Government outsourcing rockets 53% despite Carillion disaster

GMB and Unite unions have spoken out against the government’s “disastrous” privatisation project after outsourcing surged by 53% in the past year, despite the collapse of Carillion and signs of other contractors being in trouble.

15 Jan 2019| News

Photo by Marcin Nowak

Research by the GMB found that the value of public sector contracts jumped to £95 billion last year, up from £62 billion the year before.

Some of the largest contracts went to firms that have already issued profit warnings, including Capita – receiving £1.4 billion worth of public works, and Interserve (taking £450 million).

The situation is reminiscent of Carillion’s, which the government continued to hire despite the company’s financial problems, and which subsequently collapsed under £7 billion in debt, costing the taxpayer over £150 million.

“What this shows is despite the tragic fiasco of Carillion, the government hasn’t learned its lesson,” GMB National Secretary, Rehana Azam, said.

”The Conservatives are hell bent on privatisation and outsourcing our public services – regardless of the consequences.

”What other explanation can there be for this huge increase on outsourced contracts in the year Carillion went bust and when other outsourcing giants look like they’re on life support?

Gail Cartmail, Assistant General Secretary for Unite the Union, added: “It is staggering that a year after the biggest corporate failure in modern UK history the government has carried on as though it is business as normal.

“The fact that no one involved in Carillion has yet had any form of action taken against them demonstrates either that the regulators are failing to do their jobs or that existing laws are too weak. If it is the latter then we need better, stronger laws.

“A year on from Carillion’s collapse the government needs to stop prevaricating and start taking effective action to drive bandit capitalism out of the UK.“

GMB’s Go Public campaign has been launched to end the outsourcing of public sector services.

Meanwhile, Unite is pushing for the criminal investigation of those involved in Carillion’s collapse.