Tuesday, 4 December 2012

Capita and the Outsourcerers: And Poof! Goes the Welfare State

In just the first half of 2012, Capita: The British Government’s Favourite Outsourcerer, won over £900m of contracts to provide services previously delivered by the public sector.  This is three times the business it won during the same period just one year earlier.  However, the latter half of this year has seen this ‘achievement’ dwarfed by the news that Capita has been selected as the preferred bidder for a £1.7bn contract to provide ‘educational support services’ for schools across Staffordshire. With Capita poised to gobble up even more of Britain’s public services, today’s article shed light on who Capita are, how much of Britain they own, and why we should all be paying better attention to the rise of the Outsourcerer.

Capita Who?

Capita provide a wide range of services for private and public sector clients under the guise of allowing the client to a) save money and b) focus on providing their ‘core’ offering.  So let’s say you are a police force like the Met. Why would you employ an in house IT team when Capita, IT specialists, can run things for you?  They’ll be cheaper and you can focus on catching criminals, as is your core ‘offering’.  But as we shall see, both these promises can be found wanting.

Beginning with just two people within the Chartered Institute of Public Finance and Accountancy in 1984, Capita became an outsourcing giant which last year posted a turnover of £2.9bn, with pre tax profits of £385.3m and 46,500 employees[1].  But how did they get here? 

The Conservative governments of Thatcher and Major were good times for Capita.  They saw their profits and turnover doubling year on year through the early 90’s.  By 1996, in the dying days of the Major government, Capita were posting a turnover of £112m, pre tax profit of £12.3m and had grown to 3,500 staff.  They bought Recruitment & Assessment Service from the Government and in so doing expanded their recruitment business.  They also won their biggest contract to date to manage the Teachers Pensions Agency and administer the driving theory test for the Driving Standards Agency.

However, at the arrival of New Labour, bright eyed with ‘modernising’ zeal, Capita heard the whistle blowing for the gravy train and rode it all the way to Valhalla.  Just one year into the first Blair government, Capita were boasting a turnover of £238m, pre tax profits of 27.1m and a staff of over 5000.  From here on in, the growth in exponential and based in large part on acquisitions of formerly government organisations, and contracts to deliver central and local government services.

Pre Tax Profit


In summary, in the ten years of New Labour between 2000 and 2010, Capita turnover increased by a multiple of fifty nine.  During this time they took over the following services:

Pensions Service for the Metropolitan Police
HR for Westminster City Council
BBC Information Centre
Constructionline - the public sector online register of approved construction contractors and consultants
The Congestion Management Scheme for Transport for London
Service Partnership with Birmingham City Council
Strategic Partnership with Harrow Council
Installer Registration Scheme for the Health & Safety Executive
Strategic Partnership with Sheffield Council
Extended and expanded ICT and contact centre contracts with Birmingham City Council

The ‘Strategic’ or ‘Service’ Partnership deals are the biggest hitters, where a council basically invites Capita to provide a whole host of services for the Council over a number of years. 

One might ask: if Capita and their Outsourcerer friends can provide a lower cost solution to a non core service, allowing more public money to be spent on the services that matter, what is the problem?  The problem is, that the services are more often than not MORE rather than less expensive (particularly when taking into account the bigger picture) and as time moves on, the definition of what constitutes a ‘non core offering’ seems to have lost all foundation in sense.

The Lie of More for Less

The so called cost effectiveness argument for outsourcing is driven under the assumption that a private ‘specialist’ can deliver a more efficient service than the public sector.  Or, as some in the trade might put it, deliver more for less.  The fact is that in most cases, while the bidding stage presents a short term saving, the longer term picture is quite the opposite. 

Firstly, the profit motive.  The corporation is out to make a profit from the service they provide, unlike the public sector provider.  Secondly, in order to make any substantial reductions on providing the cost of the service, the brunt is most often met in the terms and conditions of the workforce, meaning low pay, lack of job security and ultimately, another bill for the government to pick up down the line
 Speaking of changes in Health and Social Care services in an interview with the New Statesman, an anonymous worker puts it perfectly:

“No local authority should make that deal: even just on the pragmatic basis that it will be their own residents who are on the receiving end of that low wage, their own housing benefit department making up the carer’s rent shortfall, their own health and children’s services that come under strain when poverty is rife.”

