It is just over a year since Carillion went into liquidation, but figure regarding outsourcing of contracts since that day suggests the government hasn’t learned its lesson.
Data from GMB trade union has revealed that the value of public sector contracts awarded in 2017/18 has increased by 53% from the figures of 2016/17.
The value of contracts captured by the Tussell database was £95 billion in 2017/18 – a huge increase from the £62 billion previously.
Contracts in all parts of the public sector – central government, further and higher education, NHS, parish councils, and schools – all increased; Central government contracts were responsible for the most prominent rise, with a 144% rise in value between 2016/17 and 2017/18.
Only local government public contracts saw a decrease.
The recipients of these contracts are a cause for concern; Interserve bagged £450 million of public contracts, despite issuing two profit warnings in the final months of 2018.
Capita received £1.4 billion of public outsourcing contracts in 2017/18; like Interserve, the company has already issued a profit warning of its own.
The similarities to Carillion’s plight are eerily similar; profit warnings issued, yet contracts awarded regardless.
When the construction and public services company collapsed in January 2018, it went down with £7 billion worth of debts.
The ramifications were huge, insofar as it highlighted poor payment practices for small businesses, who had undertaken work on behalf of Carillion; many of these organisations didn’t see a penny of money, which resulted in redundancies and in some cases, the winding up of companies.
Thousands of Carillion jobs were lost, and the collapse cost tens of millions of pounds to the taxpayer.
And Rehana Azam, National Secretary of GMB, believes lessons haven’t been learned, and the consequences could be dire.
“What this shows is, despite the tragic fiasco of Carillion, the government hasn’t learned its lesson.
“The Conservatives are hell bent on privatisation and outsourcing our public services – regardless of the consequences.”