Tag Archives: privatisation

Exclusive: How the French are squabbling over the spoils they can make by privatising and removing jobs from Britain

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Steria, the French IT company favoured by Whitehall and the NHS

Steria, the French IT company favoured by Whitehall and the NHS

An extraordinary battle is under way across the Channel between three big French IT companies who have a massive interest in British government contracts over the privatisation of Whitehall, town halls and the NHS including removing jobs from Britain to India.
Atos,hated by the disabled in Britain for its harsh policy in implementing Iain Duncan Smith’s policy of getting the disabled back to work, has made a hostile bid to take over Steria, the company chosen by the government to privatise NHS and Whitehall jobs and remove some to India.
Steria is trying to merge with Sopra, another French IT company,in a ” sweetheart deal ” to make big profits by combining new technology with removing jobs from Europe to India.
Steria is furious with Atos for what it calls ” disturbing ” its talks with Sopra. But Atos has left its lucrative offer on the table to tempt Steria shareholders
All this is revealed in a small report from the Paris reporters on the influential Bloomberg website over Easter.
For Atos the deal is simple. It a double whammy – they make money from Iain Duncan Smith’s privatisation of benefit medical tests and more money by offshoring jobs from Britain to India.
For the disabled not such good news, they are forced back into the job market say in Sheffield just at the point when jobs are being moved to India by the same company.
The deal merging Steria and Sopra is equally as good. the game is given away in a press release on Sopra’s website which reveals that it will create a three million Euro company, which could rapidly grow to four million Euros by economies of scale, more jobs shifted from Europe to India and a big jump in profit margins.
It says:”Sopra brings the power of its organisation in France, the strength of
its banking, human resources and real estate products and its effective application management model.
For its part, Steria brings its international reach (Europe and Asia) with a strong
positioning in the United Kingdom.”
“Industrial-scale production capacity would be significantly reinforced with an array of offshore and nearshore service centres representing a workforce of approximately 8,000 people,including over 6,000 in India.”
The company would be 35,000 strong with 8000 jobs in India and other offshore sites.
It also adds that “Steria would be able to leverage Sopra’s offshore capacity in India for its French clients.”
These include the Department of Work and Pensions, the Department of Environment, Food and Rural Affairs and the NHS. Soon,no doubt to be joined by the Home Office and Ministry for Justice.
It predicts profit margins – currently 6.8 per cent for Sopra in the UK will soon top 10 per cent.
For ministers like Francis Maude, Jeremy Hunt and Iain Duncan Smith, this must be bliss – the French squabbling over the best way to make loads of money from their privatisation programmes. It is a global capitalist’s wet dream with even the prospect of a few non exec directorships for retiring Tory politicians when they leave office.
For the disabled, civil servants and those who believe in and want good local services with a public service ethos, it probably can’t be worse. How long before a disabled claimant denied benefit by Atos is told there is a good company vacancy in Pune, India so go and get the job.

Privatising the Police:The scandals behind the bidders

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G4S – coming to a police station near you.

Would you trust a private company as much as you would a police force to protect you? Would you believe they follow the same  ethical standards and probity?  Would they train and pay their staff properly?  You could be about to find out as the West Midlands and Surrey police forces start to contract out service provision.

I have just completed a report for Unite the union on some of the companies bidding for £1.5 billion of work with the backing of Theresa May, the Home Secretary. If you link to http://bit.ly/KGVE7I  and download the report you can see my findings on some of the bidders.

A lot are covering up a load of  dark secrets and unethical and immoral practices outside the UK.

If don’t care a damn what happens to Palestinian prisoners on the West Bank in Israel or can’t be bothered that US troops breathe in toxic fumes from burn pits in Kabul or that companies use tax havens to avoid paying out medicare to staff, then you won’t mind what happens to your local police force in Birmingham or Guildford.

Take G4S for example. they have had to admit in their annual report that the need to train people to understand human rights. Evidently their Israeli subsidiary  staff prisons where they practised torture on their Palestinian inmates.

And if you are working in Britain, no prob that the company has axed its final salary scheme for all its employees while lining up a £403,000 a year non contributory pension for its chief executive.when he reaches the ripe young age of 60.

Or that former London police chief,Lord Condon is getting £123,000 plus a year plus his allowances in the House of Lords to promote police privatisation and rubber stamp top salary deals for his fellow directors.

Take another company KVR, best known for building Guantanamo Bay. Not quite as well-known for making sure its 21,000 staff in Iraq need not be covered by Medicare by using a Cayman Island tax haven to avoid having to provide it..

Or in blatant disregard to health and safety they face legal action for burning toxic materials in open tips on US bases in Kabul. So what if troops die from cancer, they are lucky not to be shot by the Taliban instead.