The proof of the pudding is after all in the eating, so one might expect after the wave of outsourcing that occurred under new Labour, that we would have seen a drop in public spending on noncore services (infrastructure, IT, support services etc) and an increase in that spent directly on the service, e.g. welfare support for the vulnerable. In fact during the tenure of New Labour the costs of providing the public services they outsourced rose astronomically, and with it, government borrowing.  As the Institute for Fiscal Studies highlighted in 2010, whilst public spending on investment (transport, the NHS and education – on these services contracts) rose sharply, the increase in benefits provided to the elderly, sick and unemployed  was achieved without as significant an increase in spending as during  the previous Conservative government.   In short, the 4.4% per annum average rise in public spending under New Labour (compared to 0.7% under the Conservatives) went not on handouts to the needy or ‘bribes for the electorate’, but in fact funded the rise of the Outsourcerers. 

However, despite the public disdain the Tories showed in opposition for these contracts, once in office the Coalition achieved the unimaginable: they outsourced as a faster rate than New Labour.  And here we come to the second issue of outsourcing – the creation of a shadow state.

A Hollowed Out State

As the rise of Capita and her fellow Outsourcerers Serco, G4S and others continues apace after the Coalition Government took over in 2010, the nature of the services they were providing moved from peripheral to what one can only describe as Core.  In recent years the government has farmed out contracts to the private sector to run hospitals, to transport prisoners, to run prisons, to build and run police stations, to build and manage schools, and now even to teach lessons.

To anticipate the results of all this outsourcing, one can look to the emerging legacy from the New Labour period.  First to the NHS, where a vast majority of the hospitals whose construction was outsourced through Private Finance Initiatives, which often included conditions which meant the outsourcing of services to the Private Partner are now facing a financial apocalypse.  A recent study found that in London alone, twelve of the eighteen healthcare Trusts were financially viable.  Worse than that, seven Trusts had to be issued with a £1.5bn bailout from government to cover the unsustainable costs of the PFI contracts.

 There is also the matter of transparency in the spending of public money.  The Public Accounts Committee, which is responsible for ensuring value for money to the British Tax Payer, is but one body raising the issue.  One recent report stated clearly that companies providing public services for profit refuse point blank to answer questions on the subject of value for money by hiding behind the cloak of commercial confidentiality.

Finally, the giant Outsourcerers get to wield so much power that they, like the super banks before them, become too big to fail.  Capita itself recently received no more than a ‘censure’ from the Financial Services Authority after its Financial Management arm lost its investors £144m by betting their investments on high risk endeavours whilst promising the investments as risk free.  Whilst Capita’s culpability was unchallenged, only £32m was requested in damages for the investors.  This, together with recent slapped wrists for G4S after the Olympic understaffing issue, and A4E for its work programme scandal, leave a bitter taste in the mouth.
In essence, these companies are responsible for such a swathe of service provision, that it seems they no longer face any existential threat by fine or sanction, as the resultant impacts on the public services would be unacceptable. 

Enough is Enough

The simple truth of the matter is that unless we start to pay more attention to the superficially turgid topic of public service commissioning – or the privatising of public services – there may very well not be a state left. 

This might seem something that doesn’t necessarily trouble you, but there is reason we went down the route of democratic statehood in the first place; In order to protect the individual, to guarantee a standard of service provision and treatment of the staff delivering those services, all delivered under a mandate provided by the electorate every four years.

Today, the outsourcing market for public services stands at over £80bn, with the Coalition Government announcing a further £70bn of services soon to be opened out for tender.  This, together with the visceral attacks on the provisions of the welfare state, is somewhat reminiscent of the Poor Law Amendment Act of 1834, which heralded the Workhouse.

