open. This is a compensation payment the
Western Australian Liberal government must pay because the hospital delays mean
the anticipated rivers of operational revenue to Serco are yet to flow.
The WA Health Minister has confessed that he is paying Serco for over 200 people
to work at the site. According to statements from Serco, the 150
“operational staff” and an 80-person “pre-operational project team’'
are by doing things like cleaning, conducting safety checks, maintaining the
gardens, moving furniture and identifying hospital defects. Others perform a “welcoming
service” that includes providing directions and managing site events.
All for a hospital that is blissfully free of the inconvenience of a single
patient.
The arguments made in support
of privatisation is that it provides better value for money, because the
competitive environment of the private sector rewards the ability to provide
equal or better services at a lower cost. It has been suggested that
accountability is greater in the private sector. Serco has a diverse range of contracts in WA, including with
the department of corrections. It has been in the spotlight lately for various
bungles, including allowing several prisoners to escape under its watch.
The WA government could learn a thing or two by having a closer look at the UK
experience. British Serco is trying to restore its reputation following a
crisis in confidence that culminated in its CEO, Christopher Hyman, resigning
late in 2013 “to help the company restore its reputation”. Margaret
Hodge, the UK MP who
chairs the powerful public accounts committee has said “Serco has proved
it is good at bidding but not at delivery”. Subsequently, a UK community
faces the loss of their hospital as Serco walks away from the contract because
it is not profitable enough.
Hodge speaks of
“the inability of government to contract-out in a way that protects the
taxpayer’s interest”. Regarding a medical contract being “... an
absurd situation where you had a company seemingly lying about what it was
doing, but there was nothing in the contract that could allow you to terminate
it - indeed, they still appeared to be eligible for their bonus payments.”
Politicians
should be forced to explain how privatising essential services benefits the
general public and not just corporations with the most effective lobbyists.
Conversely, given the privileged position of companies that win contracts to
run privatised government assets, their duty of disclosure and transparency
should be greater, not less.