The collapse of Carillion has kept politicians and journalists preoccupied over the last week. Obviously, the economic impact of the failure of such a large organisation is significant, putting at risk investors and suppliers alike. Worse is the human impact upon those who have lost their main source of income. As is so often the case, the cost of the Government’s failure to be act will be bourne by those least able to afford it.
The impact of Carillion’s collapse upon the public sector has received particular attention. In Crawley, we appear to have ‘got lucky’, while Carillion have been used in the past to help deliver renewable energy projects in the town, neither Crawley Borough Council nor West Sussex County Council appear to have any active projects in Crawley with Carillion at this time.
However, the town’s relative good fortune should in no way give us cause for complacency. Carillion’s collapse has highlighted the major risks which are being carried by the public sector in the way projects are being outsourced.
Outsourcing can help to cut costs, but all-too-often you find that any savings which do emerge don’t come from any genuine improvements in efficiency but by cutting corners or workers’ wages. That’s unacceptable.
Then there is the issue of accountability. When public sector bodies outsource work they had a certain amount of control over to the private sector. That disconnects people’s elected government from being able to take decisions affecting services the public sector rely upon, making it less responsive and ultimately less accountable for meeting people’s needs.
Carillion’s failure has left the public sector having to pay out £5.4m a day to cover the cost of public sector contracts with Carillion, but beyond that the United Kingdom has £258.6bn still tied up in PFI deals, potentially at risk. That’s not sustainable.
Labour already committed at its Conference last autumn to bringing these contracts back into public control, restoring that broken accountability for these services and potentially saving taxpayers billions of pounds. That’s money which can be reinvested back into delivering the standard of services the public deserves.