And then they are two home-grown companies. Blue Star, which provided two weeks training for auxiliary firefighters to protect your homes in London, in case the Fire Brigades Union goes out on strike.

And finally Reliance, run by Tory donating Brian Kingham – nice £6m house in Carlyle Square in  Chelsea – finances his company through a rather interesting family  trust – not tax avoiding again, surely not?

Obviously we are going to have a wonderful new era with privatisation – as we ditch ethics for profits.

Exclusive :The district auditor’s disgraceful response to the Barnet MetPro scandal

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Andrew Dismore: Right to complain Pic courtesy: thejc.com

The scandal over  the employment of security guards by MetPro Rapid Response is one of the worst examples of a council failing to monitor outsourcing of a service – the only one I know where an authority never even signed a proper contract. See my earlier blog at http://bit.ly/ktHKbs

 So it is  outrageous that  Paul Hughes, the  district auditor,has refused a request from Andrew Dismore, the former MP for Hendon and now Labour’s challenger to Tory Brian Coleman, for a full scale public interest inquiry into the affair.

Andrew rightly decided to report the council to the district auditor and call for a public interest report into the scandal. In his letter to Mr Hughes he pointed out:” Having been at the Council meeting when the Robocop style of security used by MetPro at the request of the Council first came under criticism, the consequent investigations have revealed a catalogue of catastrophic failures by Barnet Council and its leadership.

” This poor contracting and lack of financial control  is not a one off, as the Iceland investment fiasco and cost overruns of the Aerodrome Rd bridge confirm.

“What is especially worrying, is that the internal audit found there were inadequate systems to ensure the same thing did not happen again. The “One Council” initiative will create dozens of opportunities for more to go wrong too, with consequent mammoth losses to Barnet’s long suffering tax payers, if immediate corrective action is not taken.”

Mr Hughes reply is equally instructive:

“Where the body is already taking action to remedy deficiencies the auditor may conclude that a Public Interest Report at that point would only have limited impact and may in fact have the effect of unnecessarily undermining public confidence in a public body” (my italics).

“Therefore,whilst we consider that the matters raised in the internal audit report do represent serious internal control issues, our view is that a public interest report is not required at this time.”

He goes on to say the reasons he has refused a further inquiry is because Barnet has promised to investigate further and reform its procedure and because ” the matter is already in the public domain”.

He leaves a faint hope of reconsidering his decision if the council responds by significantly delaying reforms or the failure is found to be systemic (by the council investigating itself).

Barnet has responded. It is cutting  nine more jobs in the department supervising contracts – presumably to increase the scope for more mistakes.

 As  the leader of Barnet Labour Group, Alison Moore  says:” How will cutting posts help deliver an “effective and responsive” procurement service when the council are about to embark on complex privatisations?  I suspect this decision has more to do with saving money than sorting out the service. This is a barmy proposal.”

Andrew Dismore has challenged this pathetic decision of  the auditor whose company Grant Thornton managed to miss the MetPro scandal for three years and pass Barnet’s accounts without any question.

His letter warns: “Nothing could further undermine public confidence in Barnet’s administration, which is now at rock bottom as any objective resident would confirm and as evidenced by the Council’s own satisfaction surveying.”

 “My request for the public interest inquiry was not just in the context of Metpro, but more generally into Barnet’s contract letting and monitoring processes and checks. Only this week, the Hendon Times has carried on its front page yet another example, this time in the contracting (or lack of it) for care services, where failings at the social care centre with whom the Council failed to follow proper procedures and checks and to agree a formal contract actually led to the death of a resident with learning difficulties. Barnet are serial offenders presiding over a catalogue of procurement disasters. ”

…” there appear to be more deep seated problems with procurement and contracts that throw real doubt about the council’s capacity to take on the highly risky “easyCouncil” service outsourcing.  In the circumstances, I would invite you to reconsider your decision. ”

Mr Hughes will know that a public interest report by him could have wider implications for other councils. Given Barnet boasts it is a Tory flagship council that is blazing the privatisation trail – that is even more reason to check its public probity in this area.

Of course  there might be other reasons. I am sure Mr Hughes is a man of such probity that he  couldn’t have reached his decision in the knowledge that Grant Thornton, under new audit reforms following the abolition of the Audit Commission,, would need to persuade Barnet to continue its lucrative auditing contract. I mean he wouldn’t decide the commercial profits of Grant Thornton are more important than public probity. Or that given under the present rules Barnet will have to pay for the public interest report, that he could save the council money and avoid annoying Brian Coleman by refusing to investigate.