Indeed, what is happening today in the UK, rather than being a modernisation, as it is billed, is infact a regressive step back in time.  The ideas of private companies delivering education, health, transport, post, energy and other services is not new.  It is old.  It is how things used to be done.  It failed miserably.  The idea that private services operate fairly and that philanthropy, charity and voluntarism can deliver a fair society belongs in the past along with its workhouses and its pauper lists.
The Welfare State rose out of the failure of this approach, to ensure that through our contributions in tax and national insurance, every citizen was guaranteed access to healthcare, education and all the other supporting elements of the social contract.  If this was breached, the electorate could hold those offices of state to account.  Not so in 2012.  So, it seems, we are called to repeat history and take back the services which we all need, out of the hands of private interests, and into the hands of those with a stake in the public interest.

Get Involved

Join Residents of Barnet to protest Capita’s ever growing slice of the Council Budget – here
Keep up to speed on the latest sell offs at Corporate Watch – here
Organisations to watch:

[1] All figures and information in this section sourced from: http://www.capita.co.uk/about-us/pages/our-history.aspx

Friday, 30 November 2012

Palestine, the UN and Rank Hypocrisy

On November 29th 1947, United Nations Resolution181 declared the separation of the British Mandate of Palestine into an ‘Arab’ state, a Jewish state and Jerusalem (an international city).
On the 65th anniversary of this day the United Nations met again; this time to acknowledge the state of Palestine.  Today’s article argues that the US, Israel and their few friends have, for decades, thwarted the will of the world that two states, Israel and Palestine exist.  They have instead maintained their disingenuous ‘roadmap for peace’, which has served only to legitimise and perpetuate the dissolution and destruction of Palestine – and that our one way out, is through the peacemakers inside Israel.

Why Are Palestine at the UN?

In short, the Palestinians have been attempting (since before Israel even happened) to attain acknowledgement of their own statehood and rights to autonomy and self determination.  Their beautiful country has been passed between the Ottoman Empire, the British and is now occupied by the state of Israel, and has been for over forty years.

Just six months after the declaration of the state of Israel, the UN resolutions against Israel’s treatment of Palestine and Palestinian began.  Resolution 212 – Assistance for Palestinian Refugees was created after the mediator to Palestine found the exodus of Palestinians in areas now deemed Israeli created a humanitarian crisis.  His comments were direct in his report which stated that for the UN “the choice is between saving the lives of many thousands of people now, or permitting them to die”.  He goes on to state in his report that “the alleviation of starvation and distress amongst the Palestine refugees is one of the minimum conditions for the success of efforts to bring peace to that Land”.  Important to note this statement was made in 1948, and what has changed for the better since?  Generations of Palestinians have gone through the same treatment in an ever tightening leash of Israeli occupation.

To further make my case, since its inception, over 130 UN General Assembly resolutions have been made with regard to Israel and Palestine.  They include but are not limited to:

July 4 1967: UN General Assembly Resolution 2253 (ES-V): Condemns Israel's measures to change the status of Jerusalem as invalid
July 14 1967: UN General Assembly Resolution 2254: "Deplores" Israel's failure to abide by UN General Assembly Resolution 2253 (ES-V)
December 1 1969: UN General Assembly Resolution 2535: UNRWA Report. "Reaffirms" the "inalienable rights" of the Palestinian people and requests the Security Council to take "effective measures" to force implementation of previous UN resolutions
December 11 1969: UN General Assembly Resolution 2546: Condemns Israeli "violations of human rights and fundamental freedoms" in the occupied territories
November 22 1974: United Nations General Assembly Resolution 3236: Recognizes the right of the Palestinian people to regain its rights, including the right to self-determination and the right of return.
November 22 1974: UN General Assembly Resolution 3237: Observer status for the Palestine Liberation Organisation (PLO).
December 6 1979: UN General Assembly Resolution 34/70: Reaffirms previous calls for a full Israeli withdrawal from the occupied territories and an international peace conference with PLO participation.
December 19 1982: UN General Assembly Resolutions 38/180: Calls all nations to suspend or sever all diplomatic, economic and technological ties with Israel. Condemnation of Israel on various topics including occupation of the West Bank, Gaza and the Golan Heights, war in Lebanon and the annexation of Jerusalem.
April 20 1988: UN General Assembly Resolution 43/233: Expressing shock over killing of Palestinian civilians in Nahalin.
December 15 1988: UN General Assembly Resolution 43/177: Acknowledges the proclamation of the State of Palestine on 15 November 1988

