Carillion collapse casts light on private sector role in south London public services

Carillion’s collapse this week has turned attention to the private sector’s role in delivering public sector contracts, including in south London.

Construction firm Carillion, which manages hundreds of public service projects and public services, collapsed into liquidation, prompting renewed debate about the role of profit-driven private sector companies in providing essential services to often-vulnerable people.

The announcement earlier this month that recruitment firm Reed in Partnership won a £14m contract to deliver the DWP’s Work and Health Programme in five south London boroughs comes amid increasing interrogation of the private sector’s role in public service delivery.

Dr James Rees, an Open University academic specialising in the relationship between the voluntary sector and public services in the UK, said there is no reason why recruitment agencies should not be able to deliver such services, but cautioned against the increasing trend of private companies delivering public services.

“Evidence would suggest that private providers are more likely to cut corners in contracts, for example there was evidence of providers ‘creaming’ and ‘parking’ clients in the Work Programme,” he said.

Creaming is when preference is given to easier-to-serve clients, while parking refers to providing little assistance to harder-to-serve clients.

Reed in Partnership will begin delivery of the DWP programme in March 2018, running until 2023, in Croydon, Kingston upon Thames, Merton, Richmond upon Thames and Sutton, after the budget for such services was devolved from Westminster to local government.

A statement from Better Working Futures, the programme’s name, said Reed in Partnership’s contract will focus on helping people with disabilities or health conditions, the long-term unemployed and other priority groups find employment.

The contracting of public services to large private companies is nothing new though, as Dr Rees explained.

“The programmes we see today are the result of continuous efforts to increase contracting out of employment services away from the public sector, which began in the 1990s and continued throughout the New Labour period,” he said.

“These trends are all consistent with the principles of neoliberalism. Austerity is also relevant, because increasingly scarce resources mean that the supposed efficiencies of the private sector are favoured, and frontline services are streamlined, simplified, and arguably diminished in quality.

“They are also more likely to be ruthless in streamlining services and offering standard, generic services that have been shown to work ­– i.e. deliver results,” he continued.

While Labour leader Jeremy Corbyn railed against the ‘dogma of privatisation’ during Prime Minister’s Questions on Wednesday and pledged that a Labour government will end the ‘racket’ of outsourcing, the Labour leader of Merton Council welcomed the new Reed in Partnership contract.

Councillor Stephen Alambritis, who is also chairman of the South London Partnership, said: “There are 75,000 people living across the five boroughs who are either long term unemployed, have health problems or disabilities or face other kinds of barriers to employment.

“The devolution of the Work and Health Programme to south London will realise the potential of our residents who are excluded from the social and economic benefits of work.”

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