The share price of the outsourcing company Capita, after plunging on 30 January, has started recovering slightly as Solidarity goes to press. Capita has 73,000 employees, and enjoys contracts to run a vast and unwieldy range of public services, for which it has no special expertise, including in the NHS.
It looks like the Government will be willing and able to stop Capita following Carillion into collapse, and the Capita bosses have cancelled dividend payments rather than (like the Carillion bosses) shovelling money out of the door as quickly as possible as risks of collapse emerge. The case remains for taking all the big outsourcing companies — G4S, Serco, Mitie, and the others — into public ownership, and running the work they do in-house, with public service pay and conditions, and with democratic scrutiny and control. A recent example of Capita’s operations in the NHS shows one reason why.
NHS England has recently found that tens of thousands of items of medical correspondence — test results, clinical notes and the like — sent to the wrong GPs have been redirected to Capita and are sitting in a pool of lost mail in Capita offices.
In October 2016 Capita formally notified NHS England that it had received an estimated 580,000 items of “clinical notes”, and said blandly that “with hindsight... it believes it could have reported the backlog sooner”.
East Coast Rail: nationalising the losses, privatising the profits
Virgin Trains East Coast, the consortium that runs the London to Edinburgh rail line which involves Stagecoach and Virgin Group, has admitted over-bidding for the contract to run the railway line. In other words, they made a promise to the government of £3.3bn in order to land the contract; and have now “discovered” that they can’t pay that much after all.
The government first proposed to salvage the private running of the line by ending the contract early, essentially letting Virgin Trains East Coast off the hook for £1bn. This week the Tory transport minister Chris Grayling has admitted that even this farcical fix might not be enough to save the deal, and that the government might simply renationalise the East Coast line.
Privatisation does not work. The chaos of the private sector only serves one end: profiteering. It is not a stable basis on which to run a socially-useful service. Even a government which is hell-bent on privatisation as a point of ideological principle has been forced to acknowledge that public ownership may be the only means of stabilising the service.
Of course, the Tories are determined to learn nothing themselves, and teach Virgin and Stagecoach that such profit-gouging behaviour will always be rewarded: instead of taking all their public contracts off the offenders, the government has awarded Virgin an extension on the lucrative contract for the InterCity West Coast service.
Nationalise the railways!