ESSU

“This is not so much a ‘hollowing out’ of the state, but a fundamental redirection to finance and manage markets and collusion in the deepening of corporate welfare.” Chartist, July/August 2012.

The London Fire and Emergency Planning Authority (LFEPA) has reversed its decision to award a ten-year 999 Fire Control managed services contract to Capita plc. Instead the LFEPA will enter into a contract for a replacement mobilising system only. This means that the 120 control staff will remain employed by the Authority. ESSU produced a detailed analysis making the case against outsourcing for the FBU, UNISON and GMB late last year.

UNISON has called on the London Borough of Barnet to immediately abandon its plan to become a Commissioning Council. The report by the European Services Strategy Unit (ESSU) documents the fundamental weaknesses in each stage of the procurement process for two large strategic partnerships of up to £1billion value and nearly 1,000 staff. The report documents the Council’s commissioning of two large strategic partnership contracts, assesses the Council’s reorganisation to become a Commissioning Council and examines the impact of this model for service users, elected members, staff and community and voluntary organisations. The Costs and Consequences of a One Barnet Commissioning Council study also revealed a systemic failure in contract management in Adult Services and proposes an alternative strategy.

Excessive profits obtained by PPP companies and banks is again in the news. The first evidence on the scale of excessive PFI profits and the growth the secondary market was detailed in Global Auction of Public Assets by Dexter Whitfield and followed by a more detailed research in The £10bn Sale of Shares in PPP Companies: New source of profits for builders and banks, ESSU Research Paper No. 4, by Dexter Whitfield in January 2011. This details the news coverage and links to reports.

PFI firms should be forced to share excessive profits with councils and health trusts Daily Telegraph, 2 May 2012.

PAC slams ‘excessively high’ private returns on some PFI projects Public Finance, 2 May 2012.

Call for ‘radical’ change of policy on PFI Financial Times, 2 May 2012.

Call for radical rethink of PFI The Independent, 2 May 2012.

The current model of PFI is unsustainable, says PAC New Statesman, 3 May 2012.

MPs lay boot into PFI again The Construction Index, 3 May 2012.

Written evidence was submitted to the House of Commons Public Accounts Committee and the Treasury Committee in June 2011. Following these two reports the National Audit Office addressed some of the key issues in Equity investment in privately financed projects, February 2012. A second PAC on PFI equity was published by the PAC on May 1 2012.

“‘Payment by results’ has become the new performance management mantra. It is intended to incentivise contractors, with payment conditional on the completion of agreed outputs or outcomes. There are currently two such payment and reward models: the social impact bond mechanism and phased incentive payments.” This article examines the implications of this approach, the growth of ‘social markets’, incentive payment contracts and explains why it is a high risk strategy; pages 22-23, in Critical Reflections: social and criminal justice in the first year of Coalition government, Centre for Crime and Justice Studies, March 2012.

In February Dexter Whitfield gave lectures at the University of Sheffield (Department of Sociological Studies), Queens University, Belfast (School of Management), given evidence to the Public Accounts Committee, Western Australia State Government, and a presentation to the Canadian Union of Public Employees bi-annual research meeting.

An assessment of a business case update for the customer and support services outsourcing highlights the London Borough of Barnet’s approach – ignore real risks, miscalculate client costs, exaggerate savings, claim non-financial benefits that cannot be substantiated, inadequate equalities assessments and ignore the high failure rate PPP strategic partnership track record. The Council’s refusal to require services to be located in Barnet could lead to mass redundancies immediately after transfer.

A critical assessment of Compass’s Plan B that reveals its shortcomings and need for a more radical and comprehensive socialist alternative, by Dexter Whitfield, Red Pepper Issue 182, Feb/Mar 2012.

A detailed analysis of the proposed transfer of the London Borough of Barnet’s Housing Service to Barnet Homes, the ALMO established in 2004. The Council truncated the options appraisal and business case into one process, limiting the options and pre-selecting the preferred option, and has led to a further deterioration in the quality of options appraisals and business cases in Barnet.

The London Borough of Barnet plans to establish a LATC that requires Adult Services to generate up to 90% of the £0.7m annual profit. Yet the financial viability of Barnet Group Ltd (Yours Choice Barnet and Barnet Homes) is highly questionable. This report details the flawed appraisal process, the reasons for financial instability, governance and the potential impact on service users and staff.