One can see from the tone and frequency of these resolutions that since its inception, the majority of the countries of the United Nations have found Israel in contempt of the spirit of the 1947 agreement and in breach of international law. For its treatment of Palestinian refugees, the continued building of settlements (fortress towns) on Palestinian lands, its defiant development of nuclear weapons, its annexation of Jerusalem, its military occupation of the West Bank and Gaza, its building of an Apartheid Wall surrounding most Palestinian villages and controlled by Israeli Military forces, for its blockade on Gaza which has caused a humanitarian crisis, for its war on Gaza ‘Operation Cast Lead’ in 2008/9 which saw over 1000 Palestinians killed….for all these reasons, the UN General Assembly has laid down resolution after resolution signalling international agreement against Israel’s actions.

So one might ask: if there are all these resolutions, why hasn’t anything been done?  The answer to this is quite simple: the US has used vetoed or abstained from resolution critical of Israel which has reached the UN Security Council (the bit of the UN which actually calls the shots) has been adopted.  The resolutions go up, and the resolutions come back down, vetoed.  It is clear, to take action against Israel, is to take action against the United States.  This is a step no state is willing to take on behalf of Palestine.

So what’s the Big Deal about This Resolution?

That is a very good question.  The Palestinians are simply determined to progress, through all diplomatic means available to them, the advancement of their cause.  Looking at the history of it, one can only applaud their continued efforts.  The less optimistic amongst us might consider it the diplomatic equivalent of repeatedly banging one’s head against a wall.

Following the latest US veto at the Security Council of a proposed resolution to admit Palestine to the UN as a member state, the Palestinians came to the back door.  They found they could side step the Security Council, and apply straight to the General Assembly to attain Non Member State Observer status.  This means a) implicit acknowledgement that a state of Palestine exists and b) potential access to funding and institutions of the UN such as the International Criminal Court (where they try the war criminals).

Now, the stated policy of the United Kingdom, the United States and Israel is a peaceful solution to the Israeli-Palestinian ‘conflict’ revolving around the creation of two states.  So you might think that the UN acknowledging that Palestine exists would be, dare I say it, a good thing?  Surely, that would simply be an echo of the original resolution 181?

First, we were told it was a pointless effort.  Then we were told it was an obstacle to peace.  Then we were told it was wrong for a state to be acknowledged via the UN rather than diplomatic negotiations (this is a first….anyone remember Kosovo? Israel? Any other state in the last fifty years?)  Perhaps one of the most disgraceful and transparent manipulations was that by the UK government, who stated that they would only support the resolution if Palestine subscribed to certain conditions, the key of which was to abandon any right to apply war crimes committed by Israel to be taken before the International Criminal Court.  Have you ever heard of any state having its membership of the United Nations contingent upon giving up its rights to protect itself from war crimes?  No, you haven’t, because no state ever has.

Despite the hustle, the result of the vote was: 138in favour, 9 against and 41 abstentions.

The meagre nine that voted against the resolution included Israel, the United States and Canada, joined by the Czech Republic, Panama and several Pacific island nations: Marshall Islands, Micronesia, Nauru and Palau. The Pacific nations typically support the U.S. and Israel at the U.N. on key General Assembly resolutions.  It would not be overstating the case to consider this vote a landslide in favour of Palestinian self determination.

Reaction to Palestine Being Granted Non Member State Observer Status

                  US Ambassador to the UN Susan Rice denouncing the vote for Palestinian Non Member Observer Status

It might surprise those possessing more than half a wit to find that there has been vocal opposition to the point of near hysteria from spokespersons Israeli, American and British about the existential catastrophe that would result if the UN voted for this resolution.  They swing in bipolarity between the vote being utterly pointless and simultaneously the death knell to peace in the Middle East.   
Over in the US, and apoplectic Susan Rice, US Ambassador to the UN stated that ‘This resolution does not establish aPalestinian state’ and Hillary Clinton called the move ‘counterproductive’.  The UK’s foreign secretary William Hague meanwhile ‘lamented’ the UK’s forced abstention at the hands of Abbas who steadfastly refused to give up the right to prosecute Israeli war crimes for the sake of the UK’s yes vote.
Canada’s foreign minister John Baird threw a full blown diplomatic hissy fit and recalled Canadian diplomats from Israel, the West Bank and UN Missions in New York and Geneva.