But you don’t have to sit back. If you, and say, all the bloggers in Barnet think Mr Hughes is wrong you can demand he reconsider. I suggest you do this to back up Andrew Dismore. You can email the auditor at paul.hughes@uk.gt.com .

A judge is likely to look sympathetically at large numbers of residents demanding the district auditor investigate  the £1.3m non contract with MetPro and Mr Hughes’ decision is subject to judicial review. I hope it won’t have to come to this.

Do Londoners want firefighting on the whim of bankers and hampers from Harvey Nicks?

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a london PFI fire engine equipped with tax debt pic courtesy http://www.freefoto.com

April 20 will be a day of reckoning for AssetCo, the company that owns London’s and Lincolnshire’s  fire engines  and was used by the London Fire Brigade to try to break striking firefighters. It has until April 20 to answer in the Companies Court following  a winding up petition from Revenue and Customs  which could lead to the company and its subsidiaries being put into administration.

On that day it will have to answer  a petition from Revenue and Customs to repay anything between £5m and £8m ( we don’t know exact sum – winding up petitions are secret documents) in overdue tax or go into administration. And a banker will move in to own London’s  fire engines.

This scandal would have never seen the light of day if the directors of AssetCo, led by chief executiveJohn Shannon, had not been hoping to pull off a big coup and make a small fortune by allowing their company to be taken over in the wake of the publicity over the London fire dispute.

Whatever company examined their books – we don’t know the name – obviously did not like what it saw  and suddenly talks were over and shares plummeted. They have not recovered and were trading at 17.5 p yesterday rather than 70p at their height. Within days the company admitted it had to repay some £50.6m of debt and find £8.5m working capital including plus a £3.5m urgent overdraft from the bank. Seven days later it announced that it wanted the same shareholders who had seen their investment plummet to give them another £8m.

It stated: “The Directors believe that with the cooperation of the Company’s creditors and banks, the current financial strain on the Company will be temporary, and the additional funding resources referred to above will ensure that a more appropriate capital structure will be in place to support the future growth of the business. ”

What it did not tell anybody was that two days after the announcement it was in front of the Companies Court in The Strand in London pleading for a delay against a petition  from Revenue and Customs to wind up some nine of its companies because of long overdue tax.

I am told that  Revenue and Customs never issue winding up petitions unless a lot of money is owed and there has been a prolonged period when tax due was never paid.

The company now says it has a £120m new contract from the United Arab Emirates and it has hived off London from the any forced administration so no-one should worry.The London Fire Brigade officially appear unflustered. A spokesman  said: “We plan for all events that could affect the fire and rescue service we provide and do not anticipate an impact on London’s fire engines.”

I understand London Fire Brigade are expecting if AssetCo goes belly up that a bank will take over ownership of London’s fire engines. Then either negotiations will start about the brigade taking back ownership of the engines or another bidder – and the rumour is it might be Babcock who already have  firefighter training centres and run Firebuy’s emergency vehicles – could take over.

No wonder Matt Wrack, general secretary of the FBU, is demanding assurances from Bob Neill, the fire minister.

As he put it: “The safety of Londoners, and of London’s firefighters, is in the hands of a company which could be wound up in six weeks time because of tax debts.  At the least, this will mean that there is no one to maintain London’s fire engines.  At the worst, it could mean that London forfeits its fire engines to pay AssetCo’s debts.
We have all known for some time that AssetCo was suffering from financial problems, though it is only now that I have discovered they are so serious as to put its future in doubt.  I do not know how long Councillor Brian Coleman, chair of the London Fire and Emergency Planning Authority, who is close to AssetCo’s senior management, has known the situation. ”

To me it is very simple. If this was publicly owned none of this would have happened. And what happens with AssetCo now could be harbinger of what is going to happen on a massive scale when everything else is sold off across the country.

Do we really want something as precious as saving lives dependent on whims of bankers and companies? The owners appear to have built up tax debts while their directors pay themselves huge salaries and get huge sums in dividends?

Londoner’s lives are more important than receiving a £350 Christmas hamper from Harvey Nicks  (as Brian Coleman has) from grateful businessmen busy making profits out of public services.

Update March 3: AssetCo is seeking to place £16m of shares at a knock down price of 10p a share – nearly a 30 per cent discount – onits closing price of 13.8 p a share last night – to urgently raise funds to payu debts ands tax bills. The offer is being underwitten by its own brokers and adviser, Arden Partners, with a promise from chief executive,John Shannon, to guarantee its overdraft. Other directors are subscribing for £116,000 worth pof the £16m shares.

The statement warns: “If the Placing does not proceed, the Directors believe that the Company will not be able to continue in its cutrrent form”.A spokesman for the company yesterday claimed it was already oversubscribed. Meanwhile the shares had fallen a further 1.5p to 12.50p