Israeli PM Netanyahu stated that the vote will “change nothing”, whilst his foreign secretary hinted it may lead to “the toppling of Abbas” (the President of the Palestinian Authority) as anecessary measure.  Meanwhile Tzipi Livni, the self styled moderate dove of the Israeli political system declared the Palestinian move a “strategic terror attack”.   The reaction from Israel went further than words though, with the state announcing hours after the vote, that it would be expanding it's illegal settlement building programme, with thousands of new homes to be built on Palestinian land in the West Bank and East Jerusalem in coming weeks and months.

A Hawk in Doves Clothing

It does not take a genius or a conspiracy theorist to understand that the US, UK and Israel state authorities have no interest in creating a peaceful two state solution in the Middle East.  The US and Israel (and their clients abroad), have used peace negotiations to provide a smokescreen of legitimacy to the continued expansion of Israel into the territories of Palestine.  Over the last forty years, Palestine has been taken from a State, to several Occupied Territories, to its current derisory position of being several large open prisons governed by the Israeli armed forces.  This point has been made and lamented upon by many commentators, campaigners and peacemakers alike have lamented for decades.
Noam Chomsky refers to Israel as essentially a client state of the US providing military, technological and corporate assistance to the US in the region, a role it adopted after its 1967 ousting of Egypt’s Nasser.

Therefore, rather than Israel being delegitimized like Zimbabwe, Iran, Iraq, Apartheid South Africa or other nations which defied international law and will, Israel has (thanks to its supporters) gained a legitimacy far beyond the bounds of reason.  As Naomi Klein pointed out in 2009:
“Since 2006 Israel has been steadily escalating its criminality: expanding settlements, launching an outrageous war against Lebanon, and imposing collective punishment on Gaza through the brutal blockade. Despite this escalation, Israel has not faced punitive measures - quite the opposite. The weapons and $3bn in annual aid the US sends Israel are only the beginning. Throughout this key period, Israel has enjoyed a dramatic improvement in its diplomatic, cultural and trade relations with a variety of other allies. For instance, in 2007 Israel became the first country outside Latin America to sign a free-trade deal with the Mercosur bloc. In the first nine months of 2008, Israeli exports to Canada went up 45%. A new deal with the EU is set to double Israel's exports of processed food. And in December European ministers "upgraded" the EU-Israel association agreement, a reward long sought by Jerusalem.
It is in this context that Israeli leaders started their latest war(Operation Cast Lead): confident they would face no meaningful costs. It isremarkable that over seven days of wartime trading, the Tel Aviv StockExchange's flagship index actually went up 10.7%.”

The Palestinian's persistance in taking these matters outside the US lead 'peace process' serves to highlight the rank hypocrisy at play, and force these players into showing their true hand.  This is eaxctly the direction the peace process, the real one, needs to head in.

To Hell with the Road Map

If we continue expecting the US to broker a real peace, we simply sit on the sidelines wringing our hands in hope whilst Palestine is rubbed off the map, while Palestinians are brutalised and further generations of Israeli’s brutalise themselves by becoming oppressors.

We must surely, and soon, find a way to end the Israeli occupation of Palestine.  As the US is unlikely to give up its treasured client in the region, the Palestinian’s have the will but not the power, and the international community is simply an unheeded voice: the change makers are the Israeli peacemakers.  It is for them to oust their war-mongering political leaders and demand a society based on equality and justice, not oppression and occupation.  Newspapers like Ha‘aretz which denounce the Israeli war machine; social justice movements like OccupyIsrael; Peace groups like Peace Child Israel & Jerusalem Peacemakers; Human rights organistions like B’Tselem and others; the mind blowingly brave Refusenik movement of Israeli young people who refuse to serve in the Occupied Territories.  All these groups are the conscience of Israel, the humanity hidden behind the public narrative.  They are the untold story.  They work day in, day out with Palestinians and international peace and aid workers for a real peace.  It is for those of us who want justice for Palestine, to stand with these Israeli peacemakers….as they really are our only hope.

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